Retention is the new growth, says Adobe CEO

Pippa Chambers
By Pippa Chambers | 27 March 2019
Shantanu Narayen

While most companies focus “pretty obsessively" on customer acquisition, Adobe CEO Shantanu Narayen sees retention as the greater metric of the moment. 

Narayen, speaking at the software giant’s annual Adobe Summit, says revenue and earnings per share (EPS) can be “backward looking indicators” and that more firms should zone in on usage and customer centricity. 

While the majority of firms are chasing customer acquisition, when in a subscription business, usage is the biggest cause of future renewal, he says.

“If you are not retaining your customers, even at current revenue rates, then you have to run faster and faster and faster,” Narayen says. 

“In the media business it’s all about usage. When we see people use our products across different services you have a higher return.

“Both in digital media business as well as in the digital experience we are obsessed about how many people are logged in, what programs they running and asking are they getting the value.”

He said as the “fight” becomes so much larger with existing customers, a “ruthless focus on retention”, on driving usage, on understanding what people are using and what are the high value actions are is key.

“The message for every company is to think about what the high value actions are and what are the usage metrics that are meaningful indicators of customer use,” he says.

More acquisitions?

In a media briefing, Narayen was asked about further acquisitions following Adobe’s purchase of Marketo and Magneto last year. 

He says that while Adobe has always believed that acquisitions are a way to grow the company, he describes last year’s moves as “organic innovation” and as “out of the norm”.

“We saw some unbelievably unique opportunities to extend the platform into next generation ecommerce, which straddled B2B and B2C and the physical and online world,” he says.

“But right now we are very happy with what we have and we are not looking for aggressive acquisitions as we think we have a great comprehensive offering.

“Having said that, even if I was it would be unlikely that I would tell you.”

AdNews is attending the summit as a guest of Adobe.

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