In the face of macroeconomic instability, inflation, and cost of living crisis, consumers today are very cautious about their spending habits and choose to spend their money with brands that provide real value. Gone are the days when brands kept focusing on customer acquisition and paid the least attention towards retaining their existing customers, in fact, Braze’s 2023 Customer Engagement Review reveals retention has become a top priority for brands along with, managing data, and breaking down silos within organizations to drive success. Below are the major findings from the report and recommendations on how to implement proper customer engagement strategies in your organization through the lens of those findings.
1. Brands are Focusing on Retention:
According to the report, since 2020, there has been a 36% rise in companies investing the majority of their marketing budget in customer retention, with 33% of surveyed brands spending more than half of their marketing budget on retention in 2020, and 45% of surveyed brands doing so in 2022.
To boost retention, brands are adopting a cross-channel approach, delivering the right message at the right time through the right channel. As consumers today jump from devices to channels every now and then this strategy has proven to be effective, with users who received cross-channel messages experiencing a 90-day retention rate 2.6 times higher, on average, than those who received no messages.
A great example of customer retention in action is a case study from Peacock, NBCUniversal’s leading streaming service. As someone who engages with multiple brands on a day-to-day basis, it’s truly fulfilling when a brand understands my behavior and historical engagement and uses that to let me know what I have done on their platform over a period of time. Peacock did exactly that, by creating a personalized year-end review campaign. This campaign showcased each user’s engagement, favorite genres, and the amount of content they consumed throughout the year. The campaign’s success was measured by comparing the target audience (those who engaged with the campaign) against the control group (those who were not treated with the campaign). The results showed that the target audience experienced a 20% decrease in churn rate over 30 days, a 6% higher upgrade rate from free to paid subscriptions, and a 2-point lift in return rate to view content on Peacock.
2. Data Management is Still a Challenge:
The report highlights two main data management challenges faced by brands: too much data and capability gaps. With 80% of surveyed companies collecting excessive data, it becomes difficult to use this information effectively. It’s not just about collecting data, but using it to have a meaningful conversation with their customers. Additionally, 42% of surveyed marketers cited challenges in working with internal data scientists or business intelligence teams who may not understand marketing priorities.
To address these challenges, brands should be more intentional about the data they collect and align their collection strategy with specific use cases, metrics, and goals. Furthermore, marketing, product, and data teams must collaborate to avoid data silos and improve customer experience.
The Peacock story is a shining example of data applied meaningfully to benefit the customer experience. As I mentioned earlier, I engage with multiple brands every day, let me share a couple of other brands that are using data to engage customers effectively:
- HBO Max (now Max) built a survey based on viewers’ preferences and history, then used data from that survey to create a campaign that evoked the larger Harry Potter franchise. It drove a 3% lift in viewership of the featured recommended titles within the campaign, a 3% lift in session starts, and a 6X higher click rate in connection with the in-app message
- Gympass sent personalized messages based on data related to user interests (collected via in-app surveys), habits, and behaviors (such as creating an account or searching for a fitness or wellness activity) The brand created a flow of multiple campaign stages that help a user advance on their health journey. The campaign drove 25% of net-new revenue associated with Gympass’ new subscriber revenue stream, increasing the volume of sign-ups by 3X.
3. Siloed Teams as a Barrier to Progress:
Siloed teams within organizations hinder collaboration and negatively impact the customer experience. The report found that the best-performing brands are 2.6 times more likely to have marketing teams that meet with cross-functional teams several times per week.
To break down these silos, develop a culture and mindset inside the company to establish regular cross-functional meetings with teams across the organization, fostering collaboration and diverse perspectives to solve problems and improve the customer experience.
In conclusion, the key takeaways from the Braze 2023 Customer Engagement Review emphasize the importance of focusing on retention, addressing data management challenges, and breaking down silos within organizations. By adopting a cross-channel approach to customer engagement and fostering collaboration across teams, brands can improve their retention rates and achieve long-term success.
