Customer Stickiness: A marketing conspiracy or a sensible marketing strategy?

Copyright (c) 2006 Frederic Moraillon

Customer stickiness is rather unfortunate definition of what appears to be a rather sensible strategy. Derived from a now old web retention technique, customer stickiness conjures a marketing conspiracy every time the work appears. Fortunately, this is not always true and marketers are hard at work to ensure that costumers stay with them as they believe they have something worthwhile to offer.

It’s loyalty stupid

Customer stickiness is simply customer retention or customer loyalty depending which terminology you prefer. After all, it is a marketing adage that it is more expensive to look for a new customer than to retain an existing one. It is therefore worthwhile to enhance the depth and quality of your products or services to ensure that customers stay with you and profit from a lifetime of mutually beneficial exchanges. An endeavour that many businesses have started focus on.

Unfortunately, increasing the number of offerings to your customers or even the quality of your service does not always mean they will buy more and remain loyal. Customers are bombarded with choices and not always looking for new product or services. They sometime want the same product or service but in a way that is convenient to them, faster to get or simpler to order.

The main assumption behind customer stickiness is that if a customer is highly involved with your company, he will be unwilling to go through the paperwork needed to switch (for example.) This is just an assumption and might only be true if the product is difficult to move away from. In today’s environment, customers are more sophisticated than ever and they vote with their feet. If the service they receive from you is not up to their standard (not yours,) they’ll take the time to move on. If your product is perceived as undifferentiated or easy to eliminate, then a customer’s loyalty will be as deep as the time it takes him to buy from your competition.

To ensure that customer keeps on investing in your products or services you need to know what matters to them. It could be as simple as asking them, they might tell you. But when was the last you sat down with your customer? Talk to them and they’ll come-up with new ideas that your best marketers would have never have considered. It all boils down to establishing a relationship on their own terms.

To add to the complexity of customer relationships, the correlation between stickiness and profitability is still not clear.

A “loyal” customer could drain your resources without you knowing. If you try to sell him more products, you might increase your marketing expenses without making a profit. Hence, to ensure profitability, you need to know what each customer is worth and this brings us into the realm of conversational marketing and analytics.

Conversational Marketing

Establishing a conversation with the customer on his own terms is perhaps one of the missing elements that would help marketers develop successful strategies. When was the last time you, as a marketer met with a customer? Not at an event but in his workplace where he’s using your product. In business marketing, the relationships with customers are even clearer (but not easy.) Each person of your customer’s team should be matched with a counterpart in your organisation. The customer’s GM with your GM, their buying committee with your sales force, their end-users with your product or customer service people, their financial controller with yours, etc. “To each his own” to paraphrase a well known quote.

Measuring and Analysing

You need to know which customer is worth your time and effort. Each is not created equal and it is often heard that the more difficult customers are the one that contribute less. Not because they make you waste every dime you earn from them, but because they did not invest much in your company in the first place. Every marketer owes it to himself and his company to learn and master the metrics and analytical tools that will ensure the proper return on investment for every invested marketing dollar.

Increasing customer stickiness is a worthy goal ifÂ…

Increasing customer stickiness, for lack of a better word, is a worthy goal if both parties benefit from it. As a company, each customer that “sticks” to you must be generating profitable revenue. As a customer, the “sticky” relationship must be effortless and bring increasing benefits. If one of these is not true, then the relationship will hurt one or both parties involved possibly leaving lasting negative memories that travel faster than your advertising does.