9 Retention Marketing strategies to amp up business growth
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Creating engagements that are value-adding and non-intrusive is something that seals the deal for all businesses, small or large. It is the customers that make or break a business. As a business, you are nothing without your customers. Whether you create products or provide services, you cannot grow unless you have a customer base to back you up. If a business is new to the market, the only way it can scale up is by providing an excellent customer experience and building customer loyalty.
This is a priceless component that will help you rise above market trends or cut-throat competition, irrespective of the industry you’re a part of. Let’s suppose that you’re implementing the best lead generation tactics to acquire new customers and marketing your product in the best way possible. But what about the customers that you have already served? In this age of excessive competition, it is not just important to have the best lead generation strategies in place but is crucial to also engage with your past customers that have had an experience with your brand.
What is retention marketing?
Retention marketing primarily focuses on retaining current customers as well as targeting past inactive customers in an attempt to increase the customer lifetime value, i.e. drive repeat purchases from your existing customers. This is an intelligent marketing strategy to keep in handy as it is cost-effective and easier to implement in comparison to acquiring new customers.
Why should you focus on retention marketing?
To answer this question, here are some facts that we’d like to highlight:
- Nearly 82 percent of companies consider customer retention to be cheaper than customer acquisition.
- If a company launches a new product or service, the existing customers are 50 percent more likely to make a purchase than new customers.
- If you increase your customer retention efforts by 5 percent, you can witness a 25-95 percent surge in your profits.
Considering that nearly 65 percent of a company’s business is driven by its existing customers, there is absolutely no reason to ignore that aspect. Here are two reasons why businesses should focus on repeat customers:
- Increased loyalty: The customers who have already availed your service know what your business does. It is their pleasant experience with you that has created trust and commitment on their part. Every repeat purchase by a customer will not only help you gain monetary benefits but will also help you achieve a higher customer lifetime value.
- Cheaper than acquiring new customers: You will be shocked to know that acquiring a new customer is 7x more expensive than retaining an old one. When you set a strategy to acquire new customers, there is a 15 percent chance of them converting. On the other hand, if you approach your previous customers, then the chances of landing conversions are around 70 percent. In sharp contrast to retaining more customers, bringing in new customers can be five times more costly. Email and SMS marketing and acquisition marketing tactics can prove to be quite expensive for you. So if your goal is to cut costs, then this is a good angle to take a glance at.
Learn about retention marketing by asking yourself these critical questions.
Top customer retention metrics to look out for to ace your retention marketing strategies
To ensure that your retention marketing strategies aren’t going to waste, these three metrics are absolutely essential for you to track:
1) Customer churn rate
You must know which customers have stopped availing your services or using your products at a given point in time. To calculate the customer churn rate, find the difference between the number of customers at the start and end of the year, and divide the difference by the customer at the beginning of the year. The value you have at the end of this is the number of customers who have stopped buying your products or services. The lesser the churn rate, the better it is. If you find the rate to be alarmingly high, then you need to deploy strategies to reduce customer churn.
2) Revenue churn rate
Revenue churn rate is another important metric to understand and analyze the natural business cycle with respect to acquiring and losing customers. To calculate the revenue churn rate, find the difference between the Monthly Recurring Revenue at the beginning and end of the month, and then divide that figure by the Monthly Recurring Revenue at the beginning of the month. What you have is the amount of revenue you’re losing.
3) Repeat purchases
Getting repeat purchases is one of the easiest ways to generate revenue, which is why keeping a check on your repeat purchases is important. You can calculate repeat purchases by dividing your returning customers by the total customers. The calculated ratio will give you a fair idea of customer loyalty.
Tips to improve your retention marketing strategies
Now that you are familiar with the meaning, importance, and metrics related to retention marketing, it is now time for some quick tips to enhance your retention marketing strategies.
#1: Understand and analyse customer preferences
To create an effective customer retention strategy, you must know your users.
Fun fact: loyal customers spend 67 percent more on you than newly acquired ones. It is absolutely crucial to understand the preferences and struggles of your customers so that you can use those in your retention marketing strategy. You can do the same by studying buyer personas or user journey maps. Buying personas will give you a fair idea of who your target customers are, what are their buying habits, what challenges they face, and how they make purchase decisions. A user journey map will equip you with insights into a customer’s relationship with a particular brand over a period of time. You can make use of these insights to create strategies that can help influence buyer behavior.
#2: Ease the process of sharing feedback
Retaining customers is largely backed by the kind of experience your past customer has had with your brand. What is it that your customers liked? What improvements would they like to see? Overall, are they happy? You cannot merely guess whether your customers have had a pleasant or unpleasant experience. You should make it a point to ask for their feedback to know what’s working in your favour and also analyse gaps arising in your product or service. You can use Emitrr’s review management campaigns and send out survey forms to your customers, making it easier for them to share feedback. Not only that but you can also track the review metrics across various platforms under one umbrella.
#3: Use data to create personalised customer experiences
Did you know that around 89 percent of companies find customer experience to be an important factor to retain customers and gain their loyalty? To be able to retain your customers, it is crucial that you personalise communications and connect with them on a personal level. For the same, you can simply segment your customers and send them personalised content. A great way to connect with your customers is SMS Marketing. For instance, you can use Emitrr’s text messaging capability to send automated text messages and choose from a variety of templates to customise your messages.
#4: Conceptualise loyalty programs for your customers
Who doesn’t like discounts, exclusive access, or special offers? Let’s say you offer cleaning services. Now if you see any past customer asking for service again, you can simply offer a discount to that customer, which is like rewarding that customer for being loyal to your brand. Such loyalty programs can help you big time, driving your retention rate.
#5: Build a community of loyal customers
Remember that an engaged customer is a loyal customer. Building a community of all your loyal customers is also an excellent way to retain them. Social media can prove to be an ideal platform to build such a community of loyal customers.
#7: Provide exceptional customer service
This goes without saying. To provide excellent customer service, you must make sure that your customers don’t face trouble expressing their concerns with you through the preferred channels. Ease of communication is the key to keeping your customers engaged and ensuring that they don’t switch to an alternate service provider.
#8: Engage in upselling and cross-selling
While the probability of selling to a new customer lies between 5-20 percent, the same for an existing customer is 60-70 percent. This means that you need to amp up your marketing strategies to keep your customers hooked. Upselling and cross-selling are two intelligent ways to engage your customers and do business with them. With upselling, you can offer a better version of your product or service saying that it would best suit your customer’s needs and preferences. With cross-selling, you can offer something that compliments your customer’s existing purchase.
#9: Educate your customers
Customers prefer brands that are transparent about what they do. Educate your customers about what you do, how your products and services are the solutions to their needs, and how they can be tailored to align with their preferences. Customers find such brands more trustworthy. A great way to keep your customers notified about your products is by posting informational content.
If your goal is to expand your customer base, cut costs, and maximize profits; then having the right retention marketing strategies at your disposal is key. Understand what your customers are saying after engaging with your brand, look for areas of improvement, and make sure to get better at every step of your journey. Are you looking for assistance with respect to retaining customers? Book a demo and transform your patient engagement journey.
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