Introduction – What is Retention Marketing?
Retention marketing is also known as customer retention. It’s a strategy that helps businesses to keep their current customers and increase the lifetime profitability (also known as lifetime value, or LTV) of each customer. Put simply, it’s the way of thinking about your business’s marketing scheme, how it works, and how it can work better for your customers.
Why is Retention Marketing Important for Your Business
Retention marketing is a relatively new concept that is gaining popularity in the business sector, specifically with the meteoric rise of ecommerce business due to the various economic shutdowns, forcing customers to shop online. It is an approach to customer retention that focuses on the customer experience, as opposed to acquisition. It aims to create a positive and memorable experience for customers so they will want to stay loyal and continue doing business with you.
The goal of retention marketing is not just to keep your current customers but also make them happy so they will want to come back again and again. With retention marketing, you are focusing your efforts on making sure that your customers have a good time each time they interact with your company, rather than just trying to get them in the door for the first time.
Retention marketing is important because it’s a lot cheaper to retain a customer than acquire them. Acquiring a new customer is typically 5x to 25x more expensive than the cost to retain one.
If you’ve established a solid foundation of customers, you should aim to split your time 70% on Acquisition and 30% on Retention. If that sounds like you, read on to learn ways to begin working on marketing retention tactics.
What are the Best Ways to Improve Customer Retention and Loyalty
Retaining customers is one of the most important aspects of a business. Customer retention strategies are a great way to increase customer loyalty and help businesses grow. In this article, we will discuss some strategies that you can use to retain your customers.
The first strategy is to ensure that your customer service is on point and that you are providing the best possible experience for your customers. This starts with having an efficient customer service team that knows how to solve any problem and provide fast responses in order to satisfy the needs of your customers. You can leverage site chat if you have a support team or email support at minimum. You should also have a comprehensive FAQ page with all the answers for the most common questions so that customers do not need to wait for a response from a member of staff.
If you have a live chat you can turn questions into sales or resolved complaints into a smooth resolution and preserving that experience. At FORGE, we love Hubspot’s built in chat feature but you can also leverage plugins for Facebook Messenger or Customer Specific Support like Tawk.To which even offers the ability to hire remote chat staff to support you as you grow.
If you have the margin to do so, consider adding free gifts at checkout or within your packaging to encourage the “law of reciprocity”. When people get something from you without asking or expecting it, they will be delighted and often times want to give back. This can encourage referrals or return business.
Another simple way to delight your customers is handwritten thank you notes. You’d be surprised; a little goes a long way.
Customer Loyalty Program
Part of effective marketing retention strategies is consumer psychology. You want to help each customer achieve what they set out to when they first opted in to try your product or service. One way to help
This is the #1 Retention Marketing tactic. Specifically, we’re talking about Email Marketing Automation.
Email marketing is one of the most effective marketing tools for companies. However, it can be time-consuming for marketers to manually send personalized emails to their customers. This is where email automation comes in.
It allows marketers to automate and schedule the sending of personalized emails so they don’t have to worry about sending a message at the right time. It also saves them time by automating repetitive tasks like creating a welcome email and following up with people who haven’t opened an email in a while.
Email automation is one of the best ways for marketers to save time, money, and energy when trying to create customer engagement campaigns.
If you’re an ecommerce brand looking to increase your retention and improve your conversions, you will be hardpressed to find a better all-in-one solution than Klaviyo, our preferred Email Marketing and retention platform.
Klaviyo is a comprehensive retention marketing tool that provides a number of templates for high impact email automations, or as they call them, Flows.
Here are just a few of the Flows we recommend at Forge to get you started on your retention strategy:
Welcome Series: Get your subscribers to close the first deal by teaching them about your brand and services while increasing trust and building the foundations of a long-lasting relationship.
Post-Purchase: Will increase customers retention and lifetime value turning them into loyal buyers.
Re-engagement: Save money and stop sending emails to people who don’t want it. Using the re-engagement tactic will improve your email deliverability and make sure that you keep your list clean.
Abandoned Cart: 73% of shopping carts are abandoned. Recover them at the right time, while they are still considering your product.
Browse Abandonment: They can help remind your subscribers of their early interest and potentially bring them back to your online store, softening the sting of your initial disappointment that they didn’t buy on their first visit.
Text marketing is a type of marketing that uses text messages to promote and sell products or services. It is also called SMS marketing, short message service (SMS), mobile marketing, or by the abbreviation “texting.” Text messages are delivered to a cell phone via an SMS message.
Klaviyo doubles as a SMS marketing tool allowing you to reach your customers where they are constantly looking: their phones. You can also send MMS messages, or text promotions with images included. Check out Klaviyo for SMS here.
Loyalty Programs & Referrals
If you’ve been able to retain a loyal customer for a long time, this will feed acquisition naturally through referrals. Make sure to encourage referrals from your loyal customers by rewarding them for referrals.
Measure your Retention Strategy
Your Repeat Customer Rate is the number 1 thing to monitor to see if your retention strategies are being effective. Shopify will calculate this for you in your dashboard, but if you’re using Woocommerce or another CMS, use this quick equation to establish your Customer Retention Rate:
# of Customers Who Purchased More than 1x
# of Unique Customers
Next, you’ll want to manage your AOV, or average order value. Calculate it thusly:
# of Orders Your Store Processed
Lastly, calculate your Customer Value:
Purchase Frequency x Average Order Value = Customer Value
If you’re in need of assistance setting up a high converting retention marketing strategy, please feel free to reach out. Forge Digital Marketing is your go-to partner to establish your ecommerce retention strategies and grow bigger than you ever thought possible!