Retention marketing is a set of strategies implemented to keep clients engaged, satisfied, and willing to buy. Such practices are usually associated with offering relevant and catchy content to consumers to raise the company's lifetime value and profitability.

Why is retention marketing important?

According to BIA Advisory Services, repeat customers spend 67% more than new clients who purchase for the first time. This is one of the main reasons why businesses focus on retaining existing customers and avoid spending costs on acquiring new customers who can buy once and go. Below, you can find even more reasons to consider retention marketing for your company.

Repeat clients save money

It is more expensive to attract new clients than to motivate the existing ones to return for more deals. To expand the customer base, a business has to come up with innovations, and they are never cheap. No strategy guarantees success, so that you may waste your money. The returning users offer higher conversion rates.

Overall, the chance of selling a product or service to an existing client is up to 70%, while for a newbie, this mark fluctuates between 5% and 20%. These statistics from the book Marketing Metrics indicate that existing customers make better purchases and increase profits for your business.

Besides, it requires less cost to engage a customer who has already tried your offers. To minimize acquisition costs, a business should focus on returning clients. Finally, competition is lower if you can rely on repeat customers.

Brand loyalty guaranteed

Returning customers tend to show more loyalty to the brand. They would rarely prefer to switch to another company unless something goes wrong and the quality of your product or service goes down. The buyers usually choose 2-3 shops from each category they are interested in, and they attend only those places for purchases.

Most importantly, loyal clients will bring you new customers. Word-of-mouth has always been a free and robust approach; sources like McKinsey prove that. Thus, if you need a new cool ad for your product line, try to satisfy the existing clients, and they will do their best to promote your business to their relatives and friends.

No extra information is required

Returning customers need little to no information on your product or service. At the same time, new users require plenty of time to compare your offers to competitors’ ones. Repeat customers save both your time and money that you could have spent on additional promo materials.

Now that you know the benefits you can reap after implementing a customer retention strategy, it’s time to explore the retention rate and how it influences your business.

What is the retention rate?

Also known as CRR, this is a critical metric that shows whether your marketing and client care efforts are fortifying your company and bringing in the expected revenues. This indicator indicates the right time to make crucial changes or switch gears to hit the company targets.

These are the steps you need to take to get your customer retention rate at hand:

  • identify the timeframe you want to estimate your retention rate for (month, quarter, or year);
  • find out how many customers you had when this period just started;
  • calculate the number of clients you had at the end of this period;
  • estimate the number of new customers you managed to acquire during that time;
  • use the customer retention formula to get the measure.


You can calculate your customer retention rate using the formula below:

Retention Rate = ((Number of customers at the end of a specific period - Number of new customers acquired during a specific period) / Number of customers at the beginning of a specific period)* 100

To understand all the calculations right, you need an example using numbers. That’s why let’s say that you have:

  • 500 customers at the beginning of the month;
  • 700 customers at the end of the same month;
  • 300 new customers acquired during this period.

It’s time to proceed to the calculation of your retention rate:

Retention rate = ((700 - 300) / 500)*100 = 80%

Your retention rate for that specific month will be 80%.

When company owners calculate retention rate, they might wonder why not just acquire new customers rather than try to increase the rate in various ways. In the next section, we’ll unveil the main difference between acquisition and retention and focus on the best strategy in terms of your budget.

Customer Acquisition vs Retention

The two terms are closely related to customers, yet the first one focuses on bringing new customers to your business, whereas customer retention strives to keep existing clients for various reasons, including customer acquisition costs, purchase value, loyalty, etc. We’ll discuss these and more below.

Customer acquisition is the process of attracting leads and bringing new customers to your company. It focuses on expanding your customer base, increasing market share, and boosting the short-term profitability of your business. To acquire new customers, companies spend additional costs on advertising, content marketing, and social media to establish awareness and recognition. They offer free trials, discounts on first purchases, and various incentives to encourage more buys. Since more and more people use social media to explore new products, businesses often collaborate with influencers, create sponsored content, and run various ads on Instagram, Facebook, and TikTok to attract new prospects.

Customer retention is the process of keeping existing customers happy, loyal, and engaged so that they stay with your brand for a long time. When businesses focus on customer retention, they have various goals, including higher customer lifetime value, customer loyalty, and constant profitability. To improve customer retention, companies improve customer support, implement loyalty programs, leverage personalized approaches to every customer, use email campaigns and proactive chatbots, and collect client feedback.

Customer retention is cost-effective and ensures consistent revenue streams. When customers are happy with a brand, they can become free advocates of your company, recommending products to their friends and colleagues.

When the differences and benefits of retention for your business are clear, you might want to explore some effective strategies to keep your existing customers and encourage them to perform repeat purchases.

Retention Marketing Strategies

Numerous retention marketing strategies encourage you to focus on various areas of your business that require close attention. We’ll explore the most effective of them to help you retain your existing customers and entice them to repeat their purchases.

Learn more about your customers

Dedicate some time to collecting personal information about your clients. We do not mean their contacts only – try to surf their social media accounts like Facebook or Instagram to know more about how they spend their free time, what kind of places they attend, their favorite food and colors, etc. You should also find out which holidays they celebrate to know when to send another promotion.

Look below to learn how SendPulse allows you to use customers' data. Create as many variables as you need and use them to send personalized offers.

Dedicate more attention to email campaigns

After gathering the required information about your existing clients, consider how to design messages based on that information. Consider a personalized approach for each category of users.

Look at Fiton's email. The brand uses its birthday to increase loyalty and sales.

Offer loyalty programs and discounts

Everyone loves discounts. However, you should not offer them around the year as the customers may lose interest. Update the coupons with the promo codes once a month or six months. Make them 15-20% off. Inform clients about your discounts via emails that you can create with the help of SendPulse.

Below is how the pet supplies store promotes its loyalty program via email.

Provide user-friendly customer support

A client care service is the face of any company. You should hire enough experts to work by shifts to make this team available 24/7. The reps of this service should know the product in-depth to solve any problems ASAP. Even repeat customers hate waiting in lines!

HubSpot uses live chat to support its users 24/7. They can receive answers in seconds for frequently asked questions and use human handoff to solve complex issues with human agents.

Offer to become a member of your community

It is simple to turn subscribers into clients. Clubs and premium memberships make customers feel special. Being a VIP is always attractive because you get more than others. If you sell goods to different parts of the world, you can offer several-day free shipping. If you own a bookstore, you may promote free books of specific categories in exchange for an annual membership fee.

H&M offers exclusive discounts for members only. Big brands use this method to increase customer engagement and sales.

Run reactivation campaigns

Sooner or later, subscribers may lose interest in your products. If you want to engage them again, focus on personalization. You should divide the list of such customers and create a message for each. Also, it is critical to determine the reasons why users leave and improve these weak points.

National Geographic asks subscribers to choose the topics they’d love to know more about. That is another way to re-engage sleepy users.

These are the best practices that will perfectly suit B2C brands and help them keep customers happy and satisfied. However, if you have a B2B company, your retention marketing strategies should be slightly different. If you have such a company and target audience, you better check the B2B retention marketing strategies below.

B2B Retention Marketing Strategies

When focusing on B2B retention, you need to leverage effective strategies for successful improvements. Here’s a list of best practices you can take advantage of. Let’s check them out.

  1. Ensure seamless customer service. Successfully retaining your existing business clients implies providing them with exceptional customer support. This includes dedicated account managers who ensure a personalized experience and build trusting relationships with these customers. Besides, 24/7 assistance should be provided so clients in different time zones can reach your support agents and get their answers instantly.
  2. Implement a personalized approach. You should develop personalized communication. Consider tailoring your offers based on customers’ needs and problems, making them more likely to buy these products. Tailor your email campaigns, social media messages, SMS, and content to address the challenges clients face at the moment and strive to solve them.
  3. Consider creating loyalty programs. You can keep business clients with your brand by rewarding them for repeat purchases, referrals, and long-term partnerships. Develop a loyalty program that gives customers back for staying with your company. It can include exclusive offers, discounts, or early access. This way, you can show your clients appreciation and create more reasons to stick to your business. Consider creating a referral program encouraging your clients to refer to new businesses and get some perks.
  4. Collect customer feedback. To successfully improve your business and boost your retention rate, you need to identify issues that make business customers churn out. You can do it effectively when conducting regular surveys and polls. NPS surveys will help you assess customer loyalty and satisfaction and get insights into the problems and their improvement. Consider using client advisory boards to obtain some insights from the most loyal clients that will help you with product development and more effective strategies.
  5. Develop a customer success program. Ensure that your onboarding strategy covers all the essential areas for successful product usage. You should also monitor key clients’ success metrics to determine whether they face problems and solve them promptly instantly.
    Show your appreciation. Consider conducting special events to show appreciation and improve your relationships with clients. You can also do it by sending congratulations on clients’ anniversaries with your brand through email campaigns or messages on social media and messengers.

Now that you know how to improve customer retention using our strategies, we’ll show you how to do it fast and efficiently without putting your team under a lot of workload with retention marketing automation. We’ll discuss this topic in detail in the next section.

Retention Marketing Automation

Retention marketing automation is an excellent solution for companies striving to keep existing customers by making them satisfied and loyal. Besides reducing the workload on your team, you can automate most processes and prevent human error if you implement the right strategies. You can find some of the most effective ones below.

  1. Send customers personalized email campaigns. Consider dividing customers into segments based on specific criteria, including behavior, preferences, purchase history, location, etc. With behavior-triggered emails, you can send email campaigns with relevant offers once clients perform specific actions on your site. All these features can be found in one tool like SendPulse, helping you create and manage email campaigns that align with customers' needs and behavior patterns.
  2. Collect customer feedback using chatbots. After customers buy from your brand, make sure to send them emails asking about their experience with your product. Give clients some space and time to try your product to share fair responses and then ask them for their feedback using emails or chatbots. You should also send an NPS survey allowing customers to assess their likeliness of recommending your company to their friends and colleagues. This way, you can identify your brand’s problems and find space for improvements.
  3. Automate reminders about events. If you have an online school, informational product, events, or webinars, consider setting up automatic reminders and sending them to customers immediately. This way, you ensure that clients remember about your event and will definitely attend it. You can set up the date and time for these reminders once and have them delivered to the right recipients without manual work.
  4. Follow up with customers to identify strengths and address challenges. Don’t lose contact with customers after they complete the order. Make sure to ask them about their experience with your product and brand in general, provide them with personalized recommendations, and send updates using email campaigns and chatbot messages. It will help your company stay on top of mind and consider your products once clients need them. When customers share some negative experiences with your product, address these issues and prevent them from happening again. It will improve loyalty and satisfaction, resulting in higher retention rates.
  5. Run re-engagement campaigns. When your existing customers don’t show any activity for a long time, it’s time to launch re-engagement campaigns encouraging clients to action. To do it right, you need to conduct a small research, enabling you to collect all the necessary data about these clients and provide them with the right offers, products, and solutions. By exploring purchasing and browsing history, you can discover what products these customers are interested in and likely to buy. Then, send email campaigns offering discounts, special deals, and promos. Time sensitive offers will make them take the desired action faster. Also, consider reminding customers about the items in their shopping carts by sending emails and chatbot messages.
  6. Implement A/B testing. Test different variations of your email campaigns using special tools. It will help you identify subject lines, content, and call-to-action buttons that work best with your audience. Since these elements of automated email campaigns influence customers’ decisions, you should be accurate when conducting these tests.

Besides exploring the strategies, many online schools invite marketers to take courses on customer retention and ways to do it successfully. Many of them are available online, but we’ve chosen the best for you to consider.

Retention Marketing Courses

If you google retention marketing courses, you can encounter plenty of them, yet the quality can be doubtful. We’ve listed the 3 best courses from reliable platforms to take a look at. Hope that after exploring these courses, you can develop a retention marketing strategy for your business successfully.

Institute of Data & Marketing

This course is suitable for everyone who is related to customer retention. It aims to help B2C companies plan and execute effective marketing campaigns to keep customers with a brand long-term. Once enrolling in the course, participants will also receive the ‘DMA Data Guide.’ This course raises the following topics: the process of tracking customer journeys and boosting customer loyalty. Marketers will find customer retention strategies that work for different audiences and businesses.

Udemy

Udemy offers marketers a course, allowing them to increase revenues by retaining existing customers. The course focuses on how CRM, customer care, customer service, customer experience, and satisfaction contribute to the profitability and growth of your business.

Coursera

On Coursera, marketers can find plenty of courses, including those about customer retention. Students will learn about factors influencing customer retention, assess customer behavior and identify ways to improve retention strategies, discover best practices to boost customer satisfaction and analyze feedback to improve your overall strategy.

Exploring courses can be incomplete without having some examples as a hint. That’s why we’ve provided some retention marketing campaigns with examples below. Let’s take a look to grab some inspiration.

Retention Marketing Campaigns with Examples

Here are some excellent examples of the successful implementation of retention marketing campaigns. Check them out to learn how to keep your existing customers loyal to your brand and happy with it.

Innisfree — Rewards

Innisfree, a Korean skincare company, encourages customers to stay loyal by implementing a rewards program. Existing clients can purchase beauty products, receive points, and unlock exclusive perks while shopping. The brand provides clients with three points for every dollar they spend. Then, customers can redeem points and get their gifts. The company also provides clients with points when they share their feedback on products and video or photo reviews. This way, the company not only ensures perks for staying loyal but also focuses on improvements to boost customer satisfaction.

Sensatia Botanicals — Congratulation Email Campaigns

A customer’s birthday, brand anniversary, or holiday is an excellent reason to interact with your customers and provide them with special offers. In turn, these offers will help you re-activate your clients and encourage them to purchase. Sensatia Botanicals sends birthday congratulations and provides clients with gifts. The brand offers voucher codes, allowing clients to enjoy their 20% discount. They can download barcodes to buy products at the company’s retail stores and have seven days to redeem this promo code.

Uber — Referral Program

Uber uses a referral program to encourage existing drivers to bring new ones and receive perks. All these actions can be done with the help of the Uber Driver app. Existing Uber drivers need to share the invite code available within the app and then monitor their friend's progress. When a new driver completes a specific amount of trips during the mentioned time frame and meets all the requirements, the existing driver earns money. This way, the company re-engages existing drivers and encourages them to become brand advocates, bringing new people interested in this position.

Congrats! Now you know what retention marketing is and what benefits you can reap after incorporating it. Hope that our effective strategies and inspiring examples will empower you to develop retention marketing campaigns that contribute to your satisfied and loyal customers, long-term revenue streams, and company growth.

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