Used in physical retail businesses for decades the ecommerce world is now starting to take notice and implement retention marketing strategy in their businesses.
Online shops and service providers are shifting their focus to retention in order to create engaged customers that return again and again.
What is a Retention Marketing Strategy?
Retention marketing is defined as the following:
Retention marketing is the activities a store uses to increase the likelihood of a customer purchasing again, while focusing on increasing the profitability of each repeat purchase.
But put simply, it’s the shift in the primary goal of your marketing strategy. You shift the focus from the acquisition of countless new customers to retaining and increasing the profitability of your existing customers.
We aren’t saying using a Pathwwway Gambling retention marketing strategy is the only way you should market your business. What we are saying however is that you should start planning your retention strategy before you have a single customer. That way you will know exactly how you’re going to retain your first patron when they make a purchase.
Why Do I Need To Start Retention Marketing Early ?
It’s common sense that once your business get’s to a certain size it becomes much more difficult to grow by adding more customers than it does to grow by getting more sales.
A recent study by Harvard found that just a 5% increase in online retention can boost a company’s profits by up to 95 percent.
And that’s the reason we believe you should think about utilizing a retention marketing strategy in your business as soon possible.
What Are the Benefits of Customer Retention?
Long term profitability
Using retention marketing in your business will increase purchase frequency and also repeat purchase rate. A boost to these two metrics is a major advantage for any business because it means that you are increasing your customer’s lifetime value (CLV).
This in turn leads to long-term profitability rather than short-term acquisition gains for your business.
Starting these systems and Pathwwway Gambling processes at an early stage of your business can help you to forecast sales and help you to gain loyal customers who will stick with you as your business grows.
Your marketing mix should include a balance of both retention and acquisition marketing. These two tactics need to be used in tandem throughout the lifetime of your business. As your business grows you can adjust the balance of the two by adding more & more retention marketing tools into the mix.
Increase ROI for every customer
It’s becoming tougher than ever to acquire a customer. Costs relating to internet marketing tactics are rising rapidly. Driving fresh eyes to your website now costs more than ever before.
When you implement and utilize a retention marketing strategy you make each customer that you acquire more valuable to your business. Through retention marketing you are essentially increasing the return on investment (ROI) of every new customer you acquire.
This is backed up by many studies that have found that return shoppers are 9 times more likely to convert on a purchase than a first time shopper, meaning more sales for you!
It’s Cheaper than Acquisition
This wouldn’t be an article about retention if we didn’t mention the cost benefit. If you haven’t already heard, it’s a lot more cost-effective to keep a client in the fold than to find and bring in new customers.
There has been plenty of research into acquisition vs. retention, and they always come back with the same conclusion. Retention is the more economically viable and the more cost effective of the pair.
How to start Retention Marketing Early
It can be tempting to spend your entire marketing budget on customer acquisition early on in the game. Throughout this article you’ve learnt that retaining customers has a myriad of benefits for your business.
The most luring of benefits of course being that retention is far cheaper than acquisition, but it probably isn’t the easiest! There’s a lot of hard work that goes into designing and building this marketing technique.
Here are three of the most popular and successful ways to encourage repeat purchases and build a retention marketing strategy into your business.
One of the easiest ways to demonstrate that you value your customer’s loyalty is by offering them products or services at a discount rate or offer them a free gift once in a while. Many brands choose to do this with loyalty point systems.
This method of retention marketing is very easy to start and it’s a simple concept that consumers know well, but it doesn’t help you to build deep relationships with your customers. This makes it more difficult to encourage customers to value your brand as a quality service.
Discounting can work but you need to be very mindful of how often you use this option and how it affects the perception of your brand with your existing customers.
- Excellent Customer Service
In our modern fast paced world where everything is on-demand, customers have come to expect a very high level of quality customer service. Every business a customer interacts with online and offline, including yours, has high expectations upon them.
Great customer service includes things like quick responses to inquiries and free shipping as standard. Focusing on this retention marketing strategy allows you to take your customer service above and beyond your competition.
A focus on great customer service also helps increase overall customer satisfaction which in turn makes customers feel valued and compels them to share their experiences with friends and on social media.
Personalization directly impacts the customer experience.
It’s becoming apparent that customers appreciate brands who take the time to create experiences specifically for them.
Whether that’s done by email marketing campaigns, product recommendations, or upselling. All customers love personalization because it enables them to feel that the brand has their interests at heart, this allows them to form a deeper connection with your brand, which is great for your sales.
Retention Marketing is an amazingly effective tactic that can really boost growth in your business. Remember that when you design your Retention marketing strategy that is will be most successful when both you and your customer benefit at the same time. If you can accomplish that, your customer satisfaction and referral rates will continue to increase with no signs of stopping!