E-Mail: The Secret Weapon in Customer Retention


In the new economy, we marketers are manic about acquiring customers rather than retaining the ones we already have. Yet it costs the average business 5 to 10 times more to acquire a new customer than to retain an existing one.

The leadership battle is really over creating loyal customer relationships. Those who can leverage customer information and intelligence and use the efficiency of new and emerging channels, such as email, are best positioned for a competitive advantage. It’s a contest between you and your competitors to retain your customers by building meaningful, contextual relationships with them and leveraging channels to do it in a timely and efficient manner.

Against a backdrop of narrowing media and marketing budgets (notice Procter & Gamble’s recent decision to cut ad spending), cost-effective and efficient tactics are essential to win this battle. Using customer data as the basis for relevant communications is no longer optional. Failure to learn from customer behavior and preferences dooms marketers as spammers, regardless of the media delivery channel.

There’s no shortage of ready examples of how organizations destroy customer loyalty and affinity through a lack of coordination and communication between different customer touch points. Case in point, a recent experience with my auto insurance carrier.

This insurance company’s TV spots tout its customer-friendly attitude. The sell message is clear: “We listen. The other guys don’t.”

Now, the driveway at the DiGuido household at times resembles a trendy restaurant’s valet lot. Between me, my wife, and my kids, I’ve at times insured over eight vehicles with that insurer. Not long ago, I decided to manage the account payments through an automated bill pay option. One less thing to worry about… or so I thought.

Three weeks ago, I opened my mailbox to find a striking pink envelope from my insurer. My first thought was, “Wow, pink. These guys are on to something.” Pink breaks through mailbox clutter, demanding attention. Must be something pretty important.

The notice stated my policy would be cancelled for nonpayment effective Thursday, June 30, at 12:01 a.m. A notice would be sent to the Department of Motor Vehicles, as I would be in violation of the law regarding driving uninsured vehicles. I ran online to see if something dreadful had happened. Maybe the auto-pay didn’t process correctly. Nope, the account status read “Payment received in full.”

I called the toll-free number and navigated the automated telephone menu (“to save time and serve you better”). My call was directed to a very pleasant operator.

After I explained my situation, the operator checked my records on her system and indicated I hadn’t paid this bill. I replied, “But I paid my bill online.” Sounding confused, she asked me to hold on. Five minutes later, and full of apologies, she returned. “You can rip that notice up, sir. You are in fact paid in full. Sorry for any inconvenience.”

I asked what she did. She said, “I went down the hall to bring up your account online and check your status. After seeing that the payment was made in full online, I have updated your records in my system.”

My insurer’s offline systems aren’t integrated with its online systems.

Having paid tens of thousands of dollars in premiums over the years, all I got was, “The two systems don’t talk to each other. Sorry, sir.”

This failure to focus on managing each customer touch point and share information across systems damages brand affinity and loyalty. Here’s how email could have improved the customer experience given my status as an active online account services customer:

  • Change your mindset. Stop thinking about email in terms of one-off campaigns. Think email conversations. In this case, the statement was ready and payment confirmations were nonexistent.
  • Think customer service. Incorporate email into the customer service process. Allow consumers to email questions and concerns.
  • Think lifecycle communications. E-mail isn’t for promotional efforts only. It embodies all aspects of the customer relationship, including marketing/promotion and service messaging. E-mail should always be relevant, personalized, and timely. Given my status with the insurer, lost opportunities abound: loyalty programs, up-sell offers, surveys, service messaging, even a win-back offer… or at the very least, an apology.

Why do so few organizations built strategic lifecycle email communications programs that create conversations with customers and build value and return on investment (ROI)? So few have even tied customer-related systems together. It’s a multichannel world. I don’t buy “it’s complicated.” The world is complicated. Get over it.

Park egos and vested interests at the door. Work as a team with a mission to build integrated communications and messaging across the customer profile. Connect your CRM communications systems so you have a universal view of how your customer touches your brand. My insurer lost a battle for a loyal customer that day. If you think that won’t hurt over time, you’re kidding yourself.

No amount of cute ads with mascots and neat SEO (define) will cure this lack of attention to customer communication and relationships.

Until next time,

Al D.

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