cloud, good; retention cloud, better

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 sites, from IoT infrastructure to office documents.

Part of its appeal is its accessibility. Since the only barrier is cost, it has leveled the playing field and given even small businesses access to unlimited computing power – which used to be only available to large companies. Even better, the technology allows tiny startups to grow exponentially without worrying about server crashes or running out of disk space.

Cloud services have unlocked collaboration and growth

The surge in cloud services has created a tsunami of collaboration opportunities. Every company communicates via Slack, Teams or JIRA, holds meetings on Zoom and poring over spreadsheets in Google Drive or Office 365. Thanks to cloud and SaaS, remote working has gone from a benefit to a ubiquitous reality.

The real proof of cloud computing’s contribution to growth? Companies spend a lot of money on this. 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 about $500 billion in 2023.

Essentially, cloud services make any technology faster to use and more accessible to customers, which is why migrating to cloud platforms is inevitable for any business looking to expand its user base.

The next big challenge for the cloud: Become real-time, personalized and unlimited

So far, we’ve examined cloud computing in terms of benefits – how it brought together collaboration and efficiency, made it affordable, and created a level playing field. But let’s change our vantage point for a minute to look at some underserved areas that need cloud services to accelerate and accelerate growth.

And that applies to CRM, engagement and customer experience. Here’s why:

The Demand for Personalization… and the Competitive Advantage

Customers demand real-time personalization. They’re used to Netflix recommending something to watch in advance or Amazon sending real-time alerts for products they’ve favorited. You won’t settle for generic spam alerts sent to the entire database.

According to a McKinsey & Company report on the value of personalization in marketing, a whopping 71 percent of consumers expect companies to recognize them as individuals and understand their interests. And 76 percent of respondents are frustrated when companies don’t personalize them or show they know them.

When you’re able to deliver a relevant, highly personalized experience to your customers right from the start, you have a major competitive advantage over others in your industry. Customers won’t leave if you consistently wow them with the VIP treatment and the type of content they want, which is what drives us to customer loyalty.

The cost of UA vs. retention

Retaining existing customers is more effective and cheaper than acquiring new ones. As Reforge says, it’s the only growth metric driving acquisition, monetization, and virality.

According to a landmark study by Bain & Company, it’s five to 25 times more expensive to acquire a new customer than it is to keep an existing one.

For example, even in our own study of ecommerce apps, we 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 the first week is 47 percent.

In the long run, getting existing users to stay brings more ROI than trying to fill a leaky bucket with new users.

The build vs. buy debate

Third, building this real-time personalization system in-house will be more difficult than buying a cloud service that does it.

Just a quick look at Phiture’s Mobile Growth Tech Stack shows that you have endless possibilities of tools and functionalities at your disposal. But between opportunity cost, technical debt and deficits, and the massive amount of resources required to program a system from scratch, you’ll face an uphill battle all the way should you decide to take the risk, your Build your own real-time customer experience cloud with various point solutions.

On the downside, buying is a simpler transaction: you go with 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, organizations need cloud-based solutions that offer real-time personalization, improve retention efforts, and have a proven lower total cost of ownership (TCO) than creating them in-house.

The time has come for a retention cloud

The solution needs to be more than just a tech stack of point solutions pieced together. It needs to be a full customer engagement cloud – a cloud-based platform that gives your business everything it takes to better understand, engage, and retain customers.

Here is what this service must have to be useful for growth marketers and business owners:

A way to understand user behavior and trends

This is behavior analysis. The more data you have about your users and their behavior, the more relevant your user engagement campaigns will become.

When Taylor watches horror movies or TV series, your streaming app should recommend the latest episode of a new show. Or if Alex orders Thai food for dinner every other Friday, send a push notification every other Friday at 5pm as a reminder to order something spicy.

A way to segment them by behavior

Segmentation is the second key. But beyond mere demographic and psychographic data, a retention cloud should provide a way to segment audiences based on the actions they’ve taken — or might be taking — in your app or website.

Consider that artificial intelligence can be used to predict a user’s possible behavior based on previous actions on your digital properties. When you can segment by predicted outcomes, you have an instant customer retention strategy. Imagine a query like: “Show me all users who are likely to uninstall my ecommerce app in the next 30 days.” The next step is clear: send them a promo coupon or big discount, so they spend money on the app!

A way to influence their decisions

And that brings us to messaging and hyper-personalization. Once you’ve segmented your audience, you want to convince them to take action. Engagement campaigns use multiple channels: email, push notifications, in-app notifications, and text messages. You can retarget them on Facebook and Google. Or use messaging channels like WhatsApp.

However, your retention cloud needs to send them not only generic communications, but also messages that resonate with your audience. This is where personalization comes into play.

If Alex still hasn’t seen the latest season of Stranger Things, an email saying “The Upside Down misses you” would probably be better than recommending Kitchen Nightmares — because it’s relevant to his tastes and past actions.

A way to push boundaries and make all that data usable

The final requirement for a retention cloud to make sense for an organization is to maximize the vast amounts of user data it already sits on.

Data look-back period: Keep in mind that most martech tools only allow 90 days of user history. That means Elena, your five-year-old client, likely received an email or push notification that doesn’t celebrate her loyalty or 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 Elena bought for her wedding last year? The system doesn’t see it and can’t take any action based on it because she’s bought a thousand other things since then.

Machine Learning: Leveraging rich, granular, historical data about a user for more accurate predictions or personalization is a stated business need. Most martech point solutions cannot fully utilize machine learning due to data storage limitations.

With these limitations, organizations are unable to leverage the full potential of user behavior data for personalization, engagement, or retention. And that offers a cloud storage service the opportunity to own the storage space and give companies ways to access and mobilize the data they already have. That is, if they are 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 own way. The fact that this was written on a Google Doc and assigned an editor via Asana, with my edits sent via Slack, proves it.

But a paradigm shift will be imminent if a retention cloud can be built that offers companies the ability to maximize investments in their tech stacks and in the data they own. Expect the world — and earnings across the board — to change for the better when it does.

This article was written by Anand Jain, co-founder and chief product officer at CleverTap. The views expressed are personal.