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Building the Case for Return-on-Relationship

Written by: Mark Pearson
(View Author Bio)

In the retain stage of the customer lifecycle, marketing focus shifts to the relationship.

Overview

At BI WORLDWIDE Canada, we use the principles of behavioural economics to create the best engagement strategies on the planet. We work with expert academics who advise us on the latest research on human behaviour, engagement and decision-making. We use non-cash rewards and recognition to engage and motivate employees and sales teams.

In the retain stage of our simplified customer lifecycle, marketing focus shifts to
the relationship. Customers entering this third stage have transitioned through
development, where the primary focus was on driving behaviors associated
with maximizing revenue and profitability. Now it’s time to evolve beyond a strictly
transactional relationship and develop the emotional connection that yields
brand preference and, ultimately, true loyalty as opposed to mercenary loyalty
(paying for loyalty with pricing strategies and tactics like discounts). This requires
measuring return-on-relationship (ROR) in addition to return-on-investment
(ROI). The goal here is to create an optimized and balanced win/win relationship.

Customer Retention Behaviours

Behaviours in the retention stage differ significantly from those in the development stage. In the develop stage – which focuses on purchase continuity, onboarding and growth – there are more behaviors and a greater variety of behavior types. Notably, the behaviours tend to be quantifiable and measurable, often tied to a specific key performance indicator (KPI) and ROI goal.

In the retention stage, most of the behaviours are “soft,” engagement-related
behaviours. As a result, measurement becomes more subjective, focusing on things like customer satisfaction, brand preference and intent-to-refer. What’s important here is quality over quantity. That being said, the crucial purchaserelated behaviours established in the develop phase must continue to be reinforced and measured in the retain phase. As a result, positive or negative fluctuations in development behaviour metrics are often attributable to specific retention marketing tactics. It is important to point out that driving retention stage behaviours is especially vital for brands with fewer purchase or service-related behaviours (e.g., lower frequency, higher ticket).

Retention behaviours fall under three categories:

Cultivation,
Recognition and
Extension.

In the retain stage of our simplified customer lifecycle, marketing focus shifts to the relationship. Download Now

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Mark Pearson

Vice President Loyalty
Customer Engagement Group

Mark is responsible for multi-channel marketing strategy and solution design. He applies expertise in customer lifecycle, loyalty and interactive marketing to develop programs that leverage behavioural economics and gamification to drive engagement and targeted behaviors. Most programs are deployed online via responsive design, often incorporating social media extension and sales channel integration. Mark has more than 25 years of experience, a BA in English from Gustavus and an MBA in Marketing from St. Thomas.