Search as a Tool for Customer Retention

By David Levy, Associate Director, Marketing & Business Development

I’ve had a lot of conversations recently with advertisers around using search as a tool for customer retention. As search marketers, we often view search as an acquisition tool, but often forget that for most advertisers it is much more expensive to acquire a new customer than to retain one.

But, the question becomes how can we leverage search to help advertisers attain this goal?

I have a few thoughts:

  1. Customer Segmentation: search marketers are proficient in data analysis. If advertisers mine through their internal customer database to build profiles around those customers that stay with them the longest, then we can apply those profiles to our search campaigns. This ensures that, while we are still having to pay a price for acquiring that customer, they will be likely to stay longer and thus deliver a higher Lifetime Value than a different customer that cost the same price to acquire, but didn’t fit the longevity profile.
  2. Social Networking: while we’re all still trying to figure out how to leverage social media as an acquisition tool, what about using it as a retention tool? This is perhaps the best platform by which to have meaningful interactions with your most valued customers. Continue to show them how valuable they are. Deliver them special offers. Entice them to recommend your brand to their friends. Create unique and engaging content. The more emotionally connected a customer feels to a brand, the more likely they are to stay with it over the long term. Social media outlets are a cheap, effective way to get this done… and as search marketers, we can help ensure that content is optimized around topics most valuable to customers and that it is able to be found.
  3. Customer Re-Visit Experience: once you’ve got a sense for the type of customer that generates a high Lifetime Value, the key is to monitor their activity when they come to your site to be sure you’re giving them what they need on subsequent visits. Keyword level audience analysis, combined with cookie tracking, enables users who re-visit a website to be served with relevant offers based on the purchase habits of other customers who fit a similar profile. A great example of this is the Omniture Recommendations product. By continually providing new and unique value to customers each time they engage with your brand, you’ve got a greater opportunity to retain them.

Clearly, these are just a few thought starters. I’d love to hear from you, as this is a nut that certainly has yet to be cracked within the world of search.


Kyle Glass said...

I agree 100% with your position that Search is more than an acquisition tool. You have brought up several interesting points; I will make a few comments about Search as a retention tool and Search LTV.

While at a major cataloger (Top 50) I was promoted from LTV analyst to Supervisor of E-commerce Analysis, which included managing the Search program. I found that about 50% of search orders were to existing customers. When keywords were categorized into brand (variations of the business name) and non-brand (all other terms); 60% of the orders from brand keywords were from existing customers, non-brand was 40% existing. Existing customers searching on non-brand keywords certainly were not as loyal as we would have liked and a robust Search program was necessary to capture those sales, which could have easily gone to a competitor.

With regard to LTV, my analysis showed the LTV for customers acquired from Search was slightly above the corporate average. The reason was they were much less likely to use a promotion code when ordering (less free shipping) and had very low processing costs not only due to taking the order on the website but also because of fewer returns. Those acquired on brand keywords had a LTV about 10% higher than those on non-brand keywords. Keywords associated with the items on the cover of the catalog or prominent on the website homepage (seasonal items or promo priced) acquired customers with the lowest LTV of non-brand keywords. The customers acquired on those expensive seasonal Christmas keywords had the lowest LTV.

Great conversation!

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