Cloud computing has made an immense contribution to business and has become the delivery pipeline for every digital service — from streaming media services to e-commerce pages, from IoT infrastructure to office documents.
Part of the appeal is its accessibility. Because the only threshold is cost, it has levelled the playing field and allowed even small businesses access to unlimited computing power — which was once only available to large corporations. Even better, the technology allows tiny startups to grow exponentially, without worrying about crashing servers or running out of hard drive space.
Cloud Services Unleashed Collaboration and Growth
The deluge of cloud services has led to a tsunami of collaboration opportunities. Every company communicates via Slack, Teams, or JIRA, holds meetings on Zoom, and pores over spreadsheets in Google Drive or Office 365. Remote work has gone from being a perk to a ubiquitous reality thanks to the cloud and SaaS.
The real proof of cloud computing’s contribution to growth? Companies are spending big money on it. Gartner predicts that global spending on cloud services will reach over $482 billion in 2022. And according to IDC, public cloud spending will grow from $229 billion in 2019 to around $500 billion in 2023.
In essence, cloud services make every technology faster to use and more accessible to customers, which is why migration to cloud platforms is inevitable for any company wanting to scale its user base.
The Next Big Challenge for Cloud: Become Real-Time, Personalised, Unlimited
Thus far, we’ve examined cloud computing from the benefits standpoint — how it has brought together collaboration and efficiency, making it affordable and levelling the playing field. But let’s shift our viewpoint for a minute to look at some underserved areas that need cloud services to step up and catalyse growth.
And that’s in CRM, engagement, and customer experience. Here’s why:
The Demand for Personalisation… and the Competitive Advantage
Customers demand personalisation in real-time. They are used to Netflix recommending something to watch up front, or Amazon sending real-time alerts for products they’ve favourited. They’re not going to settle for generic, spammy alerts sent out to the entire database.
In fact, a whopping 71 percent of consumers expect businesses to recognise them as individuals and know their interests, according to a report by McKinsey & Company on the value of personalisation in marketing. And 76 percent of those surveyed feel frustrated when companies don’t personalise or demonstrate that they know them.
If you’re able to deliver a relevant, highly personalised experience to your customers from the get-go, then you’ve got a major competitive advantage over others in your industry. Customers won’t leave if you consistently delight them with the VIP treatment and the type of content they want, which brings us to retention.
The Cost of UA vs. Retention
Retaining existing customers is more effective and more affordable than acquiring new ones. As Reforge says, it is the single growth metric that moves acquisition, monetisation, and virality.
It is five to 25 times more expensive to acquire a new customer than it is to keep a current one, according to seminal research from Bain & Company.
Even in our own study around e-commerce apps, for example, we’ve found that after the first week, the average retention rate of new users is 24.3 percent. In comparison, the average retention rate of existing users in week one is 47 percent.
In the long run, getting existing users to stay delivers more ROI than struggling to fill a leaky bucket with new users.
The Build vs. Buy Debate
Thirdly, it will be more difficult to build this real-time personalisation system in-house than to buy a cloud service that does it.
Even a short glance at Phiture’s Mobile Growth Tech Stack shows that there are endless options for tools and functionalities available to you. But between opportunity costs, technical debt and deficit, and the massive amount of resources necessary to code a system out of nothing, you’re going to face an uphill struggle the entire way should you choose to take on the risks of building your own real-time customer experience cloud using various point solutions.
On the other hand, buying is a simpler transaction: You bet on a proven solution that already works and let the SaaS provider worry about maintenance and upgrades.
Where does that leave us?
Faced with the demand for relevant content, businesses need cloud-based solutions that give real-time personalisation, improve retention efforts, and are proven to have a lower Total Cost of Ownership (TCO) than building it yourself.
The Time Has Come for a Retention Cloud
The solution has to be more than just a tech stack of point solutions stitched together. It needs to be a complete retention cloud — a cloud-based platform that gives your business everything necessary to understand, engage, and retain customers better.
Here’s what that service will need to have in order to be useful to growth marketers and business owners:
A Way to Understand User Behaviour and Trends
This is behaviour analytics. The more data you have on your users and their behaviours, the more relevant your user engagement campaigns become.
If Taylor watches horror movies or TV series, your streaming app should recommend the latest episode in a new show. Or if Alex orders Thai food for dinner every other Friday, send a push notification every second Friday at 5:00 pm as a reminder to order something spicy.
A Way to Segment Them by Behaviour
Segmentation is the second key. But beyond mere demographics and psychographics, a retention cloud should have a way to slice audiences by the actions they’ve taken — or which they might take — on your app or website.
Consider that artificial intelligence can be used to predict the possible behaviour of a user based on previous actions on your digital properties. If you can segment by predicted outcomes, you have an instant strategy for retention. Imagine a query such as: “Show me all users who are likely to uninstall my e-commerce app in the next 30 days.” The next step is clear: send them a promo coupon or a major discount to get them to spend money on the app!
A Way to Influence Their Decisions
And that brings us to messaging and hyper-personalisation. Once you’ve segmented your audience, you’ll want to persuade them to take action. Engagement campaigns utilise multiple channels: emails, push notifications, in-app notifications, and text messages. You can retarget them on Facebook and Google. Or use messaging channels like WhatsApp.
But more than simply sending them generic communications, your retention cloud needs to send messages that resonate with your audience. This is where personalisation comes in.
If Alex still hasn’t watched the latest season of Stranger Things, then an email saying “the Upside Down misses you” would probably do better than recommending Kitchen Nightmares — because it’s relevant to his tastes and his previous actions.
A Way to Break Limits and Make All That Data Actionable
The final requirement for a retention cloud to make sense to a business is to maximise the massive amounts of user data that it’s already sitting on.
Data Lookback Period: Consider that most martech tools only allow 90 days of user history look back. That means Elena, your customer of five years, is probably being sent an email or a push notification that doesn’t celebrate her loyalty or even give her any sort of VIP treatment.
Data Granularity: Many modern marketing tools and CRMs are even limited to 250 data points per user per month. So those diamond earrings that Elena bought last year for her wedding? The system won’t see it and can’t take action based on it since she’s bought a thousand other things since then.
Machine Learning: Leveraging rich, granular, historical data on a user for more accurate predictions or personalisation is a stated business need. Most martech point solutions cannot leverage machine learning fully due to data storage limitations.
With these sorts of limitations in place, businesses can’t unlock the full potential of user-behaviour data for personalisation, engagement, or retention. And that presents an opportunity for a retention cloud service to own the space and provide companies with ways to access and mobilise the data they already have. That is if they’re willing to offer unlimited access to data lookback periods, or data granularity, and allow companies to send messages at scale.
The Retention Cloud is the Future
Cloud services have already changed the world in their way. The fact that this was written on a Google Doc and assigned to an editor via Asana with my revisions sent via Slack proves that.
But a paradigm shift is set to happen when a retention cloud can be created to offer companies the ability to maximise the investment in their tech stacks and in the data they possess. Expect the world — and revenues across the board — to change for the better when it does.
This article is authored by Anand Jain, Co-founder and Chief Product Officer at CleverTap. The views expressed are personal.