The costs to attract a new customer are exponentially greater than keeping the ones you already have. That’s why it pays to invest in retention marketing.
Retention marketing, often dubbed loyalty marketing or customer lifecycle marketing, is not a new concept. However, in today’s world, customers are particular, fickle, and demanding. You need coherent strategies that speak to them directly.
Here is a closer look at what retention marketing is and 6 principles to follow to be great at it.
What Is Retention Marketing?
Retention marketing is a way to engage your customers, keep them connected to your brand, and continue to inform, delight and educate them. In doing so, you’re more likely to build brand loyalty and customer affinity, leading to more return visits and sales.
It’s a shift in approach from new-customer marketing. By speaking to existing customers differently and acknowledging their relationship with you, you’re more apt to have them continue buying. In the end, an effective retention marketing campaign results in more revenue and more profitable relationships. Among the core benefits of retention marketing are:
- Higher Customer Lifetime Value (CLV). When your customers spend more time on your website, you’re more likely to have more sales over the course of their relationship with your brand. The key to retention marketing is to craft email campaigns that compel those return visits
- Higher Conversion Rates. Satisfied customers who return to your website will likely convert to paying customers at a higher rate than new visitors
- Higher Average Order Value. Returning customers are likely to spend more than new customers, especially when directed to higher-priced items
- More Opportunity for New Business. With effective retention marketing strategies in place, you can invest more time and money into acquiring new customers
- Less Cart Abandonment. Retention marketing can tie into abandoned carts and email visitors to remind them of items left behind
Sound Principles for Retention Marketing
With a strategic approach to retention marketing, your organization can more effectively engage existing customers. Building that approach means focusing on some of the fundamental principles that reflect best practices. Here are 6 principles for effective retention marketing.
1. Know Your Customer
Do you know who your customers are? Understanding customers is a foundational task for retention marketing. You need to know what customers’ needs are, their pain points, and their questions.
These fundamentals are key for any marketing. However, for retention marketing, the questions need to be framed based on their previous purchases.
Knowing what the questions will be after they use your product or service lets you speak with them differently. By marketing to these customers based on where their relationship is with you, you’ll be more resonant.
Collecting, analyzing, and using data on your customers helps you build accurate profiles and personas. You’ll be able to build better segments of customers with common traits and message them with what they need.
2. Build a Great Customer Experience
Customers today want relationships with the brands they frequent. These relationships need to reflect all of the engagements they’ve had with you. That means integrating customer interactions across your channels.
The experience needs to go well beyond the sale itself, but encompass sales follow-up, thank yous and check-ins, and customer service. By embracing the relationship and showing customers that they are valued, you are more apt to engender a connection.
Support needs to be available wherever customers are and on any device. That means investing in live chat, AI bots, and well-staffed human support. And those customer service professionals need access to the full picture of the customer relationship.
3. Invest in Data Technologies
Data-driven organizations are far more likely to succeed. Collecting first-party data (information customers give you during engagements) is very important. The need for data has never been more critical, given the deprecation of third-party cookies by Chrome and other browsers.
Technologies today, including cloud storage and data aggregation, allow you to achieve identity resolution and build complete customer profiles. This information can then be used for your retention marketing. It can also be commodified, leading to more revenue opportunities.
Investing in these technologies means an increasing blurring of lines between marketing and IT teams. These technologies allow non-IT staff to manipulate and use data while keeping it secure. That frees up IT staff to focus on more critical work than pulling lists and syncing data.
4. Take an Omnichannel Approach
Today, your customers are going to engage with your brand in many ways. They will visit brick-and-mortar stores and frequent your website. They will use your app and interact with staff in person and online.
The key is to create systems and processes that allow for customer engagements to be available across channels. Make it easy for customers to move from device to device or online to in-person seamlessly.
5. Encourage Repeat Purchases
It may seem relatively obvious, but a key piece of retention marketing is to encourage customers to buy the same products and services again. Sometimes customers forget where they bought a particular item. If your products are consumables, for example, you want to remind customers when it’s time to restock or refill those items.
You also want to encourage customers to buy complementary items that will enhance their original purchase. Accessories, add-ons, and other products that will enhance performance are highly valuable. Your customers may not know that you offer these products or where to find them.
6. Create Exclusivity and Loyalty Programs
Want to make your customers feel really special? Create programs for them that speak to their unique status as an existing customer.
One way to do so is exclusivity. Offer your returning customers the chance to access new products before others or give them a discount that is unique to them alone. Other ideas include sending them inside information about your company or products or holding free webinars.
Loyalty clubs are another effective strategy that gives them the digital equivalent of a coffee punch card. By knowing what they’ve bought, how often, and how much they’ve spent, you can craft loyalty programs that are enticing.
Retaining customers is vital for growing your online business. It’s why you need a coherent retention marketing strategy.
At Retention.com, we help online businesses grow their abandonment revenue and keep more customers coming back. If you’re looking for help with your retention marketing, contact Retention.com today.