Customer retention marketing is concerned with recurring purchases from previous consumers. It guarantees that your consumers are correctly informed about your brand and products, are happy with their purchases and customer experience, and are motivated to return to your brand for new updates.
Benefits of customer retention marketing
The following are a few benefits of customer retention marketing:
- Compared to attracting new consumers, it is inexpensive
You’ve probably heard that getting a new client costs five times as much as maintaining an old one. Market research has validated this core premise over and again. However, specific statistics vary by industry. Your sales staff might spend months following a promising lead only to fail when the lead picks a worthy competition. Existing client connections also need some work. As you already have them on the hook, it is less expensive than beginning from zero.
- Increase recommendations and consumer loyalty
Loyal customers are more likely to function as references, spread favorable word of mouth, and contribute to new acquisitions. We know the value of a personal recommendation; therefore, use it to grow your business. Use that reference when you acquire it! Customers are significantly more inclined to believe a testimonial than a sales pitch, so supplement your marketing with several first-hand testimonies of how excellent your product and service are.
- The brand of your business will stick out among the crowd
Put on your consumer hat and examine how many brands you encounter that appears to grow your business. You probably have one or two ideas. Most businesses prioritize acquisition, making the retention-focused among us stand out even more. People are exposed to around 10,000 marketing messages daily, yet only a tiny percentage gets engaged. Those that have an emotional connection with them are the ones who win their continued participation.
Forget about a distinct selling offer; the top brands have a distinct retention proposition.
- More customer feedback
While posting positive client experiences online is uncommon, negative customer comments may be abundant. Many people try to dodge these evaluations or refuse to acknowledge them because they are concerned about the consequences for their brand. It might make consumers feel unimportant and lower their confidence level in the business. When you take the time to reply to the honest and constructive comments that your devoted consumers leave, you deepen the bond between the brand and the customer.
Adjusting these concerns can help you fulfill expectations and improve your client experience.
- Increases the monetary worth of each sale
The sale is still ongoing even when consumer purchases in retention marketing. A standard error businesses make is failing to follow up with consumers to upsell or cross-sell additional items and services. These follow-up actions can boost client retention and the value of the current sale. For example, if a consumer buys a subscription from your company, why not contact them in a month to ask if they’d want to upgrade their membership to the next level?
If the buyer purchased your goods, ask if they want to add a related product to complete their transaction.
Tips on retention marketing
The following are a few tips on retention marketing:
- Establish expectations as soon as you can
Customers won’t feel let down immediately if you are open and honest about what your good or service can and cannot do in retention marketing. Just be clear about your product or service’s value proposition, advantages, and restrictions. This can be accomplished during the onboarding procedure or through a sales pitch. Sharing pertinent case studies with prospects can also aid in controlling expectations and preventing future misunderstandings.
- Recognize the buying process
It’s important to comprehend the buyer’s journey to spot probable points at which clients can stop using your product or service. Keep track of all process steps, including client interactions, queries, and feelings. Look for places that require improvement and sources of friction, such as complicated or drawn-out steps. Then, take prompt, proactive action to solve these problems, avoid aggravating them, and maintain their interest.
- Take action
It is time to put them to the test once you have collected all the necessary data. Try several strategies to see which are most effective for your company:
- Make customized experiences
The client retention rate for a business may be significantly increased by personalizing the buying experience. Create customized content like blog entries and product suggestions using consumer information like purchase history and browsing habits.
- Provide the best customer service possible
When it comes to boosting client retention, nothing beats superior customer service. Customers’ perceptions of your brand and their decision to do business with you may be significantly affected by prompt and personalized help. In light of this, invest in a customer support crew that is informed, sympathetic, and accessible through various media.
- Utilize a Two-Way Omni channel Approach
Thanks to two-way Omni channel assistance, you and your customers may communicate directly with one another. You can develop a 1:1 experience that other channels cannot provide using two-way communication technologies like SMS and email marketing. This strategy offers more prompt and individualized service, boosting client retention and loyalty in retention marketing.
Few customer retention marketing metrics you should be measuring
Here are a few customer retention marketing metrics you should be measuring:
- Customer turnover rate per month
A high-level indicator that shows you what percentage of your customers leave each month is the monthly customer turnover rate. It’s the opposite of your client retention rate and is favored by those bothersome pessimists.
The formula for the monthly customer turnover rate:
(number of customers lost in a month / total customers at the beginning of the month) X 100 = monthly customer churn rate.
- Rate of Repeat Purchases
The repeat purchase ratio (R.R.R.) is the proportion of consumers who have made additional purchases from your business. The marketing and sales teams frequently utilize this statistic to gauge client loyalty to evaluate the efficacy and results of the business’s customer retention strategy.
- P.S., or net promoter score
The Net Promoter Score (N.P.S.) frequently measures client retention. This indicator emphasizes customer satisfaction and displays the likelihood that customers will refer others to your company.
Obtaining your N.P.S. is as follows: Net Promoter Score = % of Promoters – % of Detractors
- Revenue churn rate and monthly recurring revenue (M.R.R.)
The total of your monthly recurring income streams (excluding pennies discovered on the office sofa) is known as M.R.R. Your revenue churn rate shows how much of your M.R.R. is leaving each month. The formula for calculating revenue churn rate: [(M.R.R. at the start of the month – M.R.R. at the end of the month) – upsells]/M.R.R. at the start of the month 100 = Revenue churn rate
Customer retention marketing is important to the success of any organization since it focuses on preserving long-term connections with current consumers
Retaining consumers is frequently less expensive than obtaining new ones, and it may result in enhanced profitability, a favorable brand image, and increased customer loyalty through retention marketing. It is necessary because the cost of recruiting new consumers is substantially higher than the cost of maintaining existing customers. Overall, developing a customer retention plan is an essential component of any growth strategy.