In the good old days, when economies were booming and there were minted customers aplenty, brands would chase after new acquisitions. But in 2013, it’s all about customer retention, according to management consultancy Bain & Company.
Bain & Company partner Richard Hatherall, who’s also the co-head of the firm’s customer strategy and marketing business in Asia Pacific, said he’s seen a marked shift over the last couple of years from acquisition to retention.
“We’re seeing some industries such as banking, telcos and utilities slowing down, especially after the GFC following years of boom. So there’s an imperative to do more with existing customers and focus on the customer experience,” he said.
“Australia is a relatively mature market – mature but still growing until recently, and it’s falling off, so retention is more of a priority. You’ve essentially got a few things happening. Companies that traditionally didn’t have a great reputation, such as some in the telco and banking sectors, have gotten serious about getting their service levels up. The challenge they’re facing is how to move the whole organisation.”
Previously, it wasn’t unusual for consumers to see advertised special offers for new customers signing-up to a brand, but nothing on offer for those who’ve stuck around. But not anymore.
Recently, Telstra launched its ‘Thanks’ campaign, which offers its existing customers access to special deals across sports, live events and cinemas. Virgin has used its stable of sub-brands to benefit customers of one service, such as Virgin Money, with enticements on another, such as Virgin Australia.
Hatherall contended customer experience, which he defined as how a customer feels about your brand, your proposition and your service, is absolutely critical in our technology environment. “It’s a challenge for brands because you get a great customer experience from Apple or Amazon and that’s the customer’s frame of reference, that’s the customer expectation on what you can and should deliver.”
CHE Proximity managing director Chris Howatson has expressed similar sentiments before. Howatson said he believed the way forward was to create more value from existing customers, with data a key piece of that strategy. He stressed that making the most of the customers you already have was critical due to the saturated nature of the Australian market, especially in service sectors such as insurance.
This article first appeared in the 14 June 2013 edition of AdNews, in print and on iPad. Click here to subscribe for more news, features and opinion.
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