Many businesses work to acquire as many customers as they can to increase profits. However, the fact is that there's potentially more revenue in retaining those customers. The many advantages of effective customer retention make it important to focus on retention marketing as much as other efforts.
Here we'll dive deep into retention marketing, its many benefits, and some strategies that you can use to retain your customers in the long term.
What is retention marketing?
Retention marketing entails marketing to existing customers to encourage repeat business. It keeps those customers loyal for as long as possible after initially becoming customers. In addition to generating repeat orders, retention marketing entails increasing these customers' average order value. It helps to create a steady, sustainable revenue stream that fuels the company's growth. Ultimately, the end goal is to maximize the average customer lifetime value (CLV) as you continue to hold onto those loyal customers.
An example of retention marketing
One example of retention marketing could entail making personalized product recommendations to current customers. A business could send an email, a push notification, or another type of message to recommend products based on customers' order history and interests. If the customer had a good experience with their initial purchase, they'll be likely to return for more purchases, especially if they can find more products that are relevant to their wants and needs.
A more specific example of this would be eCommerce giant Amazon. It often recommends related products to customers based on not only the products they've purchased but also viewed and shown interest in buying. These relevant recommendations can encourage customers to return. The rewarding experience of subscribing to Amazon Prime also enables the brand to maintain a ~90% retention rate through annual Prime subscriptions.
Retention marketing vs acquisition marketing
While retention marketing is all about retaining customers you've already acquired, acquisition marketing involves obtaining new customers. Acquisition marketing is important when attracting new customers, but it should never be a company's sole focus. You can do very well at getting new customers to buy from you with acquisition marketing efforts. However, your collective marketing efforts won't truly pay off unless you can effectively retain your customers. You'll want to focus on retention marketing to maximize your marketing ROI.
Why start retention marketing?
Over time, it can become increasingly difficult and costly to acquire new customers over retaining existing ones. The costs of acquiring customers are often around five to seven times higher than retaining the existing customers. Additionally, social media ads and promoted posts that reach new customers can often be costly.
Retaining and selling to your current customers is generally easier than the above strategies. By investing in retention marketing, you can prevent customer churn and keep more customers returning for repeat business.
Benefits of retention marketing
There are several key benefits of using paying attention to retention marketing:
- Retention costs less than acquisition
As mentioned above, you can spend as much as seven times more on acquiring customers than retaining existing customers. This number may vary, but it's generally far more cost-effective to focus on keeping your existing customers than it is to try to attract new customers. Retention keeps customers in the funnel, the right strategies can encourage those customers to spend even more.
- Differentiate your brand
Another advantage of retention marketing is the ability to ensure your brand stands apart from competitors. While many businesses focus more on customer acquisition efforts, you can differentiate yourself with retention marketing strategies that regularly engage your customers. These efforts are particularly effective if you establish a strong emotional connection with your customers. Seeing emotionally connected customers can see up to a 306% higher lifetime value. You'll keep your company in the spotlight as you attempt to set yourself apart from far less engaging competitors.
- Increase profitability through loyal customers
Keeping your customers loyal to your brand can also increase overall profitability and returns. Customers who stick with your brand will spend a lot more on your offerings especially if they can trust you to provide them with a consistently great experience.
- Get more valuable feedback
By maximizing customer loyalty, you can also get the feedback you need to inform your future marketing efforts. You can ask customers what their experience is like with each purchase. You can work to efficiently resolve issues that make initially unhappy customers more likely to come back. Also, you can develop more personalized marketing strategies with the feedback you collect to provide tailored experiences.
- Benefit from recommendations
Customers who are continually satisfied with the brands they trust will be more likely to recommend those brands to friends, family, or even strangers through reviews or testimonials. You can also encourage more customers to refer your brand to others with a solid referral program that rewards customers for each successful referral.
- Loyal customers are more receptive to marketing
Customers who are happy with your brand and offerings will want to see more from you. This includes a variety of compelling marketing materials. They'll be more inclined to respond to offers and otherwise anticipate your emails and other marketing content.
These and other advantages make retention marketing essential for any brand as you work to keep your customers returning and regularly engaged. However, you must know how to build the right strategies to get the best results from your retention efforts.
4 retention marketing strategies
The following are some of the most effective strategies to employ for retention marketing:
Gain insights into your customers
You can start connecting with customers through retention marketing by gaining some key insights into your customers. You can collect these insights in a couple of different ways: through first-party or zero-party data.
Using first-party data, you can see how customers navigate your website or app, the pages they view, the purchases they make, and other implicit data. This data will help you map your customer journey. You can use this to optimize the journey for the best experience, which will ultimately keep customers returning for repeat purchases.
Meanwhile, you can collect zero-party data from app users and website visitors who willingly provide information about themselves, their interests and preferences. This can entail requesting customers to complete form fields to provide information. This includes names, email addresses, product preferences, gender, birthdays, and more. You may request this information via everything from contact and order forms to surveys and quizzes.
The more you know about your customers, the more you can cater to their specific wants and needs as you develop your retention marketing campaigns.
Provide efficient customer service
You can also retain more customers by providing top-tier customer service that's responsive and effective. Even if you have the best marketing campaigns, superior product or service offerings, and a navigable app or website, none of that will matter if your customer service is lacking. Whenever customers have any questions or concerns, be sure to address them with the right response. Keep your responses quick and efficient.
In creating the perfect customer service experience, ensure you're easy to get in touch with through multiple platforms. For example, you should allow your customers to easily reach you via email, live chat, social media messaging, and other portals. Also, make sure you either have people who can provide personalized and efficient responses on each platform. You can also use automation solutions to help answer any questions or resolve various issues.
If you can give your customers the experience they expect using their preferred communication methods, you'll be able to more easily satisfy all customers as they connect with your brand. Offering exceptional customer service will go a long way in building a great reputation for your brand, complementing your other efforts.
Personalize the customer experience
As mentioned, you can receive more feedback from loyal customers who regularly buy from you. They'll be more willing to complete surveys and provide more information, which you can then use to personalize the customer experience. In addition to using this information to learn more about your audiences, you can use it to personalize the different touchpoints your customers are likely to encounter.
Based on the data you collect, there are many ways you can go about personalizing your retention marketing efforts. For example, you can send personalized follow-up emails that address users by name. You may also make personalized product or service recommendations based on personal preferences and past orders. You can also send personalized marketing content based on where people are along the buyer's journey, the source they used to find your brand or the specific reason they turned to your brand and offerings. In addition, you can make personalized discounts and other offers. These include discounts on the date of a customer's birthday or another celebratory milestone.
Personalization will help you build stronger, lasting connections with your customers. It enables you to remain relevant with your marketing every time you reach out.
Reward customer loyalty
Your customers want to feel like you truly value them, which is why you should reward them for their loyalty. Specifically, you can do this in the form of a solid loyalty program that entices your customers. Customers can earn points or another type of exclusive currency with each purchase that they can then save up for different rewards. For instance, customers can earn a certain number of points for particular products or services. They may then spend these points on rewards like discounts and freebies, coupon codes, and other rewards.
By offering a loyalty program to your customers, you can drive more purchases and give them a sense of achievement when they reach certain milestones.
Apart from loyalty programs, you can also reward loyalty through referral programs. For example, you might encourage customers to share a personalized link with friends and families, requesting them to sign up for an account on your app or website. Once the link's recipient signs up and makes a purchase, the referrer and the new customer can each earn a reward such as a large discount or free item. This strategy will get many people to continue to spread your brand and turn them into ambassadors who help with customer acquisition while sticking with your brand.
Retain your customers with Storyly Stories
If you're looking for a solution to help retain customers, consider implementing Storyly Stories for your app or website. Storyly enables brands to create and stream full-screen, dynamic and interactive Stories on their apps and websites. They can help deliver content ranging from personalized product recommendations via Shoppable Stories and welcome messages to surveys and quizzes, all of which can help retain customers with fresh and relevant content on a regular basis. Using Storyly Stories, brands can engage with their audience and gain insights into their customers to enhance their marketing efforts.
Brands can create personalized Stories that utilize user properties or labeling to personalize the user journey and deliver relevant content to them. In turn, personalized messaging tailored to the each user can boost app stickiness and ultimately improve retention rates.
Learn more about how Storyly can help brands better retain their customers and stand out from the competitors. Book a call or sign up for free to get started today.
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