7 Customer Retention Examples to Build Your Strategy

Retaining customers isn’t just about making them buy again; it’s about building long-term loyalty. You need to prevent your customers from switching to your competitors. The real question is: What does it take to please customers—and keep them coming back?

Is it your product’s uniqueness? Is it your service quality? Why would customers voluntarily pay for your offering again and again? The answer is more layered than you think.

In this guide, we’ll examine seven examples of customer retention and what brands are doing right to build and retain a loyal customer base.

Why Customer Retention Matters

Think about it: What’s more profitable? A single customer buying several times from your brand over one year or multiple shoppers buying from you but never returning again? We’d bet on the former.

If you are able to retain customers, they will purchase more frequently, recommend the brand to others, actively choose your brand over competitors, and even pay a premium. The foundation of all these elements lies in how loyal your customers are.

Why customer loyalty matter


On the company side, selling to an existing customer is 60-70% profitable as opposed to selling to a new prospect:

Acquistion versus retention


The takeaway: Retaining existing customers is as important as getting new ones through the door. The best to turn on the loyalty switch is by identifying loyal customers through RFM segmentation and using robust referral campaigns.

7 Winning Customer Retention Campaigns (+ Key Takeaways)

You may equate customer retention campaigns with loyalty programs, but that’s just the tip of the iceberg. Successful brands understand that customer retention starts with making customer data their single source of truth and moving on to reimagining the customer experience with said data.

Here are seven examples of customer retention that target existing customers using different touch points and brand advocacy strategies:

Strategy #1: Create customer profiles and send continuous, personalized messaging

You can’t convert customers to be brand advocates if you don’t:

A. Know them, including what they like, dislike, need, aspire for, and so on
B. Understand where they are in their buying journey

This is where customer personas or profiles come in. You gather information about your customers, segment it based on shared preferences/needs, and tailor your marketing accordingly.

In action, this looks something like the following email from the brand Kerotin:

Personalized messages Kerotin

Source: Screenshot from Gmail

This email gets many things right in the first go:

  • Retargets an existing customer after weeks of the first purchase to see if the customer is running low on products.
  • Makes it easy for the customer to buy their favorite product with just two clicks.
  • Recommends new products that the customer might like.
  • Reflects simplicity, as the email is to the point and the design is clutter-free.

The takeaway: Developing a profile of your long-term customers enables you to leverage this profitable segment. By closely monitoring their preferences, you can increase the likelihood of turning them into a loyal customer base. Analyze what sets your repeat customers apart from one-time buyers, and use this insightful data for marketing to existing customers in a targeted way.

Strategy #2: Make your existing customer’s happiness and convenience your priority

On paper, this seems like an obvious theory. But in practice, brands often stop following through on this crucial strategy.

They get caught up in chasing new leads and neglect the potential goldmine of existing customers.

Here’s how you can maintain a balance between your customer retention efforts and your acquisition strategies:

Work on exceeding existing customer expectations in addition to meeting the expectations of new customers

Connect with existing customers on shared values and build loyalty with new customers, demonstrating your brand’s core values as Toms’ does:

Toms Customer Retention Strategy


Customer loyalty guru Fred Reichheld, in his book Winning on Purpose, summarizes:

“The primary purpose of a business should be to enrich the lives of its customers. Because when customers feel this love, they come back for more and bring their friends—generating good profits.”

He suggests brands use the Earned Growth Rate (EGR) to measure the revenue growth brought on by returning customers and their referrals. Using this metric alongside NPS will give a hard financial metric to assess loyalty-driven growth.

The takeaway: You can prioritize your loyal customer’s happiness in many ways—you can go the extra mile to address their pain-point, make it easier for them to shop with you, enable them with discounts and rewards for their continued loyalty, and more. Elevate this strategy by anticipating what would make your existing customers happy instead of waiting for them to knock on your door.

Strategy #3: Show customers how your brand values them—with meaningful words of affirmation

When it comes to showcasing customer loyalty, don’t just talk, show. For inspiration, take a look at American Express’ following tweet—a masterstroke of genius:

American Express Customer Loyalty Program


The brand encourages user-generated content on its X handle to let customers do the talking. It asks existing customers to share how and, more importantly, why they started their AmEx journey.

In response, customers can get their American Express card with the “Member Since” details embossed on the brand’s site.

Here are the learnings from this incredible customer retention campaign:

  • Amplify your existing customer’s authentic testimonials on the right social media handle and gain goodwill
  • Affirm your customers’ continued association and appreciate them socially to foster a sense of community
  • Share the customer’s positive feedback internally to keep your team motivated
  • Change things up with creative marketing campaigns if you feel that the existing customers are jumping ship out of monotony or boredom

The takeaway: Encouraging customers to share their stories creates powerful, authentic testimonials that enhance your brand’s credibility. Publicly acknowledging their loyalty strengthens community bonds and demonstrates genuine appreciation. Additionally, sharing this positive feedback with your team can boost morale and drive a customer-focused culture. Utilize these strategies to deepen customer loyalty and achieve sustainable growth.

Strategy #4: Reinforce ways to value your existing customer’s time

Loyal customers don’t want to spend time waiting to get their queries addressed.

If they want to cancel their subscription, they should be able to do it with one click.

If they want to get in touch with customer support, they should be able to talk to a live chat within seconds.

If they put up a complaint online on social media, they should get an action-oriented response within minutes, as Birkenstock demonstrates below:

Birkenstock Social Media Engagement


As a thumb rule, brands must:

  • Reduce the number of interaction channels to a minimum and enable customers to get their problems addressed as quickly as possible
  • Keep asking for customer feedback in real time and not look the other way if the responses are unpleasant
  • Train agents to handle issues and empower them with the necessary permissions to take action promptly
  • Focus on ironing out customer issues at first contact
  • Implement self-service options such as comprehensive FAQs, video tutorials, and step-by-step guides to allow customers to self-serve

The takeaway: By making your customer service quick and convenient, you show your customers that you value their time. This will keep them happy and loyal for years to come.

Strategy #5: Focus on successful onboarding = Higher customer engagement = Retained customers

Brands rarely go back to the drawing board to analyze how their customers began their journey at the start—a big mistake.

Customer onboarding done right leaves a positive impression in the customer’s mind—one that lasts for a long time. But how do you deliver a seamless onboarding experience?

  • Use AI-powered insights and analytics to gather real-time data on customer preferences and create omnichannel, personalized campaigns
  • Automate your customer engagement efforts and lower manual effort to set up scalable campaigns

Use-case: How XL Axiata Drove a 29.5%Conversion Rate for Their Rewards Program

XL Axiata Loyalty Rewards Program


The challenge: XL Axiata, one of Indonesia’s largest telecom operators, needed an integrated customer engagement platform with advanced analytical capabilities to facilitate communications across all stages of the customer lifecycle.

The solution: The brand focused on building a robust onboarding strategy by:

  • Leveraging AI-powered recommendations to:
    – Optimize campaigns and flows with customer intelligence on customer behavior, action, and preferences
    – Understand the best time to communicate with customers using the most preferred channels
  • Combining A/B testing and segmentation aggregation methodologies to boost the CTR rate

The results:

  • 22% increase in app stickiness
  • 26.2% increase in click-through rates via A/B testing on weekend deals
  • 29.5% conversion rate of rewards program

The takeaway: To get customers hooked, you need to know what makes them tick. Brands must focus on leveraging AI-driven advanced insights on customer affinities to create relatable, value-driven customer retention campaigns.

Strategy #6: Be Thoughtful, mindfully

Sure, customers love freebies of any kind. But more than that, it’s the intent and thought that counts. Take BarkBox’s thoughtful gesture where it:

Refunded a customer’s advance payment for monthly subscriptions as their dog had died (with 4-5 months’ worth of subscription remaining)

Sent a sympathy card out of the blue to share the owner’s pain

Barkbox Pet Ad

The customer aptly described this as an act that “takes customer service to an entirely different stratosphere.”

How can brands be thoughtful without letting it dent the bottom line?

  • Gifts don’t always translate to monetary value; personalized notes work better in some cases
  • Focusing on small, meaningful actions to show you care helps. You can send handwritten thank-you cards, wish a customer happy birthday, give a surprise upgrade, or offer member-only discounts
  • Provide early access to sales or new products for loyal customers
  • Send personalized gifts and samples based on your customer’s past purchases from time to time

The takeaway: Acts of kindness never go unnoticed. The idea is to identify opportunities to surprise and delight the customer—as BarkBox did and build an emotional connection. If the situation demands, brands must empathize with their customers’ emotions. To elevate it, they must complement it with genuine gestures that will transform customers into self-confessed brand loyalists.

Strategy #7: Stick to your fundamentals, even if it means going bold

In 2021, the beauty brand Lush did something brands wouldn’t dare to do in today’s social media age— it turned its back on four social media handles: Facebook, Instagram, TikTok, and Snapchat.

Why did the brand take such a drastic step? By the brand’s own confession, it rolled out an anti-social media policy “until these platforms can provide a safer environment for their users.” The brand’s core target audience is young girls who are increasingly at risk of the negative mental effects of social media browsing.

What the brand did was:

  • Prioritized the customer’s well-being over conventional marketing
  • Aligned their audience’s needs with the brand’s offering to build a more authentic connection, even if it meant going against the grain.

Clearly, the lesson here is to first outline what your brand stands for and whether it makes sense for your target audience. If push comes to shove, brands should not hesitate to stand up for their values and make decisions that truly benefit their customers.

The takeaway: Sometimes, sticking to your principles means taking a bold stance, even if it goes against the norm. Lush’s move showed that prioritizing core values over popular trends can make a powerful statement and resonate deeply with your audience.

Are Your Customer Retention Campaigns Converting?

Every example of customer retention in this guide highlights the importance of focusing on your current customers—just as much as keeping an eye on your new prospects. While it’s tempting to prioritize new leads for a quick boost in revenue, it shouldn’t come at the expense of your returning customers.

One-time buyers won’t sustain your business; it’s the loyal, returning customers who act as your lifeline, especially in today’s unpredictable market. Use the customer retention strategies in this guide to create a robust revenue-generating retention campaign—one for the ages, really.

8 Important Customer Retention Metrics + KPIs (and How to Measure Them)

Customer retention metrics are critical factors—or variables—that measure how likely your business is to retain and attract customers. Every customer-focused organization has a neat list of customer retention KPIs that they track without missing a beat. Common examples include customer churn rate, Net Promoter Score, repeat purchase rate, and so on.

Monitoring strategic customer retention metrics is important for many reasons—which we’ll explore in this guide.

Why Are Customer Retention Metrics Important?

The Harvard Business Review claims acquiring a new customer is 5-25x more expensive than retaining customers (depending on the industry your company operates in). Clearly, not focusing enough on retaining your loyal customers is a loss-making move.

Monitoring the right customer metrics is not just great for your bottom line; it also tells you:

  • Why customers are leaving your product
  • Who is leaving your product
  • When customers are leaving your product

Typically, SaaS companies use customer retention metrics to assess how well their product is performing and drive organic success.

The takeaway: If you want insights into why your customers choose to stick around and how to engage active customers, you need to track the right customer retention KPIs.

8 Effective Customer Retention KPIs Worth Tracking

In the acquisition versus retention quest, the real question is: What matters when? Keeping the right set of customers only makes sense if your timing is spot on. This strategic process starts with mapping customer retention KPIs, measuring said metrics, and continuously improving your findings.

Here are eight metrics worth adding to your must-track list:

Metric #1. Customer Retention Rate (CRR)

Customer retention rate refers to the percentage of customers who continue to engage with your brand over some time versus the ones who are going away. CRR is defined in terms of percentage and is time-specific (such as monthly, quarterly, annually, etc.).

Failure to track this metric will cancel out all your efforts of acquiring new customers.

How to Calculate It?

Customer Retention Rate Formula



  • CE: Total number of customers you have at the end of a specific period
  • CN: Number of new customers who started doing business with you during that period
  • CS: Total number of customers you had at the beginning of the period

Let’s assume that at the beginning of Q1, you have 1,000 customers (CS). By the end of Q1, you have 1,200 customers (CE).During Q1, you acquired 300 new customers (CN).

So, your CRR will be:
CRR = (1200 – 300)/1000 X 100 = 0.9 X 100 = 90%

Improvement Tips:

  • Track customer data consistently over the same period (i.e., monthly, quarterly, or annually) to spot trends.
  • Clean your data regularly to remove duplicates and inactive accounts.
  • Break down your customer base into segments such as new customers, loyal customers, and at-risk customers. Calculating CRR segment-wise will help you get a detailed understanding of retention across different customer groups.
  • Include relevant customers in your calculations—consider returning customers and exclude customers who made one-time purchases.

Metric #2. Monthly Recurring Revenue (MRR)

MRR is a product metric. It tracks predictable recurring revenue coming from your company’s subscription-based product/service month on month.

Most companies use this metric to forecast and learn about their business’s financial health and growth trajectory while making informed decisions.

How to Calculate It?

Monthly Recurring Revenue Formula



  • Average Revenue Per Account (ARPA) = Total Recurring Revenue/Total Active Accounts

Let’s assume a B2B software company offers the following subscription plan:

  • Plan A: $12,000 per year

To calculate the MRR, you need to first convert this annual fee to a monthly amount.

  • Plan A: $12,000/12 = $1,000 per month

Next, determine the Number of Active Accounts. Let’s assume that the company has 75 active accounts for the given month.

  • MRR = 75 (Active Accounts) × $1,000 (ARPA) = $75,000

Improvement Tips:

  • Update customer data regularly to reflect real-time changes in subscriptions
  • Use recurring revenue and not total revenue when calculating
  • Include only active (read: paying) customers and not ones who signed up for a free trial
  • Standardize each metric to per month

Metric #3. Expansion Monthly Recurring Revenue (Expansion MRR)

Expansion MRR represents the revenue generated from existing customers who upgrade their current subscription plan or add new features/services to their existing plan.

It acts as a key indicator of two things: customer growth and the effectiveness of your upselling/cross-selling strategies. It allows you to monetize the value you’re extending to customers.

How to Calculate It?

Expansion Monthly Recurring Revenue


Let’s assume:

  • Total MRR at the start of the month: $50,000
  • Expansion MRR during the month: $5,000

So, MRR = 5000/50,000 X 100 = 0.1 X 100 = 10%

In this example, the Expansion MRR percentage is 10%, meaning that the company’s MRR increased by 10% due to expansions (upgrades or add-ons) from existing customers compared to the total MRR at the beginning of the month.

Improvement Tips:

  • If a large portion of your revenue is from existing customers, you must track Expansion MRR
  • Determine which revenue streams should be included in your Expansion MRR calculation, such as upgrades, upsells, cross-sells, and add-ons
  • Do not assess this metric in isolation, especially if churn is on the rise, or else you risk getting skewed results
  • Try to increase your Expansion MRR from the Gross MRR Churn Rate

Metric #4. Customer Lifetime Value (CLV)

Customer Lifetime Value estimates the total revenue your business can expect from a single customer over the entirety of their relationship with your brand.

Whether you want to understand customer profitability or guide business decisions related to marketing, sales, and customer service, tracking this metric is key.

How to Calculate It?

Customer Lifetime Value Formula



  • Average Purchase Value: The average amount a customer spends per purchase
  • Average Purchase Frequency Rate: The average number of purchases a customer makes in a given period
  • Customer Lifespan: The average length of the customer relationship in years

Let’s say you run a subscription-based business. On average, your customers spend $50 per month on your service, make 1.5 purchases per month, and stay subscribed for 24 months.

CLV = $50 X 1.5 X 24 = $1800

Improvement Tips:

  • Pull data from your CRM and sales records
  • Calculate CLV for high-value and regular customers separately
  • Factor in the average time a customer stays with your business
  • Use profit per sale, not just revenue
  • Deduct the cost of acquiring each customer from the CLV
  • Include recurring revenue from subscriptions
  • Add revenue from customer referrals
  • Apply predictive analytics to forecast future value

Metric #5. Product Stickiness

Product stickiness refers to how effectively your product keeps customers engaged and coming back for more. It measures your product’s ability to retain customers over time and indicates how valuable (and integral) your product is to their daily routine as well as needs.

How to Calculate It?

Product Stickiness Ratio



  • DAU: The total number of unique users who engage with your product daily
  • MAU: The total number of unique users who engage with your product at least once within a given month

Suppose you have an app with the following metrics for May:

  • DAU: 5,000 (average daily users)
  • MAU: 20,000 (total monthly users)

Product Stickiness = 5,000/20,000 x 100 = 25%

This means 25% of the customers who engage with your app monthly also use it daily, indicating how “sticky” your product is.

Improvement Tips:

  • Clearly define what counts as an active user
  • Analyze user groups by signup date
  • Consider seasonal user activity changes
  • Create charts to track DAU and MAU trends

Metric #6. Repeat Purchase Rate (RPR)

Repeat Purchase Rate is the percentage of customers who have made more than one purchase from your business during a defined period.

It’s calculated by dividing the number of customers who purchased more than once by the total number of unique customers, then multiplying by 100. Use this metric to measure customer loyalty and assess the effectiveness of your retention strategies.

How to Calculate It?

Repeat Purchase Rate Formula


Let’s say you have an online store and want to calculate your Repeat Purchase Rate for June. You had 500 unique customers during June, and out of those, 100 customers made more than one purchase.

RPR = 100/500 x 100 = 20%

Improvement Tips:

  • Clearly define what constitutes a “repeat purchase” for your brand. For example, is it a second purchase within a certain time frame? Or does it include all purchases beyond the first?
  • Invest in CRM software to ensure your data on customer purchases is accurate and up-to-date
  • Segment your customers based on their purchase behavior (read: first-time buyers, repeat buyers, etc.) to calculate RPR for each segment individually
  • Use RPR in conjunction with other metrics, such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV), to gain a more comprehensive understanding of your customer base

Metric #7. Customer Satisfaction Score

Customer Satisfaction Score (CSAT) allows you to gauge how satisfied customers are with a specific interaction, transaction, or experience.

You can use surveys where customers rate their satisfaction, often on a scale from 1 to 5 or from “very unsatisfied” to “very satisfied.”

Typically, you’ll want to use CSAT scores to benchmark against industry standards and/or competitors and assess performance.

How to Calculate It?

Customer Satisfaction Score Formula


CSAT is calculated as the percentage of customers who selected a positive rating (e.g., 4 or 5) out of the total number of responses.

Suppose you survey 100 customers and receive the following ratings:

  • 20 customers rate their satisfaction as 1 (very unsatisfied)
  • 30 customers rate their satisfaction as 2
  • 25 customers rate their satisfaction as 3
  • 15 customers rate their satisfaction as 4
  • 10 customers rate their satisfaction as 5 (very satisfied)

CSAT = (15+10/100) X 100 = (25/100) X 100 = 25%

Improvement Tips:

  • Use simple and easy-to-understand language in your survey questions
  • Avoid sending surveys when you think customers will be less likely to respond
  • Offer a small incentive for customers to encourage survey participation
  • Include specific details about the customer’s recent interaction to demonstrate that the survey is personalized
  • Empower customers with multiple platforms to complete the survey, such as email, SMS, or your website
  • Connect with customers who provided negative feedback to understand their concerns granularly

Metric #8. Net Promoter Score (NPS)

Net Promoter Score (NPS) measures your customers’ loyalty and satisfaction based on how likely they are to recommend your company/offering. Businesses use this metric to understand how their customers perceive their brand and pinpoint areas for improvement.

How to Calculate It?

Net Promoter Score Formula


Based on the customer’s rating, they are classified into three categories:

  • Promoters (9-10): Devoted fans who will continue to make purchases and recommend others, fostering growth
  • Passives (7-8): Customers who are content but lack enthusiasm and are susceptible to competing offers
  • Detractors (0-6): Customers who are dissatisfied and could harm your brand with negative reviews

Suppose you survey 100 customers with the following results:

  • 40 customers = Promoters (rating 9-10)
  • 30 customers = Passives (rating 7-8)
  • 30 customers = Detractors (rating 0-6)

To calculate NPS:

  • %Promoters = 40/100 x 100 = 40%
  • %Detractors = 30/100 x 100 = 30%
  • NPS = 40% – 30% = 10

Improvement Tips:

  • Note: NPS can range from -100 to +100 where:
    – Positive NPS (>0): Indicates more Promoters than Detractors, generally considered good
    – Negative NPS (<0): Indicates more Detractors than Promoters, suggesting serious issues
    – Benchmarking: Companies use NPS to benchmark against industry standards and track changes over time
  • Evaluate NPS scores based on different touchpoints (think: sales, customer support, etc.) to identify areas that need immediate attention
  • Send the survey shortly after a key interaction to capture the customer’s sentiment while it’s fresh
  • Keep the survey brief, focusing only on the NPS question. You can include one follow-up question for context
  • Ask specific questions such as “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?”

Are You Tracking the Right Customer Retention Metrics?

Retaining customers is as important as attracting new ones. Organizations that monitor why their customers stick around can engage them for the long haul.

However, not every organization’s customer retention metrics look the same. Some companies may benefit from measuring time to value, while others may consider customer satisfaction scores as their North Star metric.

Before you create a list of metrics and KPIs to track, do your homework on global customer trends and understand what’s making your customer tick. Armed with the latest data, you can implement a results-oriented metrics framework for your teams to follow—and ace.

Retention Strategies: How to Keep Your Customers Coming Back for More

Customer retention stands at the forefront of every business owner’s mind. And why shouldn’t it? Retaining a customer is good for the top line as it helps lower the cost of acquiring customers. Data suggests that acquiring new customers costs 5x-8x more than keeping existing customers. Moreover, existing customers will likely spend 67% more on average than new customers.

Besides, a returning customer is a sign that you are doing good work of engaging and maintaining your relationship with your customers well.

Importance of Customer Retention

Customer retention rate refers to the rate at which a business’ customers repeatedly buy its products. Depending on the company’s nature, this could be weekly, monthly, or annual, and creates a regular revenue stream. Therefore, it goes without saying then that a higher retention rate is one of the most desirable and pursued goals in business today.

If a customer buys a product or service from a company more than once, they become a repeat customer. For example, if 75% of a music subscription service’s customers renew their subscription every month, the customer retention rate is 75% per month.

Every brand needs to worry about customer retention because, as explained earlier, retaining an existing customer is cheaper than making a new one. A company can gain more value from a single customer who comes repeatedly compared to a customer who buys only once. This is because a returning customer continues buying the same product and could consider upgrading to a new product or purchasing another new product or service from you.

Importance of customer retention

Customer retention makes it easier for a business to grow and expand by saving time and effort to reach new customers.

Understanding Customer Retention and Loyalty

Customer loyalty and retention feed into each other but are different. Customer loyalty refers to customers who have a favorable opinion of your business and are likely to expand their purchases from you, engage with your business, and advocate for it. A retained customer is not necessarily a loyal customer.

Important Customer Retention Metrics

Several metrics can evaluate how good your brand is at retaining customers.

For instance, you can look at the average customer lifetime value (ACLV). This metric measures the money a single customer will spend with your business during their lifetime relationship with you. Other important metrics include customer relationship rate, net promoter score, and customer satisfaction score.

Customer relation rate or CRR: This is a highly desirable metric, and successful businesses aim to attain a CRR of about 80-85%.

Net Promoter Score or NPS: Often, after a shopping experience, you are asked – ‘On a scale of 1 to 10, how likely are you to recommend the service or product to a friend?’. That right there is the Net Promoter Score. This measures the loyalty and enthusiasm of customers. A delighted customer experience would lead to a higher NPS.

Customer Satisfaction Score or CSAT: This relatively straightforward calculation represents a percentage. To calculate this, you must add all positive scores, divide them by the total number of survey participants, and multiply it by 100.

While customer retention can seem like an abstract concept, there are proven and actionable steps companies can take to retain more customers.

42% of customers are willing to pay more when they get a more welcoming customer experience. If your brand delivers a delightful experience to the customer, it is more likely that they will come back for more. That’s why curating your customer experience is worth the effort.

Some ways customer experience can be enhanced are:

  • Having a friendly and honest sales approach
  • A responsive and helpful customer support set-up
  • Creating a frictionless experience for buyers
  • Taking customer feedback seriously and working on it
  • Personalizing customer experience

An increasing number of brands are now focusing on personalizing customer experience. 90% of leading marketers believe that personalization dramatically contributes to business profitability. By offering a tailored way of interacting with customers on various channels, personalization can help deliver unique experiences to users. Brands can now provide personalization at scale using automation tools.

Customer Engagement Platforms and Customer Retention

Customer engagement refers to how customers engage with your brand. Customer engagement happens to be one of the critical drivers of conversion and retention. As more brands work towards engaging better with customers, they use customer data to evaluate and improve engagement. Customer engagement platforms, or CEPs, enable marketers to do just that.

A CEP comprises tools that help analyze customer behavior and interact with them at various touchpoints. Effective CEPs like MoEngage allow brands to track the customer journey and make contextual and personalized offerings. This way, customers are bound to feel valued by the brand. Engagement platforms contribute substantially to retention, be it smooth onboarding or making personalized, timely recommendations.

MoEngage Dashboard

Choosing the right CEP for your business depends on marketing goals, costs, existing team skills, resources, budgets, and data privacy.

Exclusive Experiences: Driving Retention

An exclusive experience means providing something unique to a particular set of your regular repeat customers that is unavailable to others.

When you create an exclusive experience for a customer, you signal to them that you value them and are willing to go the extra mile. Exclusive experiences can significantly help with increasing the customer lifetime value as well as the customer retention rate.
An example of an exclusive experience is your very own Amazon homepage. Have you ever noticed how Amazon’s app homepage recognizes your latest obsessions and recommends what you’re looking for?

Amazon dashboard

Another lesser-known example is that of Tommee Tippee, a manufacturer of baby products. It so happened that an autistic child named Ben would drink only from the Tommee Tippee sippy cup and wanted the replacement of a Tommee Tippee sippy cup that was a limited edition and discontinued. On tweeting this to the company, Tommee Tippee declared a limited run of 500 finished cups, especially for Ben.

Here’s how brands can create exclusive experiences for their customers:

  • Get customer feedback
  • Tap into social listening
  • Leverage AI tools for a razor-sharp customer focus
  • Personalize at scale at various touchpoints
  • Engage in real-time

Rewards: Reinforcing Retention

Another way to cultivate customer retention is through a loyalty program or rewards system. This can incentivize a customer to spend more on your business.

Shopify Retention strategy

An example of a super successful loyalty and rewards program is that of Sephora’s Beauty Insider. The program has over 17 million loyal members, accounting for nearly 80% of Sephora’s annual sales. The unique program allows members to choose how to use their reward points, including limited edition products and in-store beauty tutorials.

Customer Retention and Word-of-Mouth Marketing

Customer retention can kill two birds with one stone. It doesn’t just provide repeat business for your company; it can also lead to word-of-mouth marketing. This means that customer retention can also lead to an increase in your customer base.

Evernote referral program

92% of consumers in a survey believe their friends and family over any kind of advertising. That’s the power of word-of-mouth marketing.
There are some proven ways to generate word-of-mouth marketing through leveraging loyal customers.

How to generate positive word-of-mouth marketing:

  • Asking customers to review your business online
  • Offering a referral program
  • Tapping into influencer marketing
  • Offering free samples or trials

For example, brands like Uber have a brilliant referral program to get new customers and reward existing ones.

Uber referral program

Retention Rates and Lifetime Value

Retention rate is the percentage of customers you retain over a specified period. Customer lifetime value (CLV) is the amount of money that a single customer spends on your business throughout their relationship with your business.

A higher retention rate can lead to higher lifetime value. Here’s how: If a customer remains with your business for an extended period, they will tend to spend more money, which increases their lifetime value.

How to improve retention rates and lifetime value:

  • Offer referral programs
  • Make targeted, personalized campaigns at the right touchpoints
  • Make engaging content
  • Listen to your customers
  • Leverage up-selling and cross-selling strategies

Personalization in Retention Strategies

Marketing with AI-driven personalization

By creating exclusive experiences for your customers, personalization can help with customer retention. Personalization aims not just to make the customer feel valued but also to offer products and services that are best suited to that particular customer at the right time. For instance, a customer may have left a product in their shopping cart because they may not have funds. If you offer them a customized deal, they will likely buy and return, too!

Leveraging customer data plays a critical role here. If you know why your customer is coming back or, instead, why they are not, you can hit just the right spot in customer experience.

There are several tools for personalized retention based on the nature of your business. Some of these are Google Optimize, OptiMonk, Proof, and Segment. With the advent of AI, several of these tools use AI technology to personalize your marketing efforts further.

Spotify again reaches the top here with its “Spotify Wrapped.” The streaming service gives each customer a comprehensive report of what they listened to throughout the year, getting them to hear more and explore more music genres.

Spotify Wrapped: Retention Strategy

Brand Reputation and Customer Retention

Impact of Brand Reputation on Customer Loyalty

How is brand reputation related to customer retention? A better brand reputation makes customers feel they’re getting a good deal when they shop with your brand.

One of the primary hesitations that a customer has when shopping is which brand to trust. A good brand reputation is likely to make the customer trust you more. For example, consumers tend to buy more from brands like Apple because of their reputation for attention to detail.

Here’s how you can improve your brand reputation:

  • Have a consistent online presence
  • Enhance customer service
  • Have robust crisis communication strategies
  • Deliver what you promise
  • Take feedback and reviews seriously

Emerging Trends in Retention Strategies

Emotional loyalty: Individuals with high emotional attachment choose their preferred brand for a specific item 82% of the time. Think of a brand like Barbie or Lego—generations have used them as go-to brands for gifting. More brands focus on creating a solid emotional bond by comprehending customer preferences, behaviors, and pain points.

Gamification: Is retaining customers a challenge? Gamify it! That’s what Nike did with its “Nike Run Club.” The brand makes it competitive and rewarding for customers while engaging with or using their product.

Nike Run Club: Retention Strategy

Self-service Customer Support: In the age of AI and chatbots, customers should be able to get their queries answered immediately. 24/7/365 is the new normal. Nearly 69% of customers try to solve their issues themselves before reaching out for support. Brands are increasingly adding automated permission in the form of bots to retain customers before they look for a solution elsewhere.

Partnership Loyalty: Brands are partnering with other brands to offer more benefits to loyal customers. For instance, a hotel chain can partner with airlines to provide repeat customers with a bundled experience and better deals.

AI and Personalization: The age of hyper-personalization is here. As AI evolves, personalization is only getting more profound with the available data and the means to leverage that data at scale. Automation tools are getting sharper in informing brands what to do and when to retain customers.

TLDR? Here’s a summary of successful retention strategies:

  • Deliver a spellbinding customer experience so the customer returns for more such experiences.
  • Leverage automation tools and engagement platforms for customer retention
  • Offer your customers exclusive experiences so they feel valued
  • Offer rewards to loyal customers as an incentive for repeatedly choosing your brand
  • Aim to increase the lifetime value of the customer
  • Deliver a highly personalized experience to make things extra special for your customer
  • Maintain an excellent brand reputation so the customer is assured they are buying from the right brand
  • Emotional Loyalty, Gamification, AI and Personalization, Self-Service Customer Support, and Partnership Loyalty are some of the emerging trends in retention strategies

Customer retention is one aspect of the many things brands must focus on to drive sales and ROI. What is your brand doing differently to retain customers?

Acquisition vs Retention: Choosing the Right Strategy

Every downturn in the market cycle sees businesses immediately rush towards customer retention and foregoing all efforts towards acquisition. As the cycle turns, customer acquisition come back into focus and retention takes a backseat.

While this may seem like sound business practice, such drastic shifts in focus could do businesses more harm than good. It can never be a choice between the two; but its more about striking the right balance. One goes up, the other comes down but is not reduced to 0. Its about paying optimum attention to each depending on the market cycle, industry, etc.

The Debate Rages On…

The debate around customer acquisition vs. customer retention is often one that brings out interesting perspectives.

Customer acquisition focuses on initiatives to attract new customers. On the other hand, customer retention comprises efforts to retain existing customers so they keep coming back for more.

Customer acquisition mainly relies on reaching out to prospects and warming up cold leads. Retention relies on understanding your current customers’ pain points and enhancing customer experience.

Acquisition vs Retention - What is it?

Given that any business would have limited resources, companies are often required to make the tough call on whether to focus on customer acquisition or retention. hese decisions are based on a variety of factors like type of industry, life cycle, etc.

While both acquisition and retention strive towards increasing revenue, they require different approaches. For example, acquisition may focus on strategies aligned with market development and diversification. In contrast, retention typically works in tandem with improving customer support and increasing customer lifetime value (CLV).

Cost Comparison between Customer Acquisition and Retention

Cost Comparison between Customer Acquisition and Retention

Cost involved is one of the prime factors that any business considers before making a choice between customer acquisition and retention. What a business would have to pay for customer acquisition vs. customer retentioncan vary wildly from business to business and industry to industry,. But hey, we can rely on our good old friend “data” to make better decisions.

Sarvana Kumar, CEO of Kovai.co, says that it can cost between five to seven times more to acquire a new customer than to retain an existing customer, depending on your industry. Further, Shaily Verma, Head of Data at Damac, notes that the probability of selling to a new prospect is 2% to 10%. In contrast, the probability of selling to an existing customer is 60% to 70%!

It’s clear that the cost of acquisition is significantly more than the cost of retention.

There are two main reasons for this.

First, people buy from brands that they trust, and building trust in today’s world is expensive.
Second, marketing channels ideal for customer retention (for example, email marketing) are usually cheaper than marketing channels and activities apt for acquisition (for example, lead generation, paid or targeted ads, etc.).

When deciding how much to spend on acquisition and retention of customers, brands need to consider the CLV (customer lifetime value), that is, how much revenue a customer brings in once they are associated with the brand .
But obviously, cost is not the only decisive factor. And of course, companies would need to acquire customers before they can retain them, right?

Still doesn’t settle the debate? Let’s get to the point.

Acquisition or Retention?

Acquisition or Retention?

Jokes apart, here’s what the experts have to say.

“I think no business should have to decide between retention and acquisition because both of them are important.”, says Ankit Bansal, Head of Digital Marketing Strategy at 6th Street, leading online shopping site in GCC. He adds that it’s not an “or” situation, but an “and” situation. Companies need to focus on both, but the proportion of that focus will vary. In some circumstances, brands may want to focus more on acquisition, while in others, they may want to give retention a bigger push.

When to Focus on Customer Acquisition

Customer acquisition is the primary goal for companies in the growth stage. For a new business, with zero customers and zero brand recognition, all effort must be directed towards getting the brand name out there and acquiring customers.

This will have a direct impact on the revenue for the business. But, before they go about acquiring, brands need to ensure that there is a big enough addressable market, the messaging and brand voice are clear, and that there is proper product-market fit, among other things. “It is essential not to go blind,” says Shaily Verma, Head of Data at Damac, underscoring the importance of research in customer acquisition.

Another situation in which customer acquisition is a necessity is when the company is entering a new market. Say, if your company is well-known in Bengaluru, it does not mean people know you in Mumbai too. This is why customer acquisition needs to have primacy during this stage.

Further, at least some marketing efforts need to go towards customer acquisition no matter how large or established the company is. No brand in the world has 100% name recognition. Even Coca-Cola needs to focus on acquiring new customers.

Here are some top-notch examples of how brands have managed to attract new customers:

Shopify has made a big name for itself in a short span of time. This company is behind the success of numerous e-commerce stores. The company has devised innovative ways of getting noticed. For instance, it uses interactive content such as business name generators and quizzes to attract prospects. This type of content is highly sharable and generates a self-sustaining word-of-mouth loop for the company.

Acquisition vs Retention - Shopify

Another new brand that is making waves is TurboTax. This brand runs ads that promise free tax filing services. The catch is only some customers are eligible for free tax returns on the site. While TurboTax may not make money directly from those people, it will still have the potential to drive revenue from those who click on the ad and then find out the filing isn’t free for them, and will proceed to get the filing done anyway. Meanwhile, there are also upsell opportunities for free customers. Such kind of freemium models are a cool way to give customers a taste of your product.

Acquisition vs Retention - TurboTax

When to Focus on Customer Retention?

According to a study by Bain & Company, an increase in customer retention of 5% could improve profits by 25% to 95%! This just goes to show how much potential for revenue generation customer retention has.

Brands would benefit from engaging in customer retention because it’s much more cost-effective than customer acquisition. A company that has built a sizeable base of customers can magnify its focus on customer retention. Further, it is essential to note that customer retention efforts have acquisition impact as well in the form of referrals from loyal customers.

Let’s take a look at how some established brands are distinguishing themselves by building a loyal following.


Customers are only getting more demanding with time as options galore. They expect the same level of service from an online experience as they do from an offline one, and Amazon understands this! The brand stresses on the customer’s journey right from the time a visitor lands on an Amazon page all the way upto checkout. This is by designing a process so seamless that 49% of all Amazon customers give the company the highest marks for excellent service.

Acquisition vs Retention - Amazon

Four Seasons

Another example of stellar customer retention is that of Four Seasons. In business, especially hospitality, it is a non-negotiable to make every customer feel important. The brand has taken proactive steps to cater to every need of their guests by releasing a chat service for guests to get in touch with the staff. The result: their bookings have never been higher.

Acquisition vs Retention - Four Seasons

Now, retention can be tricky in some industries like travel. The travel industry expects customers to be periodic users of their offerings, not too frequent. How does retention work there?

“Although acquisition takes priority in this particular case, retention also plays a big role,” says Namrata Bhatia, Director Marketing at Holiday Factory. “Using data models while humanizing the entire customer experience and also personalizing recommendations can go a long way in creating a base of loyal customers.

In the end, it’s all about finding a way to keep the customer alive in your ecosystem, emails…SMS…whatever it takes! Remember, a loyal customer can become your brand advocate,” she adds. “Ideally,” Shaily says, “your retention should fund your acquisition.”

This is such an eye-opener. Brands need to focus on self-sustaining models to lower burn resulting from acquisition. And who can deny the power of technology in driving optimal marketing efforts!

Considering the staggering amount of data available to marketers, they need to know how to divide the population into clear segments and figure out whom to target, when and how. Leveraging data models can help detect early churn likelihood, and listening to customers can help get to the root cause of customer problems.

Ankit from 6thStreet concludes, “Data drives strategy in both acquisition and retention. While most businesses have access to enough data, what matters is how you use it, else it’s just a wormhole. Is the data actionable in real time? Is it enabling people to make the right decisions? Using automation tools for continuous tracking, testing, and actioning is what brands need to balance their acquisition/retention strategies.”

Consolidating all automation platforms to make sense of the data and building a robust martech stack can make things a lot easier for brands.

Case Study: Uber

When it comes to an interesting mix of acquisition and retention strategies, Uber goes the distance!

A revolutionary idea to ease local transport, Uber came to be in 2011. Since the very start, the company acquired new customers by offering free first rides and massive referral programs. For retention, Uber devised its loyalty program “Uber VIP.”

Most importantly, it leveraged the two-sided review system for both drivers and customers to get feedback and make service improvements. Uber Cash and Reward Program for loyal customers added to customer delight and served as an icing on the cake, or should we say, made the ride sweeter?

The result: Uber’s unprecedented growth, with Uber drivers completing 7.6 billion trips in 2022, a 20.6% increase y-o-y.

Uber is indeed an epitome of how acquisition and retention strategies can be intertwined into a self-sustaining loop.

Acquisition vs Retention - Uber

TLDR? Here’s the long and short of it:

  • Looks like the never-settled debate of customer acquisition vs. retention will alas never be settled.
  • Both acquisition and retention take priority in different cases depending on the industry, brand maturity, customer journey, and so on.
  • While the costs of acquisition are certainly higher than retention, acquisition is an essential step for brands, particularly the new ones or those entering a new market or geography.
  • In the end, it isn’t an “either-or” question, but a balance that combines both in relevant proportions.
  • Consolidating marketing automation tools and making robust use of data can help brands strike the requisite balance between acquisition and retention.

How to Build a Brand and Customer Loyalty [#GROWTH19 Wrap-up]

In today’s hyper-connected age, there is no single way to connect with your customer. Customer journeys have become more complicated than before, and marketers have to constantly find ways to break the clutter and engage with customers through multiple channels such as e-mails, SMSes, apps, websites, offline, etc in order to boost customer loyalty.

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How to Build a Brand and Customer Loyalty

We invited Mrinal Singhal, AVP Marketing, YatraSharad Harjai, Sr. Director Marketing, Grofers, and Amit Tandon VP Marketing, HealthKart to learn how they have succeeded in building their brand and a robust customer loyalty program across the digital and offline platforms. The panel discussion was moderated by Yashwant Reddy, VP at MoEngage.

We bring you the excerpts from the discussion.

How do you engage customers across different channels such as paid media and social media? How do you decide what kind of message should be used?

Sharad: With so many channels at our disposal, maintaining the consistency in the brand’s language is important. It is important how you position each product. It’s not just the text; even the design should be taken care of. It should give the buyer the confidence to buy from the portal. To maintain consistency, we have built a team architecture that’s less focused on calling people channel owners such as social media head, or a digital marketing head.

Instead, we have divided the entire team into two areas based on metrics – acquisition and retention. So, if a person is driving a campaign based on one metric, then the focus is not on which channel to use to communicate with the customer. The focus is on the larger metric, and that brings consistency in the campaign. If the campaign is to improve downloads and conversions, everyone involved in the campaign has to be a part of the entire process. Everyone works cohesively for the larger benefit of the metrics.

Mrinal: We have multiple touchpoints to explore, so the challenge is to get the consumer’s attention. At Yatra, we follow two metrics to engage with the customers. One, to keep the messaging very simple. We must understand that we are sending a message to the consumers and not marketers. The second thing we stress upon is the user’s journey.

We ensure that the consumer’s journey from communication to the point where they make a booking is seamless and does not have any broken/slow links. So, irrespective of whether the campaign is large or small or covering different touch points, we ensure the basic principles of simple messaging and simple customer journey is followed. In terms of team structure, we do not function in silos. Whenever there is a business challenge to be solved, all the channel experts sit together to decide on the best channel to work upon.

Amit: Engagement is less of a challenge for us as customer loves to engage in health and wellness especially when they want to know more about particular products. In fact, we get a lot of inbound queries. For us, the challenge is maintaining a consistent omnichannel experience, which we are trying to build now. We are trying to integrate our physical footprint with the digital footprint to provide a superlative experience to our customer.

For example, if the customer buys a product online, they should be able to return it at the nearest store, or they can buy a product online if it is not available at a store. In terms of how our team is structured, we have a common centralized marketing team to provide a consistent experience in both digital and offline stores. We also have a centralized training team that trains every storefront executive about the domain and store ethics to ensure that the messaging on digital medium and in-store remains consistent.

The consistent experience has increased the Customer Lifetime Value (LTV). The customers engage more with the portal because of the relationship they have developed with the store.

What metrics do you measure to track the health of growth besides vanity metrics such as installations, downloads, and the number of new users?

Sharad: For us, the Northstar of our metrics is the monthly wallet share the consumer gives to Grofers. A typical family of 2-3 people spends around 7,000 to 8,000 Rs each month on grocery. Global survey says that the maximum share any offline or online platform can have for the minimum amount spent on grocery by a family is around seventy percent. Achieving this kind of share is a challenging task as you cannot lose track of a customer at any moment. You have to be at the top of things. Your engagement channel should be in tune with how your customer buys.

Customer engagement must revolve around how the customer buys every month. For example, customers do monthly top-ups on the day the salary is credited. By the end of every month, we analyze the wallet share we could get from a customer. We also monitor the replenishment cycle when it comes to eatables. One of our best resulting engagement campaigns is where we understand when a customer is going to buy what.

It is easy to find out how does the household look like, how big is it and depending upon when a customer is going to buy a product, we work on the reengagement campaigns. It is one category that has given us great results.

Mrinal: Unlike groceries, travel is not a very frequent use case. An average customer makes two to four bookings in a year and they look for the best deals in the market. Apart from acquiring new customers month on month, the key metrics that we track is the 9O-day repeat trait. We monitor how the lifetime value looks like – is it moving up or down or is it flat? These are the two metrics we measure to determine if we are moving in the right direction.

Amit: We look at two metrics – repeat and new. In our category, we always have new customers. However, repeat metric is equally important for us. Within repeat, we see if we can upgrade the customer’s experience and move them to a more core product. We track repeat records regularly to check out the health of our business and to figure out if there was an event that led to the exit of our loyal customers. Given that the target group is quite finite, Net Promoter Score (NPS) becomes our core metric. We do weekly NPS checks and keep on changing our benchmarks to track the NPS.

Do you want to discuss a specific use case on how loyalty programs can drive repeat business?

Sharad: In 2O17, Grofers moved from a marketplace model which served multiple categories to an inventory-led, grocery-focused e-commerce model. We have become more of an e-tailer than a typical e-commerce company. We have refined our brand positioning with the lowest price guarantee for groceries and optimized the cost of operation as much as we can so those benefits can get passed to the consumer in terms of prices.

Loyalty program was a big step in the same direction. We started a Smart Bachat Club, wherein If you pay a small membership fee each month, you will get access to even lower costs on the products. It strengthens our core proposition of pricing itself. Right now, 66% to 70% of our transactions get done through the members of the Smart Bachat Club. Eventually, we plan to build an online cost structure like DMart who offers products at the lowest price. We aim to strengthen our supply chain, so we can reduce the prices even further.

Mrinal: The category we work in is a commoditized category; so something like loyalty does not work. Customers are out in the market to look for the best possible deal. However, there are a handful of customers who are not deal seekers. They seek convenience and come out of familiarity with the platform. The objective is to drive wallet share from those customers and acquire such customers who make you grow at a profitable rate.

Our call centers offer preferential treatment to high-value customers. These services would include faster turnaround time for complaint resolution, a higher authority granted to customer care agents for making exceptions for these customers in order to reduce the turnaround time and deliver better customer experience. All this has helped us to improve the retention rate of the customers.

Amit: We don’t have a structured omnichannel loyalty program. We are working upon it right now. However, just to give a context; unlike Grofers, our objective is not to offer products at the lowest price. In fact, as compared to Amazon and Flipkart, we sell certain products at a premium, because we are focused on profitability. We are planning to segment our customers based on the frequency of purchase.

So someone who frequently purchases from us will be considered a power user. As their LTV is high, we plan to offer them products at the lowest price. We have a significant one-time user base who come in and flirt with the product and fall out of the funnel. For those guys, the pricing will remain premium. We aim to pass on the benefits from the flirtatious user to the power user to avoid losing them to any other platform.

Somebody has asked this question on Twitter. How do you build a different experience for different customer segments?

Amit: Earlier, our segregation system was more conventional. We used to target the top 10 cities, then the next 25, and finally the rest of India. It was working well in the initial stage. We were dominant in the top 20 or 30 cities, but now the trend is changing. We see a lot of volume from the rest of India. So now we are segmenting the customers purely on the basis of purchase.

We have a power user segment, and then we have a flirtatious user, a deal hunter who looks for best deals on different portals, and a onetime user. So it is like a VIP club (power user) vs. a non-VIP club (rest of users). Our messaging differs according to it.

Mrinal: One segment that we focus on is our high-value customers. The other segment is the SME segment that travels more for business purpose. For the SME segment, we have created a separate platform within our yatra.com ecosystem, wherein customers can avail corporate fares. They also have the flexibility to reschedule their flight tickets at almost no extra cost, get free meals onboard, etc. These are the two different segments that we have identified. The rest of the customer base falls under the regular category, which we try to capture through regular promotional events that we do on our platform.

Sharad: For us, it’s slightly different. We don’t and can’t have different experiences for different customers. We have to maintain consistency for everyone because for every customer the rate at which they get the product matters the most. It is not just one or two products per order. It is a basket of 16 to 18 products per order. So, if we do not maintain consistency for every customer, it will work negatively for us. However, we take a lot of initiatives internally to segment and understand the customer well. We look into different parameters and use algorithms to assign churn scores, conversion scores, etc to drive segmentation. We look at those data and based upon that drive our different initiatives.

Thank You, Sharad, Mrinal, and Amit for sharing your valuable insights with us on how you have built customer engagement for your respective organizations. We have come to understand that measuring the right metrics, building customer loyalty programs, and communicating the right message to the right audience is the key to successful customer engagement.

How Marketing Automation Enhances Customer Experience in BFSI [Marketer Spotlight]

Editor’s note: The trend in 2020 leans toward financial apps that offer great convenience for consumers and business opportunities for the BFSI organizations themselves. A study by Business Insider Intelligence’s Mobile Banking Competitive Edge study suggests that 89 percent of consumers – and a whopping 97 percent of millennials – use mobile banking. The bigger problem, however, is that traditional BFSI companies often lack the technical and pragmatic expertise to engage these “digital-only” and “mobile-only” users. They try to adapt their web and brick-and-mortar customer service best practices for the mobile crowd, only to find that their efforts fall short. Mobile banking can be a particularly vexing environment for financial institutions as they try to acquire, upsell, retain, and engage consumers throughout the entire customer lifecycle. We caught up with Paurush Sonkar, Head Online Sales at Bharti AXA Life Insurance and Founder of BFSI Digital Stallions Forum to understand how technologies such as marketing automation and AI can help the BFSI sector fast-track their digital consumer engagement.

Please share a brief introduction of your background and a few interesting insights from any of the projects you have led.

Paurush: I completed my MBA in the 2002-2004 Batch and started my career with ICICI Lombard General Insurance as a management trainee. I was part of a team called the e-Channel. I started my career on the digital side when digital was all about microsites and e-mailers. As the medium gained prominence, I grew with the medium both from an experience and a knowledge perspective. I have a holistic perspective of digital and financial services, having worked in General Insurance, Life Insurance, Broking, Mutual Funds, NBFC, and more.

The most exciting project that I can recollect was in 2011-2012 at Aditya Birla Capital (Erstwhile Aditya Birla Financial Services Group). I worked alongside the central marketing team to revamp all the digital assets across multiple lines of business, 7 to be precise. The project encompasses website UI / UX, website design, SEO, essential social media presence, content, analytics, and more. It gave me a 360-degree perspective and put me at the helm of the project. I yet remember it was called ‘Project Ultimate.’

Another interesting project was when we launched the online term business and social media at Future Generali Life Insurance. We were a late entrant into social media, so we worked hard to get it right. Within the first year itself, our Twitter campaign won an international award.

We are currently in the midst of a revolution in terms of marketing practices. This is also because consumer behavior has transformed drastically over the last few years. Consumers today are more digitally active. They do not necessarily need a salesperson to lead them to the point of sale, so the role of marketing has shifted from supporting the sales function to engaging with the consumer across the purchase journey.

How have the changing dynamics in the marketing ecosystem impacted the banking and financial services sector?

A lot has changed in the last decade; however, the pace was further accelerated in the recent 4-5 years with internet access nearly free/super affordable. I see a host of things working in tandem to give rise to what we could call the ‘Digital Consumer.’ People began to use wallets to make payments, bill payments moved online, and so did movie tickets and food ordering. If you step back and reflect, all this has not happened overnight, but it has occurred due to sustained efforts by all the stakeholders, and members of the digital ecosystem.


For the BFSI sector, the birth and rise of the ‘Digital Consumer’ has been a boon and has the following advantages:

  • Cheaper acquisition cost
  • Faster turnaround time
  • Direct control of the customer (no intermediary involved)
  • More comfortable to educate a customer by way of videos and tools
  • Curbing misspelling, which was a rampant practice and seamless servicing options by way of chatbots, social media channels, etc.

The sector has also seen the birth of pure-play online financial players who neither own a brick-mortar branch nor do they sell through any other offline medium. A whole new sector within the banking and financial services called Aggregators/Comparison portals have taken center-stage in this economy which I term as ‘The Economy of Affordable Multiple Choices.’

From your experience, can insurance and financial services rely on an automation tool to connect with their customers? What are some benefits or improvements you’ve seen when these organizations use a marketing automation platform?

Well, my answer is an emphatic YES. Taking it a step ahead, I’ve seen that AI Tools are far superior to even a personal touch interaction between a sales executive and the end customer. BFSI brands are aware that an AI Tool is in a way their 24X7 Branch, their dependable salesman, and the best part is neither does this salesman take a holiday nor does he take tea & smoke breaks, and yes he works over the weekends too.

Let me give you an example of a brand where I headed digital marketing and online sales, and we implemented an AI-based marketing automation tool end-to-end. We saw the following benefits:

  • We engaged users better due to personalized content.
  • We reduced the drop-offs both from site and transaction section – business increased by 35%, conversions via social media enabled campaign was the biggest beneficiary, and the list is long.

In summary, the AI-based Marketing Automation tool paid for itself in a few months and then became a revenue stream in itself.

Paurush 2

At what stage/point in the business does a BFSI company need a marketing automation platform? Are there any ways to evaluate this need for the organization?

I think digital encompasses every touchpoint and process in a business/brand these days. Thus the direct answer is that an AI-based marketing automation tool should have been made ‘yesterday.’ However I am glad to see that most brands are now moving in the right direction, a new age insurance provider signed up for a tool on these lines even before they launched operations, and that is, in my opinion, a bold and the right decision. The company engaged, sold, and serviced their first customers through the tool, and is going strong. The most significant advantage is they are now connected to the customer, and vice-versa like none of their competitors are.

Banking and financial service brands can evaluate the need very quickly by asking themselves the below stated five questions:

  1. Do I want to bring down my acquisition cost?
  2. Do I want to target a customer who is the ideal fit (target audience) for my product or is the audience spread too thin?
  3. Do I want to know each customer individually rather than classify them as 1 of the ten broad profiles that my digital consultant told me about?
  4. Do I want to cross communicate across channels with the same customer?
  5. Is my customer a digital-first customer?

At this stage, I would also like to congratulate MoEngage on their special program to support startups by giving them complimentary access to their tools and marketing credits. It is such initiatives that make up the ecosystem worthy and a constantly evolving space.

Thank you, Paurush, for your kind words about MoEngage.

My next question to you is, how can a BFSI company make that purchase decision? Are there any guiding principles to follow?


I’ve seen most banks, insurance, and other financial service institutions look to check these 5 boxes while evaluating a marketing automation platform vendor:

  1. A mobile-first approach to the platform.
  2. Extremely easy to implement – Quick and cost-effective.
  3. In house BFSI practice – A special focus across the vendor teams in BFSI use cases and requirements makes them a natural choice.
  4. Advanced features such as geofencing, Push Amplification, and more.
  5. Last but not least, a proactive team and a reasonably priced solution.

I must compliment your team here – the MoEngage platform fits right well on all these points.

In fact, as the founder of BFSI Digital Stallions Forum, where we have 200+ CMO’s and Digital Marketing Heads / Professionals across 105+ BFSI Brands, we do a lot of knowledge sharing and discussions on best practices. I have personally deep-dived and evaluated multiple AI Marketing Automation solutions and can confirm that MoEngage is a natural choice.  In fact, basis the response, we’ve now introduced members of the Digital Stallions Forum – UAE to MoEngage so they too could take their digital marketing to the next level.

Can a BFSI company build its marketing automation platform ground-up? Are there any specific advantages of integrating a ready-to-use platform?

Paurush 3

If any financial services brand plans to build their automation platform, I wish them good luck. A chef should focus on cooking the fish and leave the fishing to the experts for he is trained to use the knife and not the fishing rod.

The benefit of integrating with a ready to use can be best summarized in one line from a Hero Honda campaign that goes way back to the 1980’s – “Fill it, shut it, forget it.”

Sit back and watch while the AI tool takes over and does your work, only efficiently.

In terms of customer engagement and experience, where do you see banking and financial services headed over a decade from now?

I am a firm believer that the BFSI sector is set for exponential growth. As per statistics, India has nearly 190-200 Million people who do not have a bank account leave aside insurance, mutual funds, and other financial products. However, what these users have is a mobile phone and internet connectivity.

Some of the key drivers of growth in today’s world would be; growing smartphone penetration, free/cheap internet, exposure to media platforms which makes a person aspire for more, migration of people to bigger towns and cities, growing disposable income, and more. This for the banking and financial services sector- I can confidently say that we are yet only getting started… The way ahead if tough but full of opportunities.

Thank you, for sharing your advice and insights, Paurush. This is very helpful for marketers who are keen to grow their brand’s mobile share of the business. Readers, for more conversations on marketing automation in BFSI, connect with Paurush Sonkar.