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Financial marketers failing on customer retention

Financial marketers failing on customer retention

A new warning has been issued to financial marketers that they need to take action if they want to avoid missing out on customer retention.

A new survey from mailstream technology specialist Pitney Bowes has identified those vertical sectors that are producing the most – and least - effective customer retention marketing campaigns.

In today’s business climate customer retention is critical.  Many sectors are experiencing unprecedented levels of churn and the cost of replacing defectors is recognised to be significantly higher than retaining existing customers.

The new survey created an index by measuring consumer attitudes to campaign quality across five vertical sectors against the current level of customer churn in those sectors. So, a sector with high churn rates must produce campaigns that consumers find highly effective in order to suppress further attrition.

Of all the sectors surveyed, Travel and Holidays have performed best, scoring a Retention Campaign Effectiveness index of 143, followed by Charity on an index of 114.

However, Insurance has scored least on an Index of only 57, with Utilities only clocking up an index of 74.

Pitney bowes_retention

It is he influx of new, non-traditional entrants to the market that is making the customer retention marketing challenge all the more urgent for the insurance sector
Marketing Director, Pitney Bowes, David Jeffries, explained that although travel could be seen as a more pleasurable buying experience, the index revealed that businesses in this sector were not resting on their laurels when it comes to marketing to existing customers.

He added, “To find out exactly what they are doing that is delivering, we need to delve down further but broadly speaking the Travel and Holiday sector has understood the value of retention and holding on to their customers.

“It would seem that using a good mix of media, including mail, is being used with an understanding of customer preferences and past purchases.”

He explained that Insurance marketers would have to try all the harder because of the nature of the service they were offering.

David said, “Travel is a nice thing to purchase and consumers will be more receptive to offers and communications, while Insurance is seen as a ‘must do’ or stress purchase.”

“Any sector below the average on our scale should look hard at its marketing practices.”

In terms of creative, he said that customer retention campaigns did not need to be about glossy, dynamic creatives. Customers also responded positively to accuracy, timeliness and documents that are obviously relevant to their particular circumstance.

He concluded, “Those underperforming could look to affinity partnerships with best-practice sectors in a bid to stem unacceptable levels of churn.

“Combined with relevancy and colour, businesses of every size and from every sector can achieve dynamic mail marketing that encourages customer retention.”

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