Congratulations – you’ve successfully attracted new users. They’re signing up, downloading and making that crucial first purchase with your business. Now you just need to figure out how to keep them coming back. Doing so not only drives additional revenue growth, but substantially increases the overall profitability of your marketing budget.
Retention Marketing Statistics
Here are a few industry statistics you should know up front:
A recent Gartner Group study revealed that a staggering 80% of your business’ future profits will come from 20% of your current customers.
When you’re able to convince a customer that it’s worth buying from you again, it pays off. Returning customers tend to spend 33% more than new customers.
Tried-and-True Retention Marketing Formula
The formula for driving repeat business is simple – deliver the right message to the right person at the right time. When we take it down a level, we start to see hints of underlying complexity. That next-level perspective looks something like this:
1. Map out your customer lifecycle.
2. Identify your customer segments.
3. Identify the touchpoints across that lifecycle.
4. Create a message for each customer, stage and touchpoint combination.
5. Deliver the right message, for the right touchpoint, at the right stage of the customer lifecycle.
It’s important to take a good look at what customer data you have, what your options are for segmenting that data, and how you can integrate the data with certain channels to ensure your messaging is on point. Think about behavioral data, like how active the customer is on your website or when it comes to engaging with your products. Consider how to score the value of customers, as well as the risk that they may not continue to buy from you. All these data points, combined with purchase history and basic geographic data, will give you a lot of options for message testing.
For example, you can set up an email campaign to message users whose subscriptions are about to run out. Remind them that it’s time to renew, and stress why they should renew with your service. This is just one segment of customers defined at one stage of a lifecycle, messaged through a single channel touchpoint.
In another instance, we worked with a major software vendor who asked us to improve their renewal flow. In this case, we opted to take segmentation to their website rather than their email list, directing different customers to different landing pages. On each page, we made the option to renew big, bold and eye-catching in the top-level navigation. It worked – second-time purchasers were segmented from lifelong subscribers, different customers were messaged according to use cases the software solved for, and best-fit renewal options were presented to each visitor.
Putting It All Together
If you’re just starting to develop your retention marketing program, aim for simplicity – start by mapping out the activities that are most likely to drive the most return for your effort. Make sure collecting customer data is a baseline activity, though. You may not use all of it right away, but you’ll have it on hand when you need it, and it can also help you prioritize where you’re likely to drive the most impact.
Let’s say the data indicates that your largest pool of engaged customers is on your website. Start by A/B testing renewal offers for known customers. If you know what products they’ve bought in the past, test cross-sell or upsell messaging.
After you’ve executed these types of spearhead activities that drive fast growth, you can up the sophistication and deliver a personalized, multi-channel program. Think of this as your tail-end set of activities – they’ll require more effort to execute, but represent a large portion of your overall retention revenue opportunity. This kind of retention program delivers tailored messaging to customers across multiple channels.
The Toolkit
Here are a few tools that can help you deliver your retention marketing program:
Website testing against defined segments of visitors:
Multi-channel marketing automation tools:
Customer relationship management (CRM) tools:
We also have a great tool that helps you compare Email Service Providers according to subscriber segmentation and other functionalities.
