2023 was a challenging year for digital execs. Large enterprise brands in particular faced tough economic conditions and increasing pressure on targets and budgets. Aside from the macro conditions, digital teams are rightfully asking - why is this the case?
One of the biggest contributory factors comes down to ongoing challenges with user acquisition and retention. To put this into context, user acquisition and retention issues are directly brought about by:
A saturated market – something that has led to unprecedented levels of competition and soaring Customer Acquisition Costs (CAC).
Pressure to ‘do more with less’ – teams are being challenged to incorporate more AI and automation into processes whilst still delighting customers with a personalised product or offering.
More strict data privacy laws and cybersecurity protocols, impacting on a number of digital marketing tactics (Forbes).
Tighter capital markets, leading to rising interest rates and operational costs.
But the situation isn’t all doom and gloom. For enterprise brands that have been here before, it’s simply a case of spotting the opportunities in order to come back better. In fact, Deloitte forecast that 2024 could actually be a return to growth for many, especially those brands focused on innovation.
So how do execs and senior managers take advantage of this? And how can big brands turn challenging economics into profitable growth strategies?
We take a look at just some of the strategies and tactics digital product owners can leverage to drive user growth and loyalty for their brands.
User acquisition – top strategies, tactics and metrics
There is no shortage of strategies and tactics that enterprise brands can deploy to acquire users. But the question is if they are the right strategies and tactics, and if they acquire the right users.
Getting back to basics - how to target and attract the right audience
Targeting and attracting the right audience for enterprise brands involves a combination of strategic planning, data analysis, and creative execution. In some ways, it’s very much about ‘getting back to basics’. This time around, however, it’s also about layering on more efficient and modern, digital user insights. Here are our top 3 strategies for blending these two approaches:
Define your target audience: Understand who your ideal customers are by creating detailed buyer and user personas. Consider demographics, psychographics and behavioural patterns – all of which can be gleaned from a combination of qualitative and quantitative data collection methods. Top tip: once you have your personas defined, the next step is mapping out your user journeys. Here are 3 mapping approaches you can use for digital product success.
Market Segmentation: Divide your audience into segments based on characteristics such as age, location, industry, or behaviour. Tailor your marketing messages and strategies to each segment's specific needs and interests. Take monday.com as an example here. Their software appeals to many different business personas – as can be seen from the homepage of their website. But click through to each of these and you’ll find tailored content and messaging for each of those audiences – content that also trickles through to their tactics and channels too.
Use data analytics: Leverage data analytics tools to gather insights about your audience's behaviours, preferences, and interactions with your brand. Use this information to refine your marketing strategies and optimise your campaigns for better targeting.
Top tactics and channels for user acquisition
Selecting your top tactics and channels will very much depend on your strategy – who is your target audience, where are they most active, and what’s the best and most authentic way for your brand to reach them?
When considering your audience strategy, you’ll want to take into account the most common tactics and channels that other big brands use for user acquisition. These include:
Email marketing
Social media marketing
Pay-Per-Click (PPC) advertising, including across the Google Display Network (GDN)
Influencer marketing
Brand partnerships
Event sponsorship
TV and radio advertising
Applying this approach to a real-life example. Say you’re a lifestyle app targeting 20–30 year old’s, an audience that’s most active on well-known social media channels. Here, you’ll want to prioritise:
Social media marketing
Influencer marketing
Personalisation
If you’re a global bank targeting wealthy retirees, then your approach will need to be somewhat different, as you’re focusing on an audience that’s active on both on and offline channels, and still heavily reliant on traditional word-of-mouth recommendations. Here, you’ll want to prioritise:
Relevant event sponsorship
Targeted online ads
Customer Experience (CX)
User acquisition – the key metrics
As you build out your user acquisition strategy, you’ll also want to detail the key metrics you’ll need to focus on. There are many metrics available but to truly hone in on user acquisition and the ‘numbers that matter’, we recommend concentrating on these three:
Customer Acquisition Cost (CAC) – you’ll find a great definition and calculator from HubSpot on CAC
Conversion Rate – here’s a handy explanation from Optimizely
Customer Lifetime Value (CLV) – more on this from Gartner
User onboarding – first impressions count
We touched above on CX when thinking through an example of a specific audience strategy. When focusing on user acquisition, CX all begins with your user onboarding experience. In fact, get this wrong and you’ll lose customers before they’ve even started using your product or app properly! Make sure to keep these principles in mind when developing your user onboarding experience:
Create a positive first impression – reduce friction and delight your customer.
Increase the likelihood of return visits and referrals. There’s some great advice here from Monster Insights on how to use the likes of Google Analytics data to drive this.
Personalise the experience – and see this as an opportunity for data collection and feedback too!
User retention – strategies, tactics and metrics
We’ve probably all heard the stat about it costing up to five times more to acquire a new customer than to retain one. So how do you take advantage of this to keep your customers engaged and loyal?
Becoming a point of value - how to keep customers engaged
Many big brands already leverage the concept of a North Star. If you haven’t come across this yet, then Forbes has a great overview here. When it comes to user retention, your North Star goal needs to be all about becoming a point of value in your customer’s life. For digital apps, that’s about being the go-to app they open every morning. For higher-value services or offerings, that’s about being the brand they turn to for advice – think Apple or HSBC. Brands winning at customer engagement and retention nearly always follow these three North Star principles:
Excel at customer service: Offer responsive and personalised customer support across multiple channels, including phone, email, chat, and social media. Resolve customer issues promptly and go above and beyond to exceed their expectations.
Reward customer engagement: Track customer engagement metrics such as frequency of purchases, time spent on your website, and interaction with marketing campaigns. Reward and recognise customers who actively engage with your brand to foster continued loyalty and advocacy.
Collect and act on customer feedback: Solicit feedback from customers through surveys, reviews, and social media channels, and use this feedback to identify areas for improvement and make necessary changes to enhance the customer experience.
Top tactics and channels for user retention
But what do these principles and strategies look like in real life? Here are the top user retention tactics and channels that successful brands leverage today:
Customer Relationship Management (CRM) – getting a robust CRM system in place is critical to be able to track user interactions, relationships and feedback.
Engaging and personalised content – with user tracking in place, you can start to create content that’s more personalised and unique to specific customer groups. Over the mid to long term, this keeps your customers engaged and reinforces the point that your brand is a ‘point of value’ in their lives.
Loyalty programs - loyalty programs are frequently used to reward and incentivise repeat purchases and customer advocacy. You can offer reward points, discounts, exclusive offers, and VIP perks to encourage customers to remain loyal to your brand and refer others.
Email and social media marketing – this will very much depend on your audience demographic and overarching strategy, but, in most cases, you’ll want to take advantage of both email and social media marketing to engage and retain your customers. Not only to ‘meet your customers where they are’, but also to maximise the chances of them seeing your message on any given day.
Community building – online communities and forums are a great new tactic for increasing engagement and ultimately retention. These give your users a space to ask questions, share experiences, and receive – or give – support.
Don’t forget the ‘offboarding’ – if a customer does decide to cancel or not renew, make sure you still provide them with a seamless offboarding experience. It could be the difference between them staying or going – at the very least, they’ll be able to share the experience with others!
User retention – the key metrics
Just as with user acquisition, it’s important to focus on a few key metrics for user retention, rather than get caught up in tracking too many different numbers and KPIs. The top four that we see play an important role in tracking retention are:
Retention Rate
Churn Rate
User Engagement Metrics such as session duration and frequency of interactions
Customer Lifetime Value (CLV)
User retention and the power of personalisation
You’re a large enterprise brand, so providing each and every user with a tailored experience is virtually impossible. This is where great digital personalisation comes into its own. With a robust CRM in place, you can:
Customise your marketing messages.
Use personalisation techniques in email marketing and other touchpoints.
Analyse behavioural patterns to create more targeted content and ads.
Collect data to tailor the ongoing user experience, including through your rewards and loyalty programs.
Personalisation is just for user acquisition! Remember that many of your touchpoints and brand interactions are being experienced by existing users and customers too. They’re therefore an opportunity for brand ‘reassurance’ that fosters deeper engagement and loyalty.
Take your cue from the likes of Cadbury and Spotify and learn more on how to enhance customer engagement with personalisation!
Why user acquisition and retention are so closely connected
Did you notice that Customer Lifetime Value (CLV) features as a key metric for both user acquisition and retention? That’s because these two strategies are intertwined, working towards the same end goal and therefore representing a fine balancing act in your overall growth strategy. While acquisition focuses on bringing in new customers, retention ensures that these customers stay engaged and loyal over time, ultimately leading to sustainable growth. What’s more, retaining existing customers is often more cost-effective and profitable than acquiring new ones. Studies show that a 5% increase in retention rates can lead to a profit increase of up to 95% (Zippia and Bain & Company), highlighting the significant impact of retention on revenue generation.
In order to balance these two approaches, you must:
Align strategies and tactics across acquisition and retention
Adopt a holistic approach to the customer lifecycle
Embed a customer-centric culture in your teams
Leverage data and analytics
Seek continuous customer feedback and use that in an iterative optimisation approach
The close connection between user acquisition and retention underscores the importance of businesses aligning their strategies to effectively acquire, engage, and retain customers. To win in today’s competitive market landscape, enterprise brands need to strike a balance between user acquisition and retention, focusing on adding value to the customer relationship from the initial onboarding experience, right through to if a customer decides to leave.
If you need help designing seamless customer experiences, then speak to one of our team.
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