The backlash from COVID-19 has had a significant impact on technology firms. Many businesses are experiencing huge drops in user engagement, with some experiencing an 80 per cent decrease in app launches. Marketers are seeking innovative retention marketing tactics to keep people engaged in order to keep their companies afloat.
Customer retention has been critical to the success of any organisation. However, at times like these, companies must have strong retention marketing strategies in place to assist them to retain every consumer they have. Brands that use a retention-first marketing approach experience an average 40% boost in lifetime value and a 20% rise in repeat sales.
(Speaking of marketing, take a look at Marketing Analytics)
Retention marketing is a perplexing type of marketing that appears to be coming up in your favourite online blogs, podcasts, and even talks with other merchant pals. The whispers have begun, but do you truly understand what retention marketing is?
What is Retention Marketing?
Retention marketing is a new type of marketing that becomes increasingly popular in the world of e-commerce. The goal of this marketing approach is to develop engaged clients who will return to your retail outlet to shop again.
It is a transition from focusing just on acquiring a large number of new clients to also concentrating on the productivity of those you already own!
Regular customers are not always less expensive to keep, and they also have a higher overall customer lifetime value (CLV), which is the amount of money a company can anticipate generating from a client over the course of their relationship.
The retention rate of your program is the most popular approach to assess retention marketing performance. We propose keeping track of retention in three stages:
Long-term retention (days 30, 60, and 90): You want to see consumers return week in and week out, month after month.
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Why Should You Begin Retention Marketing?
Many of you may be wondering, "If something is so beneficial, why am I only hearing about that now?" What a great question! Humans have a tendency to make discoveries only when there is a need for them.
Previously, SEM and social networking were inexpensive and efficient methods of driving visitors to our e-commerce platforms. You may sell to someone once and then never talk to them again. Unfortunately, this is no longer the case. These traditional advertisements are more costly and less successful than in the past.
The tendency you must notice is that acquiring a consumer is getting more difficult than ever. You need retention marketing to increase the value of each customer you gain.
Retention marketing effectively increases the ROI of every sponsored acquisition you do. A return shopper is also 9x more easily converted on a purchase than a first-time visitor.
Retention Marketing's Effectiveness
Depending on what you sell, the success of a retention marketing plan will vary. Dishwashers, for example, are unlikely to be purchased as regularly as coffee. As a result, you will not observe the same outcomes in different settings.
Having that said, our clients at Sweet Tooth have experienced an average gain of 40% in satisfaction levels and a 20% rise in repeat purchase rate after implementing retention marketing methods such as loyalty programmes.
Advantages of Retention Marketing
Retention marketing boosts firm profitability in four significant ways:
Higher Conversion Rate: Unsurprisingly, repeat consumers are 73.7 per cent more likely to convert than first-time visitors.
Higher Average Order Value: While recurring purchases account for only 8% of customers, they account for up to 40% of total revenues.
Increased Customer Lifetime Value (CLV): By increasing the frequency and length of time each user spends with your app, you may increase the profitability of each user.
New Acquisition Prospects: With larger lifetime values per user, you can now afford to invest more in new customer acquisition methods and exponentially develop your app.
(Related read, A guide to B2C Marketing)
Customer Retention Marketing Strategies
Let's get started on gaining those devoted consumers. The following are some customer retention methods and marketing tactics that you may use to keep previous and present consumers.
Customer Retention Marketing Strategies
The major mission you're so passionate about? It can be crucial to your consumers as well! Set up an advocacy programme if you're enthusiastic about helping people live healthier lives, reducing pollution, finding loving homes for abandoned pets, or any other cause.
When your consumers can give to a worthy cause, they feel good, and that happiness rubs off on your brand. Your customer advocates are more inclined to prefer your brand over another with whom they have a weaker connection.
2. Programs of Loyalty
When you reward your customers for purchasing with you, they get equity in your company. People are 80 per cent more inclined to shop at shops that provide a loyalty programme, according to a survey conducted by TechnologyAdvice back in 2014.
Consider the punch card in your wallet from your favourite coffee establishment. This helps to keep the shop in your memory, providing you with a gentle nudge to return and get another star. There's also a buzz when you obtain the benefit, resulting in a positive customer experience all around.
3. Coupons and daily deals
People that see daily bargains return to your e-commerce website more consistently than they might otherwise. Customers will be more likely to purchase with you again rather than the competition if they know they will find something at a low price.
It increases urgency, which stimulates impulse purchases since consumers know the bargain is only available for a limited time and it makes them feel good. You may cycle new goods and allow customers to sign up to be notified of new bargains through email or social media.
(Talking about social media, check out the Social Media Marketing)
People enjoy feeling unique, and you may capitalise on this for retention marketing. Establish an exclusive "club" or membership to give your loyal consumers the impression that they have accessibility to something that others do not.
If you're a retailer, you might put on a night of entertainment for customers who spent more than a specific amount that month. Create exclusivity in B2B by providing access to the relevant features that are still in beta to very engaged clients, for example.
5. Marketing via email
Email marketing is still a valuable tool for cultivating client relationships. Despite the fact that consumers receive a flood of emails every day, they still want to hear from their favourite companies. If you utilize digital marketing, email newsletters are a great way to let consumers know when you've released new content on your blog.
Also, consider sending out discounts via email to your consumers. According to an Adestra study, emails with discounts affect shopping decisions more so than review websites and internet adverts.
6. Free Resources
Is there anything you could do to aid your customers with a free tool? Perhaps your technology replicates how a product will appear in their house or assists a consumer in calculating savings while making financial decisions. Consider making your product available in a "freemium" edition.
According to research, customers perceive greater benefits and fewer compromises with free versions. This may help you develop a positive reputation for your company and make clients more inclined to select you over your competition.
Retargeting is the word used to describe internet advertising that is based on a person's browsing history. This digital marketing approach, which is becoming a standard in e-commerce companies, invites the customer back to finish the deal after they may have otherwise forgotten about it. And there's no doubt about it: it works.
According to the Journal of Marketing Research, it can drive 14.6 per cent of browsers back to your website. According to one Stanford study, some shops are now paying up to 50% of their digital advertising budget on retargeting.
8. Excellent service
Customers will return if they receive exceptional service. According to financial industry research, providing high-quality service enhances client retention, which leads to increased customer commitment and loyalty. So, from the moment you make your first transaction, provide the finest customer service experience you can.
There are several methods for accomplishing this, ranging from personalised affirmation emails to memorizing the customer's name whenever they return to the shop. Perhaps you allow no-questions-asked refunds whereas your opponents are pretty savvy.
(Related read, Effective Digital Marketing Processes)
When Should Retention Marketing Campaigns Be Used?
Consider starting several of the following sorts of campaigns as you begin to brainstorm ideas for retention marketing strategy.
Hopefully this blog has been able to shed light on Retention Marketing, its strategies and where it should be used.