If you yearn for your customers to form a deep bond with your brand, you need to give them more than good products and services. Your customers need to see that you truly care about helping them.
In fact, that’s key to retention marketing.
And one of the means of creating this support is by sharing evergreen content that educates your customers to help them grow. Canva’s Design School implements an amazing marketing campaign to boost retention.
The school offers resources, step-by-step videos, and guides that help customers use Canva to the fullest as well as enhance their graphic designing skills.
Needless to say, Canva is not only delighting its customers but through its marketing campaigns that boost retention, Canva is building a loyal clientele community.
Would you desire to walk in Canva’s footsteps?
Well, that’s a rhetorical question; Yes, of course, you do!
Let’s get started then with how you could plan a marketing campaign to boost retention.
Table of Contents
Ideally, retention marketing is a strategy that involves a series of techniques that transform visitors into repeat customers.
A successful marketing campaign to boost retention is based on the detailed history of each and every customer. This includes all the times that your customers interacted with your brand.
To give you an example, the data points could include store visits, outreach engagement, and past purchases. Once you get hold of these valuable data, you can effectively create behavioral segments, that will further help you with framing a retention marketing strategy.
But you must understand that a personalized retention marketing campaign is the name of the game, to bring your customers back for repeat purchase. Following are the success metrics you’ve got to track:
- Purchase frequency
- Average order volume per purchase
- Customer retention rate
While I’ve defined what retention marketing is, you need to also understand why it’s ten times more important than acquisition marketing.
You’d be surprised, but let me enlighten you. The recent statistic by Gartner Group relays that 80% of a company’s revenue will come from just 20% of its existing customers.
That said, you need to understand how retention and acquisition marketing would impact your business.
Statistics That Will Blow Your Mind
- It can cost five times more to acquire a new customer than retain an existing customer (Source: Invesp)
- You can increase your profits from 25-95% simply by increasing customer retention rate by 5% (Source: Bain & Company)
- The success rate of selling to a new customer is only 5-20% while that of selling to an existing customer is 60-70% (Source: Invesp)
Components of Customer Retention Strategy
When we talk of customer retention, we are focusing on nurturing customer rapport so that they continue to use your products and services.
In principle, customer retention strategies are directed towards:
- Impeccable customer service
- Exceptional quality in terms of products and services
- Creating a customer-centric and customer-friendly environment
- Delegating app-based loyalty programs
Components of Customer Acquisition Strategy
Unlike customer retention, the primary goal of customer acquisition is to ace new customers. Translation: This process is dominantly focused on marketing – communicating and attracting new customers via targeted messages.
And, ideally, the common components of acquisition marketing involve:
- Discovering potential customers
- Figuring and implementing a marketing campaign
- Monitoring and following up potential sales
- Measuring success metrics
When all is said and done, the aforementioned statistics and strategies clearly reveal how important customer retention is for your business. So, how does all this reflect in your business? Let me get you in the know.
Looking for a lower burn, some businesses break the mold, foreseeing this to translate into real customer growth. However, what they overlook is the aspect of the business health that lies in customer retention.
True, getting a customer is essential, but that's only the first step. However, customer turnover can be a silent killer. That’s why investing in marketing campaigns that boost retention matters.
Sailthru’s report revealed a global study of 300 CEOs, media, and retail executives that those retailers and publishers who increased their investment in retention marketing in the last 1-3 years witnessed a near 200% higher chance of skyrocketing their market share in the past year over those who were spending more on customer acquisition.
While there may be many reasons as to why focusing on customer retention improves your long-term revenue, it basically grills down to the following three phenomena:
- Customer retention decreases churn
- As you build loyal customers, they’d spend more per transaction
- Your loyal consumer base would have a greater customer lifetime value
Besides, increasing revenue, retention marketing helps increase business profitability. This is because a retention-focused strategy would help you keep your fixed costs under control. Your customer acquisition costs would decline as your loyal customers are better at word-of-mouth promotion. Most importantly, it’s easier to upsell to loyal customers than newly acquired ones.
Successful marketing campaigns that boost retention depend on understanding two important things. One is why your customers are leaving and the other is where your customers are leaving.
Mark Customer Expectations
You need to give your customers something to look forward to your business.
Customer service, these days, isn’t limited to attending to complaints and queries, it’s about meeting customer expectations. You might argue that it’s hard to satisfy someone you barely know, but with a CDP and a CRM in place, you’ll do just fine.
For you see, when you meet customer expectations, you’re basically empowering them. The importance of this exercise is revealed in Harvard Business Review’s statement “customers want to be empowered, not controlled. You have to act with empathy”.
As you try to meet customer expectations, keep your promises scalable. For instance, if you give your customer your word to deliver a product half an hour after the order, execute it. Better yet, strive to ship it in 25 minutes. But don’t ever go below customer expectations.
Map Customer Trust
Your business can die if the correspondences between you and your customers are not built on trust. Seeing how important trust is, you have to consciously promote trust in all customer interactions.
As you try to build trust, use their behavioral data to deliver momentous value in your offerings. This way, your customers would continually nod and accept your recommendations.
A report by EY and Forbes Insights suggests that “marketers should use data to build trust with customers”.
Measure Customer Lifetime Value
Your customers are your biggest assets. And the customer lifetime value is a key performance indicator that shows you the worth of your customers over a timeframe.
You’d agree with me that it takes a lot of resources to get a customer. As a retailer, you must know the value each of your customers is bringing to your business. This is what we call the customer's equity.
There will always be some customers who add more value than others, and some will always come around to buy. These repeated purchasers are your VIP customers. In fact, these are the same group of customers who would refer others to your business via word-of-mouth.
As you determine the value you place on your customers, you’d be able to predict revenue, and figure out your budget for developing engaging content at all times.
Learn how to measure customer lifetime value, here.
I’ll walk you through two of the best retention marketing strategies to follow with live examples.
Advocacy marketing is all about getting your existing customers to propagate your product and services among their network. This depends on capitalizing on the positive experience that not only acquires new customers but also augments retention.
The RealReal does an excellent job with advocacy marketing.
The group formalized advocacy-based retention marketing through its “Refer a Friend” offer. Under this program, customers are encouraged to make repeat purchases, who choose to refer in various ways.
If you’d look closely into this program, it has two facets to it. One is consistency and the other is the monetary incentive.
When customers endorse The RealReal openly, they are most likely to leverage their services again. This phenomenon is what we call the consistency bias.
Alternatively, this retention marketing program offers a direct monetary incentive that customers can use on the platform again in the likes of a Store Credit.
In reactivation-based retention marketing, you try to deliver a series of messages to past customers who aren’t engaging with your service or products. You might wonder if this can actually work. I’ll show you how Instacart made it work for them.
First, they start with an e-mail, nudging their customers to download their app. Instacart incentivizes its message by offering free delivery. It also creates a sense of urgency to accelerate the customer’s action.
When customers don’t budge to the first e-mail, they are quick to send a follow-up e-mail by stating other benefits of Instacart besides the initial free delivery offer.
This exercise goes on for as long as the customer re-engages with the brand. And Instacart aced it in its ninth e-mail, wherein it offers a monetary incentive. Look closely, and you’d see Instacart use an exact $ amount as per the best practices.
Try implementing the tactics of The RealReal and Instacart. That’s the only way forward to do retention marketing right. But remember that you need a centralized tool to carry out retention marketing. To begin with, you can leverage Ingage – an omnichannel AI-driven CRM platform.
As your retention marketing grows sturdy, you’ll witness:
- Increase in customer lifetime value (When customers increase their frequency of purchase, it automatically impacts their profitability and lifetime value)
- Enable new sales channels (As you increase CLTV, you’d have more liquidity to spare on customer acquisition)
- Increase average order value (A study by Adobe shows that your repeat customers, typically 8% of your customer base, make up 40% of sales)