Smart Ways to Use Marketing to Improve Customer Retention
We’ve all heard the saying, “the customer is always right.” If you adhere to that motto, you know how important your customers are. Afterall, without customers you don’t have a business. To make repeat purchases, customers need to feel welcomed and appreciated—that’s retention marketing, a customer-first approach that helps you to build authentic, lasting relationships.
To generate customers, businesses commonly use an integrated marketing strategy to attract and incentivize leads to become more interested in a product or service. That process of lead generation is typically described as a “funnel.” Lead generation fills your pipeline with prospects, guiding them from attention to action through the marketing funnel, a series of steps—awareness, interest, consideration and conversion—that a lead goes through before being converted to a customer. Lead generation is essential for growth—your business can’t flourish without new customers.
It takes plenty of time, and resources to turn leads into customers and once you finally get them, you’ll want to keep their attention! That’s when you’ll shift your focus from lead generation campaigns to retention marketing. But to keep them, be sure you are attracting the “right” customers in the first place—the ones who need what you sell and align with your brand’s values. It’s no surprise that customer satisfaction improves brand loyalty. Creating satisfied customers means providing an exceptional customer experience, which results in organic brand awareness and improved customer retention.
Retention marketing is a strategy that focuses on customers who have already done business with your company. However, the goal isn’t to increase the number of customers, but to increase customer return rates and drive purchase frequency. Afterall, losing a customer costs more than acquiring a new one. For both small and large businesses, even a slight increase in your customer retention rate could dramatically boost profits. In fact, your existing clients often represent your biggest revenue growth opportunity.
The goals of a customer retention marketing campaign are to understand what’s important to your customer and keep them engaged. Businesses must strive to always create a customer experience that is consistent, predictable, strategic and properly targeted to each customer segment or persona. A happy customer will share and engage others simply because of their excitement with your product or service.
For the business-to-business sector, customer retention is centered on delivering outstanding client service and strategies, understanding their needs and developing tactics that align with their goals. For business-to-consumer segments, retaining customers means forging an emotional connection with them and continuing to pivot as the marketing landscape changes. If you have different offerings, you must ensure that your message, images and products are targeted through your segmented marketing campaigns, aligning with the customer personas you establish. For associations, the focus is on creating value for members in the form of resources, networking and educational opportunities. That will keep members engaged and advocating for your organization.
There is a fine balance between lead generation and retention marketing. If you focus too much on retention marketing, your business won’t grow. But once you find the right balance, your business growth rate will improve, increasing revenue considerably. According to Insightly, 80% of companies spend over 70% of their marketing budget on lead generation, which means only 30% of those budgets support customer retention.
4 types of retention marketing campaigns
- On-boarding campaigns are designed to welcome and engage new customers, creating a memorable first impression
- Active customer campaigns are used to maintain contact with and educate current customers
- Lapsing customer campaigns are meant to capture the attention of customers who aren’t as engaged and may be on their way out of the buyer’s cycle
- Reengagement customer campaigns target customers who haven’t returned to your business for more than one year
Although existing customers have gone through your buyer’s journey, an integrated marketing campaign is needed to keep them engaged. If you let them drop off the radar following a purchase, that is a lost opportunity for your business and creates a negative experience for them. Your buyer’s journey should cycle around again and again. Improving customer retention is one of the most powerful ways to grow your business. Just a few tweaks to your strategy will keep your customers coming back.
Here’s the top seven ways to use marketing to retain customers:
Tip #1: Develop a communication calendar
Create a communication calendar that details the type of communication—educational or promotional emails, direct mail offers or messages of appreciation, as well as the frequency in which you will contact your customers. Similar to a content calendar, a communication calendar will essentially serve as roadmap for communication with your customers, ensuring that you are reaching out often enough, but not too often. Balance is key. If you don’t monitor the flow and frequency of communication, your customers may feel inundated and your communication tactics may have the opposite effect. The right amount of communication eliminates post-purchase doubts, builds trust and keeps your brand top of mind.
Tip #2: Leverage content marketing
Sharing content to keep your customers engaged across many different channels and mediums is key. Public relations is the backbone of every successful integrated content marketing campaign and one of the most effective tactics for retaining customers. The content marketing funnel identifies the customer journey phase of the buying process. It is a smart way to improve customer relationships and build new ones. Coupled with the right public relations strategy, content marketing nurtures new leads and prospects through the buying process, turning prospects into customers.
Once you’ve generated awareness and gained traction with content marketing, the focus shifts to staying relevant and continuing to show your value. For example, use blogs to keep your business top of mind, while also boosting SEO. Provide content that your customers need to make informed purchase decisions—content that differentiates you from your competitors. Coordinate your topics to flow out to target media outlets, social media channels, enewsletters and podcasts or webcasts—all at the same time. That will ensure your branding is aligned while keeping your customers engaged and focused.
Tip #3: Send personalized messages
Email marketing is an essential part of your customer retention strategy. Strike a happy balance with useful information for your customers alongside your offerings. If open rates are low or unsubscribes are on the rise, don’t keep resending the same type of email. Instead, test and re-optimize your content.
When you send value-added educational emails to your customers, you are giving them reasons to buy from you. One of the easiest ways to strengthen relationships with your customers is to offer personalized experiences, content and emails that add value. Get to know your customers and deliver what is important to them—anticipate their needs and provide timely solutions.
According to a study by Yes Lifecyle Marketing, when emails are personalized with the recipient’s name in the subject line, opens increase by 50%. In addition to using a customer’s name in an email, ensure that your customer’s biggest interests are put forward. A digital marketing platform with artificial intelligence will facilitate engagement, ensuring that you are sending the right message at the right time to the right customer.
Tip #4: Use social media to remain engaged
There’s no better place to cultivate relationships with your customers than on social media. It may sound obvious, but start by making sure your business is easy to find on social media. It is a cost-effective platform to create and improve relationships with your customers, prompting them to continue using your product or service. Post regularly on the social media channels your customers use and engage with your audience. Create groups where prospects and customers can share opinions and start (moderated) conversations.
One of the most important aspects of your social media marketing strategy is to build a social media content calendar that outlines upcoming posts for your social media channels. On social media, two-way communication is important to engage and connect with your audience. Be sure to respond to comments, thank new followers and reply to brand mentions. Take advantage of social media analytics that provide a deeper understanding of your customers’ behaviors and preferences.
Tip #5: Offer a broad range of customer loyalty rewards, resources
People support businesses they like and have a strong tendency to like people who help them. Think: mini-classes, free trials and webinars or consider offering a “freemium” version of your product. Or consider loyalty programs, rewards and discounts. Be sure to talk about your loyalty program on social media! Anytime you can offer a free resource to your customers, you are giving them something of value and something to talk about!
Tip #6: Host free webinars
Build a community with your customers that goes beyond the product. Webinars are a dynamic and effective way to support customer retention through an additional distribution channel. Offer them monthly as a way to engage with your customers. They provide a way for your customers to learn about your product or service offerings. Be sure to build in time for Q&A.
It’s been reported that webinars increase customer retention and loyalty by 69%. Don’t forget to create a webinar content library—another free resource for your audience!
Tip #7: Use automation to re-engage customers
Marketing automation should be a combination of software and strategy to automate marketing activities. Use it to make your touchpoints more relevant and to engage your customers on a personal level, especially those who are less connected or are on their way out of the buyer’s cycle. Automate email marketing, social media posts and digital ad campaigns. Marketing automation can also be used to send welcome emails, incentives and rewards, as well to collect customer feedback after a purchase as a way to improve the customer experience.
As with all marketing tactics, it’s important to continuously review and improve your customer retention strategy—it has remarkable potential to deliver the highest ROI of all of your marketing programs. Take a look at your customer retention program on a quarterly basis. Which type of content or which tactics are getting the most engagement and generating valuable ROI?
If you aren’t retaining your existing customers, you are wasting valuable time and marketing spend. Amid the pandemic, people have less money to spend. Your marketing efforts should focus on keeping your customers’ attention, so they are ready to return to your business when recovery comes. Now especially, it is critical to retain the customers you have because once they are gone, it’s going to be much harder (and costly) to replace them.
In 2021, having an integrated marketing strategy will be key. With 81% of consumers doing research online before making a purchase and more than 70% of business-to-business buyers doing the same, consumers are doing the legwork before they will even consider engaging with your brand. The tactics that are important to gaining new customers are also important to retention, with perhaps a slightly altered message.
Leads, customers and sales are the three most important goals of every business. Once you’ve converted leads, take the next steps toward expanding beyond the traditional funnel with marketing retention and advocacy, which will increase revenue exponentially.
Ready to put lead generation and customer retention to work for your business? Contact us today to get the conversation started.