GUEST OPINION How retail marketers can learn from Olympians to better attract and retain customers
The Olympics is underway, the daily training sessions in the months leading up to this global event are over and the focus is now firmly on wanting to win – so what can digital retail marketers learn from these dedicated Olympians? Sailthru CMO Eric Porres
looks at how to go for gold.
The Olympians representing their home nation at the highest level of competition right now in Rio didn’t get to where they are overnight: their achievement is the result of years of training and dedication. So what can marketers learn from these athletes and how they have got to where they are today?
Imagine two coaches. Each with the responsibility to find the next crop of potential Olympic athletes, but each has a spectacularly different strategy for winning.
The first puts most of his energy into training as many random people in their chosen sport as possible. His method is to see 100 new people every month. From those, someone will prove to be a winner.
The second coach focuses all of her energy on a much smaller set of people who have the right characteristics to become champions.
Which coach do you think has a better chance of identifying the next Olympic Gold medallist?
The first coach might just get lucky, but the odds are seriously stacked against him. In each addition of 100 random people, he might end up with a half dozen who can’t perform. Some will never even get past the first session. The people who do, will be a mixture in terms of skill and ability: some will be lousy athletes, some will be pretty good, and a lot will be stunningly average.
The odds of finding a future Michael Phelps, Usain Bolt or Steve Redgrave through this kind of random approach is astonishingly small.
The second coach is training far fewer athletes. But they are powerful and capable of delivering great performances. But more than that, the second coach has information on her side that enables her to recognise the most promising athletes. She knows what training regimens will reliably boost performance. She understands the effect of proper nutrition on her athletes. She has a system that works.The connection between acquisition and retention
This coaching analogy illustrates the need for marketers to better connect acquisition and retention to succeed in long-term growth.
The trap for marketers is that the first approach – targeting hundreds of customers every month – creates an enormous amount of activity.
When a marketer blindly tries to acquire as many random customers as possible, it’s really a lottery approach. There’s a tiny possibility that you might get lucky and strike gold. But even if you pull off a huge win and acquire a new customer who becomes one of your very best ever, the fact remains that luck is not a system.
It looks like really big things are happening even when they aren’t. If you look closely, you realise that the people making the most noise are actually the least valuable, and a lot of people are just passing through, showing little or no interest at all.
A disciplined system, by contrast, is comparatively quiet. The main sound is that of a powerful, smooth, efficient motion, with the underlying knowledge that you are recording and monitoring each and everyone’s progress.
A disciplined marketer who understands the value of retention and maximising lifetime value takes a systematic approach. There’s a strong probability that most of her customers can become higher-performing customers – and some may begin delivering truly Olympic results. But more than that, with each passing year her system gains the data and intelligence needed to continually improve.
Yet thinking about acquisition and retention as an either/or is as pointless as asking whether an athlete should use only their arms or only their legs.
The only sensible answer is to use both to create a perpetual motion; an acquisition system that is driven by retention is like an Olympic swimmer who gains momentum with every stroke. Data-driven interplay between the two not only creates headway, but multiple length leads and champion-level performance. Smart marketers need to train their management to recognise and value the signs of steady progress, and to ignore the urge to make a lot of noisy, misguided activity.Gold Medal Results
We have seen this work in practice through recent acquisition programs designed to increase spend efficiencies and improve outcomes. Specifically decreasing new customer acquisition costs by up to 45% and increased expected lifetime value by more than 50% for brands including Rent the Runway
, SheKnows Media
Leveraging technology, smart marketers such as these can view the complete history of customer behaviours across email, web, mobile, social and offline channels, and then link that data with predictive data regarding the probability of making a purchase, predicted pageviews and the probability of opt-outing out of email. This customer level insight enables publishers to automatically predict which readers will generate significant pageviews - a proxy for revenue per user - and then segment these readers to build lookalike audiences. And it allows retailers to predict which customers will purchase and how much they will spend to automate top customer segmentation and the acquisition of new, high value customers.
The results from such efforts are podium worthy:
- 40% reduction in mobile subscriber acquisition costs for Rent the Runway; 53% increase in expected lifetime value of new customer acquisitions.
- 45% reduction in subscriber acquisition cost for SheKnows media; 107% predicted increase in pageviews per user in the next 30 days.
- 21% increase in projected revenue per customer for Betabrand.
Marketers should feel empowered to leverage their downstream data to optimise new customer acquisitions and bring in loyal customers with longer term engagements and customer lifetime value. Now is the time for marketers to integrate their retention and acquisition efforts to produce Olympian results - as proven by brands such as Rent the Runway, SheKnows Media and Betabrand.