What is Customer Retention Marketing?
In marketing, there is a simple truth: It is easier and less expensive to retain existing customers than to find and recruit new ones. However, businesses often forget the importance of retention marketing and inadvertently fail to keep existing customers engaged, happy, and loyal. When done right, retention marketing can result in getting more dollars out of customers, increasing customer satisfaction, and turning your customers into your most prominent marketers.
So, what is retention marketing, and how can you sharpen your retention marketing efforts? Let’s take a look.
Defining Customer Retention Marketing
Customer retention marketing refers to strategies that keep existing customers engaged in your business. In that capacity, customer retention marketing concentrates on drumming up repeat business from customers who have already purchased from you.
Customer retention marketing may take on many forms. On the one hand, you may market to customers who have purchased from you with offers nearly identical to purchases they have already made. After all, you’ve already confirmed that customers are interested in these specific areas, and developing a retention strategy that concentrates on creating repeat business may be highly beneficial to your bottom line.
You may find that this strategy doesn’t go far enough to fit your marketing needs. As such, you may want to concentrate on a marketing strategy that engages in cross-selling or up-selling. Cross-selling means selling a different product or service to a customer while up-selling means selling them something more expensive and/or of higher quality. If a customer already likes your brand, then the opportunity exists for you to make such a sale.
Why You Need A Customer Retention Marketing Strategy
Retention in marketing is critical for many reasons.
First, it’s less expensive than new customer recruitment. Finding new customers can be a significant challenge and highly expensive. You may have to spend relatively high to see any new business. Still, with customer retention marketing, you’ve already solved the most expensive problem: the customer is interested in and has already used your business.
Next, a customer retention strategy can increase the lifetime customer value (LCV). This metric determines how much a customer spends with you throughout the entire transaction history. By increasing your LCV, you can increase your bottom line more cost-effectively than through customer acquisition marketing.
Finally, customer retention marketing is easier because you already have the data at your fingertips. Suppose your business has a robust data collection campaign. In that case, you can get an excellent idea of who a customer is, what demographics they occupy, and what messages they will most likely respond to. This information allows you to customize your message better to maximize impact.
Specific Customer Retention Strategies
Every business can utilize different customer retention strategies. Fortunately, there are many types of strategies that work across industries.
First, remember the simple importance of making sure your customers have the best experience possible when doing business with you. To that end, work to improve your customer experience. When done right, you can improve the customer experience by keeping customers happy and exceeding their expectations. Doing so can enhance your ability to serve your customers, keep them happy, and turn them into marketers on their own. Improving the customer experience involves improving your digital products or customer service.
Second, use the available data you have at your disposal to serve your customers better. If you have the right CRM, you likely have an array of information at your disposal that you can use to better understand your customer’s needs. You may also need additional data, likely demographic profiles, to help you know what products or services your customers want. Armed with this data, you can work with outside experts to determine what products or offerings your staff may be interested in pursuing.
Next, offer returning customers discounts. If a customer already likes your business, consider offering them a loyalty discount that further entices them to return to your store. Doing so can allow you to give them access to different products and ensure they better understand how you can serve them.
Finally, create content that gives your existing clients something extra. You can easily connect with existing customers with the right data, like emails or social media profiles. You can then give them access to products, information, or other content that isn’t otherwise available to new customers. This process makes customers feel like they are getting a bonus by simply doing business with you, thus making them feel valued and appreciated.
Customer retention marketing is as important as new customer acquisition, but there are important distinctions between this type of marketing. By concentrating your marketing efforts on existing customers, you have a better chance of increasing your bottom line by targeting customers who already like your business. This effort isn’t easy, of course, and it requires a subtle understanding of the nuances of customer retention marketing and an ability to access data you may not already have.