Customer Retention is all the actions you take as an organization to retain a customer. Retention is the foundation of growth because the more customers you keep, the less you need to do to acquire new customers. Yet, many marketers still spend higher budgets on acquisition than they do on customer retention.
Acquisition Channels vs. Retention Channels
Your acquisition channels are the channels you use to acquire new customers. These are often ads or the social media channels that are used. Therefore, these are often the paid-media channels. In contrast, the retention channels are grafted to keep a customer after the acquisition has taken place. In most cases, this takes place via owned-media channels.
After all, why would you spend money and use a paid channel if you already have identified your customer? We often see this go wrong with remarketing. How many times has it happened that you are a customer and have purchased something from a web store and you still see an ad to persuade you to buy?
In a previous article, we discussed why the deployment and use of your retention channels are also the source of building a data foundation based on your own data.
Building a successful retention strategy
These are two fundamental effects of implementing a successful customer retention strategy:
- Increase Life Time Value (LTV) of the customer. As you increase the recency, the frequency, and amount that each customer spends with you, you are instantly affecting each customer's LTV and profitability.
- Increase the Average Order Value (AOV), the average revenue generated in a single transaction.
Did you know that it can cost five times more to attract a new customer than it does to retain an existing one? Increasing customer retention rates by 5% increases profits by 25% to 95%, according to a Bain & Company study.
But successful retention marketing involves building two-way and engaging relationships with your customers, and for that, you need tools that facilitate customer engagement. The Notificare platform has been successful in being that sidekick many marketers call for to retain their customers and build that loyal relationship. By default, providing the top 3 retention channels; Email, Web and App Push, and SMS.
The Six Ingredients for a Successful Retention Strategy
Onboarding is an essential step for mobile or web apps also in the e-commerce space. Explaining to your customers what they can expect and taking them by hand is crucial and prevents driving them away. Doing it right can genuinely engage this new customer. Read more about onboarding.
If your customer doesn't hear from you, you will be forgotten in no time. User Activity is defined as how regularly a user uses your app, website, or interacts with your messaging campaigns. The more active the user, the more your user becomes engaged, and the longer this user will continue to use your services. Read more about Keeping your Users Active.
We all know that data is important, and using user's behavior data in apps or websites has become an essential part of your marketing insights. And with event-driven marketing enabled by actionable analytics, this data can easily be transformed into real-time decisions, offering relevant and engaging messages based on your customers' interactions with your products or services. Read more about How to use data and Automate your Marketing.
As seen in Customer Engagement Trends in 2021, personalization is at the top of every CRM manager's and marketer's list right now. Traditional one size fits all broadcasts will drive your audience away and will underperform when compared with campaigns that take user preferences, behavior, and context into account. Read more about Personalized Experiences.
Reward Loyal Customers
Everyone likes to receive a gift. Loyal customers, with whom you have a good relationship, also like it when you surprise them. An extensive loyalty program can help you with this. Using rewards to create moments of delight fosters loyalty and ensures that your customer stays engaged longer.
And last but not least, of course, it may not always be possible to reach a certain segment for a long time. Your customers become dormant and will eventually move away from you. Don't give up. By precisely detecting these dormant users, you are ready to take this opportunity and setup win-back campaigns. With the right incentives you can always win back your customer's heart.
Need help with your Customer Retention Strategy?
Do you want to increase retention and reduce churn? If you want to exchange thoughts on this or need a hand setting up your retention channels in the Notificare platform, please contact our Professional Services.