Don’t you just hate when your favorite brand lets you down? As modern-day customers, we’ve got used to having long-term relationships with businesses we know and trust. If we’re lucky, these relationships last for years to mutual satisfaction. If not, we post a bad review and say goodbye. Everything that these brands do to keep us around is called retention marketing.
This critical but often overlooked practice is the secret ingredient to the success of many of our long-term relationships. If your customers are leaving, it might be due to poor retention.
Many businesses fail to keep customers, but there’s a solution. Today, we’ll discuss what it is, why it is essential, and how to leverage its many benefits. Here’s our selection of six easy ways to grow your email list using retention marketing, plus a few real-life stats and examples.
What Is Retention Marketing?
Retention marketing is a set of practices companies use to keep an existing customer. Or – should we say – a set of immensely important practices that successful companies use to keep a returning customer. Retention is often a key point of difference between growing and failing companies.
Some of these practices include:
- Welcome emails that tell first-time customers more about your brand.
- Regular newsletters that keep customers in the loop with new offers.
- A loyalty program that rewards repeat customers for their devotion.
- Exclusive offers for long-standing customers with years of referrals.
- Retargeting emails for customers who haven’t been active for a while.
In a broader sense, retention is an everyday effort to make existing customers happy. This goes beyond what a single team or department can do. Instead, a multidepartmental philosophy keeps the company customer-centered and fully committed to customer excellence.
Why Is Retention Marketing Important?
Surely, you know it costs five to 25 times more to acquire a new customer than to retain an old one. Marketers love this stat, even though it’s fairly old. What’s old doesn’t have to be outdated: retention will always require fewer resources and deliver greater benefits. Such as:
Lower Costs Than Acquisition Marketing
Consider everything you’re doing to attract new customers. While having a constant influx of fresh leads and a steady conversion rate is a precursor for growth, all that takes a lot of time, effort, and money. No matter how much you spend, there's a five to 20% chance of converting a new lead.
Compare that with a 60-70% likelihood of keeping an existing customer! It would be misleading to say that retention marketing is a walk in the park. But there’s a big difference – retention takes less time because most of these customers already like you, and you know what they like.
Plus, you already have their email address, which is a considerable time and money saver.
Increase Customer Lifetime Value (CLV)
Most customers want consistency. You’re somebody’s customer too, so think about it. When it comes to spending your hard-earned money, you want a quick, stress-free, and successful customer experience. So when you find a brand that offers all that, you tend to stick to it for a long time.
This is one of the reasons why industry giants like Apple, Nike, and Coca-Cola have been our go-to choices for decades. Throughout the years, they’ve continued to provide a consistent quality of service and a sense of familiarity that we cannot resist. These brands have mastered retention.
As a result, they enjoy repeating profits from customers throughout their lifetime.
Encourage word-of-mouth marketing
As many as 72% of customers will gladly recommend you to others after only one positive experience with your brand. Looking at this from a customer’s point of view, it’s only natural that we would share a word about a brand going that extra mile to make us happy.
Consumer trust has been plummeting for the last couple of years. People have grown weary of branded ads and traditional marketing. They don’t like the thought of big corporations profiting from them. They are informed and picky, but they can be bought with a simple trick – selflessness.
Show them you care about more than just profits; they will show you love.
Boost Your ROI
According to one study, a 5% increase in customer retention can boost your profits by as much as 125%! Most of that is thanks to increased customer lifetime value and word-of-mouth, which immediately impact a company’s bottom line. Retention is a huge ROI booster.
6 Easy Ways To Grow Your Email List Using Retention Marketing
Now that you know why customer retention is crucial for business success, it’s time to discuss how to achieve it. As a rule number one, don’t treat it as an afterthought. Retention must be an integral part of your strategic marketing plan and provide a perfect post-purchase closure to customers.
Except, of course, retention is not where the customer journey ends. On the contrary, it is a long-lasting ride that should ensure consistent quality in a new and exciting way. Here are six tested and tried practices that can help you with this, but it’s up to you to personalize them to your customers’ liking.
Ultimately, it’s all about what they like and showing that you care.
Harness The Power Of Community Through Social Media
The first thing that comes to mind when we say social media is – connection. Or at least that’s what social media was made for. In marketing, this incredible connectivity potential gives businesses a unique opportunity to connect with their customers and build a loyal community.
Social media marketing is a powerhouse of possibilities. Retention is just one part of this, but it’s the part that most benefits from social media’s relationship-building potential. There are numerous ways to create an authentic connection with customers on social, and they are all easy and fun:
- Post engaging content that’s informative or just plain fun.
- Interact with your customers’ posts: like, comment, and share.
- Engage customers (and learn about them) by asking questions.
- Leverage social media contests, giveaways, polls, and events.
- Invite customers to promote your brand with original content.
- Listen to customer feedback, critiques, and honest opinions.
You can do a lot with just one of these social media techniques. Strategically using them all will help you build your reputation. It’s a chance to show your true colors in an informal setting, flaunt your wit and creativity, and showcase your attentiveness and genuine care for your customers.
Keep in mind that genuine care cannot be faked. You must be there with them, and for them 24/7, requiring you to employ social media support software. In addition to omnichannel and automation, you’ll need a reliable tool for managing social media tickets.
Keep Your Customers In The Know
Content reigns supreme at every stage of the customer journey. When it comes to retention, you can use it to reengage your customers, introduce them to other aspects of your brand, and have them fall in love with you all the more. Add it to the newsletter, post it on your blog, and share it on social.
There’s only one important rule – you must focus on information rather than promotion.
Earlier, we mentioned the ongoing customer trust crisis. Well, promotional content is the easiest way to feed your customer’s frustration with branded marketing. If they only notice that you’re selling them something they don’t want or need, they won’t like it, especially in retention.
There’s no need to spam your repeat customers with ads. While this can be an effective customer acquisition practice, being openly promotional is pretty much the worst thing you can do when you’re trying to retain a customer. It will come off as needy, and nobody wants that in a relationship.
Have your content show that you’re customer-obsessed, not obsessed with selling.
How can you do that? By providing real value. Create content around what matters to a repeating customer-what, how, and when – what’s new with your business, how it can benefit them, and when it will be up for grabs. Or, just share a funny meme to remind them you’re there.
Offer Enticing Loyalty Programs
In addition to helping you build relationships and increase customer lifetime value, loyalty programs are a fantastic way to differentiate yourself from the competition. Over 90% of companies already have some kind of loyalty program, but don’t fret. Just make it creative and clever.
If you don’t know how loyalty programs work, here’s a quick brief. After a customer buys something from you, you make them an offer they can’t refuse. If they truly can’t refuse it, they subscribe by leaving their email address, phone number, etc. From that point on, they are your loyal customers.
This likely means they will return for more, but this depends on the program.
Some of the most popular types of loyalty programs are:
- Cashback programs
- Community programs
- Free perks programs
- Mission-based programs
- Tier-based programs
- Spend-based programs
- Points-based programs
- Paid programs
- Refer-a-friend program
The best type of loyalty program is the one that’s right for your customers. Here’s an example. If you’re running a White Lotus type of hotel that hosts wealthy guests, a tier-based program will help you establish a sense of exclusivity. You can offer guests an elite status after their fifth stay at the hotel.
Compare that to points-based programs, which are especially popular among frequent buyers of fast and spendable goods, such as food and beverage. Take Starbucks, for instance. You earn one point per coffee order and can collect or redeem points for a free cookie or merchandise.
Have Limited-Time Promotions To Take Advantage Of
While loyalty programs propel gamification or create a sense of exclusivity, limited-time offers rely on our deeply human fear of missing out. Scarcity has long been a crucial decision factor – just think about how many times you’ve ordered an item just because the site said it was the last one.
In a nutshell, a limited-time promotion is any offer available only for a certain amount of time. Seasonal sales are the most obvious example of this. And they show just how effective this strategy is in practice. Everyone wants a slice of the Black Friday offer, whether they need it or not.
Time your limited-time promotions correctly, and you’re basically scheduling a return purchase.
Depending on their placement, these promotions can also be more or less successful. Traditionally, you’ll inform old-time customers about the upcoming sale or special one-day offer via email or SMS. But you can also advertise on social and add a countdown timer to your landing page.
Most limited-time promotions are not loyalty-exclusive because they effectively attract new buyers on top of repeat customers. But if that fits your strategy, you can create a retention marketing combo and schedule a limited promotion specifically for your loyalty club members.
Take Feedback Seriously
Hearing customer complaints is crucial for success. Invite it, welcome it, cherish it.
The benefit of embracing feedback is twofold. One, customers will like you more for listening to them, and two, you’ll learn how to get better. Constructive criticism is explicit advice that’s easy to incorporate into daily practice. And did we mention – it’s also completely free?
Learning to handle customer feedback will take time and chip away at your ego, but it will be more than worthwhile. Through quality customer service, well-trained representatives, and a customer-centric PR strategy, you’ll be able to collect valuable customer data and impress them, too.
Successful companies do this by taking a proactive approach toward customer feedback. They don’t wait for customers to share their feedback publicly on social. Instead, they ask for feedback immediately after the purchase. On-site service ratings and email surveys are very effective for this.
Have you ever bought something from Ikea’s site? Then you’ve likely filled out their email questionnaire post-purchase. It’s pretty elaborate, but it’s not mandatory. It casually allows the customer to express their frustration or voice their opinion. It’s unpretentiously asking – how did we do?
Of course, asking for feedback is the easy part. To turn failure in your favor and show that you really care, you must use this feedback to improve. And when you do, you can also brag about it – publish it as a success story on your blog and thank the customer for their advice.
Give Exclusive Offers To Long-Term Customers
According to Kelton Global, 82% of consumers would increase how often they shopped with a brand if it offered exclusive offers. Why? Well, there’s that word, for starters – exclusive. It’s the fear of missing out combined with our longing for prestige wrapped up in a shiny new custom bow.
For the purposes of retention marketing, an exclusive offer can be any type of promotion created with your repeat customers in mind. This can be a limited-time promotion or a special perk for top-tier loyalty club members. In a word, it is a token of appreciation for your returning costumes.
The thing that makes exclusive offers truly exclusive is – personalization.
Previously, brands could provide custom-tailored perks only for customers with long purchase histories. This is no longer the case. Today we have something called intent-based marketing, which allows us to tailor our promotions, offers, and special deals to each customer, new or old.
Personalization is a huge factor that influences purchasing decisions for many customers. Brands that pay attention to their customer’s behavior will have an easier time creating retargeting ads and personalized product suggestions. They keep track of all purchases but also monitor likes and clicks.
Exclusive offers are widely effective, both as a way to reward loyalty and as a way to incentivize future purchases. They make a perfect “thank you” gift for old-time brand ambassadors, but they also give new repeating customers something to look forward to and a reason to stick around.
If you’re serious about your business, you cannot afford to overlook retention marketing. Failing to keep your existing customers wastes resources you’ve spent to acquire them. Poor retention efforts, or lack thereof, are also a missed opportunity to secure a customer’s lifetime value.
Reversely, strategic and creative retention can help you grow your business fast.
These six tested and tried retention marketing strategies will not only grow your email list. They will help you improve your social media following, write better content, give your customers a reason to return, boost your sales, improve your services, and build a brand that customers love.