Retention in marketing is the need of the hour for every brand that wants long term profitability. Did you know that repeat customers spend 33% more than new customers? Retention in marketing focuses on getting repeat customers to engage and do higher value purchases with your brand. Retention is the new growth strategy because it’s cheaper than acquisition. It’s almost 25 times more expensive to acquire a new customer than it is to retain an existing one. Although retention has always been very critical, it’s more important than ever due to the stressful times we’re in. Brands must figure out ways to hold on to their most profitable customers.
Based on a Deloitte survey of 1000 CFOs, 3 of the 4 top strategies to impede a recession were customer retention oriented. A small increase in retention has the capacity to cascade and multiply its effect over time. Long-standing customers who have had an unforgettable customer journey experience are far more likely to return and spend their money on your brand. Repeat purchases from existing customers equal repeat profits at a zero acquisition cost. Drawing on a research by Harvard and Deloitte, customer retention strategies are a proven measure used by top companies like Samsung and Honeywell to successfully ride the waves of a downturn.
There are several reasons to make retention in marketing a priority:
- Cultivate customer loyalty and increase their customer lifetime value.
- Effective retention marketing strategies help build lasting and meaningful relationships with your customers.
- Drives positive brand recognition and helps you differentiate your brand from competitors.
- Loyal customers bring more referrals through positive word of mouth.
- Improve product features through the feedback you get from your customers.
Here are some best practices to effectively drive retention in marketing:
- Have a strong onboarding strategy in place for new customers for them to have a seamless experience with your brand. Etsy does it really well.
- In a survey, almost 68% of respondents said that lack of customer service was their biggest reason to leave. Brands need to ensure great customer experience to avoid churn. Remove as many barriers or frictions as possible to make it easier for customers to get what they want.
- Leverage customer data to offer personalized offerings and customer communications. Retention marketing is all about connecting with your customers at a deeper level. And effective insights can help you keep your customers for a longer time, and the longer they stay, the better you can get to know them and their needs.
- It’s vital to enable your customers to be able to share feedback and you can do that when you listen to them intently. A great way to do this is by doing surveys or interacting with users on social media, reviews, NPS score and the like. Online reviews are great to garner customer feedback. 95% of shoppers read online reviews before making a purchase.
- Businesses with a robust loyalty program witness significant increment in customer retention rates. In fact, 77% of consumers say loyalty programs make them more likely to stay with brands. Rewarding customer loyalty is a great way to make your customers feel valued and have them come back for more. This also builds strong brand perception and gives your brand the competitive edge that it needs to continually grow and succeed.
Annex Cloud’s advanced customer retention and loyalty solutions are designed to engage and reward your most valuable and profitable customers. Our ability to segment customers and personalize customer engagement platform has led to significant increases in average order values (AOV), frequency of purchase (FOP), and most importantly, the ability to retain valuable customers who are driving the majority of your revenue. To further illustrate this point, Sugarfina, a premium boutique candy company, saw their revenue increase by 15% and repeat transaction frequency increase by 57%. Call us today.