At a time when cost-conscious consumers are faced with more choices than ever in a volatile environment and customer acquisition costs have soared to unsustainable highs, new research from customer engagement platform Braze examines engagement trends over the past year.
The firm’s third annual Global Customer Engagement Review, conducted with research partner Wakefield Research, finds that even more marketers are investing in tools and strategies that drive activation and loyalty to meet consumers’ demands.
“Consumers today have high expectations for real-time, personalized communication, seamlessly choreographed across the channels and platforms they prefer, in a way that feels relevant and human. At the same time, marketers are under tremendous pressure to deliver greater return-on-investment, often with smaller teams,” said Bill Magnuson, cofounder and CEO of Braze, in a news release.
“More than ever, it’s important for brands to invest in effective tools that enable teams across an organization to combine efforts to quickly reach shared goals,” said Magnuson. “With the right tools, strategies, and expertise, brands can create meaningful experiences that delight consumers, drive value and loyalty, and drive long-term revenue growth.”
Key findings from the report include:
The rise of retention as a strategy for marketers to defend their base
The report shows that brands are increasingly focused on defending their base, which is no surprise given the current environment. By pivoting to a retention-led strategy, marketing leaders acknowledge that delivering customer value helps build brand value and loyalty over time—and marketers are prioritizing their spend accordingly. In 2022, 45 percent of brands said they spent more than half of their marketing budget on retention, up from 33 percent in 2020.
Over the past three years, the researchers saw a 36 percent rise in the percentage of surveyed companies that are investing the majority of their marketing budget in connection with customer retention. And overall, data shows 83 percent of the surveyed global companies say that their marketing budgets will actually increase in the next 12 months, suggesting a major surge in marketing spend as compared to 2020, when only 60 percent of surveyed companies said they planned to increase their budgets.
Leveraging personalization can help marketers break through the noise to reach consumers
One of the most impactful ways marketers can retain and defend their customer base is through personalized, relevant engagement that better meets customers’ needs and provides exceptional experiences at the right time, in the right place. As 99 percent of surveyed marketers say they will shift their customer engagement strategies as consumers tighten their everyday spending, brands should be well-positioned to better meet customers’ needs and provide exceptional experiences that drive growth. Additionally, brands that leverage cross-channel strategies can drive a 55 percent higher retention rate across a 90-day span, as compared to engaging via just one channel.
Understanding real-time data is crucial to executing personalized retention strategies
Brands today struggle with data management, and effectively understanding and activating data—especially real-time data—is a crucial part of executing personalized retention strategies. Without a thoughtful data management strategy, marketers cannot gather or act on real-time insights, and can struggle to create revenue-driving consumer experiences, hindering overall performance. Strikingly, 80 percent of surveyed companies say that they are collecting too much data, resulting in information on hand that they can’t use effectively. As a result, marketers need to be more intentional about what data they collect, while also prioritizing a thoughtful data management strategy that can turn this data into real-time, actionable insights.
In order to combat these data gaps, brands also need to break down the silos between data, engineering, and marketing teams to become more interdisciplinary in their customer engagement strategies. Globally, 60 percent of surveyed brands say that customer engagement is something owned primarily by the marketing team. Notably, 42 percent of surveyed marketers said the top challenge around using data for customer engagement is working with internal data scientists/business intelligence teams who don’t understand marketing priorities, while 38 percent cited a lack of data skills among marketing talent. Now more than ever, marketers that strive to build closer relationships with their data counterparts will be able to better test, experiment, and evolve customer experience in order to improve successful business outcomes.
The report also breaks down tactics that drive business goals—and revenue—across industries such as financial services, health and wellness, media and entertainment, QSR and delivery, and retail and ecommerce. In addition, each industry breakdown features a case study from a leading brand, including Gympass, HBO Max, Hugosave, KFC Philippines, and Majid Al Futtaim.
Download the full report here.
The Braze Customer Engagement Survey was conducted by Wakefield Research among 1,500 marketing executives in markets with a minimum title of VP, working at B2C companies with an annual revenue of $10M across 14 markets including Australia, France, Germany, Indonesia, Japan, the Philippines, Singapore, South Korea, Spain, Sweden, Thailand, UAE/Dubai, the United Kingdom, and the United States. The survey was conducted between December 9 and December 18, 2022, using an email invitation and an online survey. Quotas were set for 500 respondents per region.