Retention Marketing Demystified
The buzzword that was thrown around in the marketing world a while back is finally getting it rightful attention in today’s marketing strategy of successful businesses. However you want to call it, from retention marketing to lifecycle marketing, re-engagement marketing to loyalty marketing, it is the key strategy that a business needs to have in place that focuses on retaining existing customers that converted from leads.
As CMOs put more emphasis on maximizing the lifetime value of customers and over 64% of marketers spending over $20 per qualified lead, it is becoming increasingly important to ensure that you are doing your retention marketing correct.
“It’s 6-7 times more expensive to acquire a new customer than it is to keep a current one.”
– White House Office of Consumer Affairs
What is Retention Marketing?
Retention marketing is basically keeping your existing customers happy, engaged and buying from you. From your online efforts (SEO, SEM, paid search, etc..) and offline efforts (roadshows, TV/radio/paper ads, cold calls, etc), you have already spent some time and money into attracting Mr. Customer to your store. You then spend more on demos and samples that leads in to his first purchase. Now for all the resources put into this purchase thus far, it would be a waste to have him leave and never come back. The obvious next step would be to ensure that the momentum is there and to have him adopt your product (or even better, adopt your brand).
Keys To Customer Retention
Know your customers
Unlike a local cafe serving a neighbourhood worth of customers, many businesses serve global customers and at that scale, knowing customers individually may be a challenge, but still, with modern technology, serving relevant and engaging 1-to-1 content is very possible.
On top of that, knowledge of customers’ buying habits and patterns are just as important. Know the purchase frequencies for the different buyer groups, the engagement channels with your brands, etc.. so that when a customer is signalling lost of interest and churning, you know it is time to re-engage them (preferably through their preferred channel of course).
Lastly, provide an easy access feedback channel for so that customer can let you know what you and doing right, and what can be improved.
“80% of companies surveyed said that they offer superior customer service, but only 8% of their customers agreed with them.”
– Bain and Co.
Keep customers informed and updated
Having great product and abundance of knowledge would come to nought if not communicated to the customers. Know when is the best time to post on your social media channels and also the best time to send that newsletter. Also, do keep a good balance between sales messages (new products launch, revised pricing, promotions, etc) and value added messages (company news, educational articles, best practices, etc) to keep the engagement and sales high.
“59% of consumers say they feel irritated when they receive irrelevant marketing communications. 37% say they’ll ignore future comms from those same ecommerce sites.”
– Emarsys and OnePoll
Introduce Loyalty Programs / Gamification to your model
Whether to get that 10 reward points or the brag-worthy new achievement, loyalty programs and application of gamification strategies increases overall engagement with the brand and is an easy way to get users to complete a particular marketing goal. Want increased sales on a new beverage? Just give 10% more reward points for a limited time, and/or unlock the “Brave New World” achievement.
“It’s not always about competing to win, but sharing how you won.”
– Daniel Debow, Salesforce SVP, Work.com & Rypple Founder
Stellar Customer Service
Although very much a separate business unit within the organization, the customer service department’s efforts can have a direct impact on your retention marketing plans. Whether or not your customers stay or leave you for your competitor is largely dependent on the post purchase experience and they are likely to be playing a key role in building and delivering that stellar experience.
“48% of customers who had a negative experience told 10 or more others.”
– Harvard Business Review
Take a good, hard look at your customer database and their transactions. Run them through an analysis such as Engagement RFM, or eRFM, to know your customer profiling. From there, draw up a plan on when/what/how to communicate to your different customers. Bring in all the different parties whom a customer will touch base with throughout their lifetime with your brand to ensure that everyone within the company is on the same page as to how customers’ journey from lead to brand advocate should be presented and how to establish and maintain that engagement and retention.