The heady thrill of the chase is something that today’s digital marketers know well; shiny new customers being acquired is good news all round. But how to make sure we retain those customers? This blog will give you a framework to ensure you don’t forget this vital part of your marketing strategy.
First, what is retention?
- Retention is an important part of your marketing strategy as it is essentially maintaining or preserving your existing customer base, keeping them loyal to your product offering.
- Econsultancy reported that ‘attracting a new customer can cost up to five times as much as keeping an existing one’.
- Garner Group reported that ’80% of your company’s future revenue will come from just 20% of your existing customers’.
- This blog assumes that as a wider digital marketing strategy customers are being acquired and converted, and the retention plan is being put in place to engage with those customers.
To calculate retention rate you can use this formula:
Customer Retention Rate = ((CE-CN)/CS)) X 100
- CE = number of customers at end of period
- CN = number of new customers acquired during period
- CS = number of customers at start of period
- For example: You start the month with 100 customers. By the end of the month, you have 105 customers (15 have cancelled their contracts and you brought on 20 new customers).
- ((105-20)/100)) X 100 = 85%
This gives you snapshot of your current CRR, however this is only useful if you track and compare it regularly.
To develop your digital marketing plan to raise retention rates, break your planning down into 4 areas:
- Customer understanding and building personas
- Setting objectives for a retention plan
- Developing tactics for a retention plan
- Monitoring and measuring effectiveness
- Before embarking on creating a digital marketing plan to increase retention rates, we should always review our existing customer data to understand more about our customer types.
- Digital marketing gives us the opportunity to track and monitor where our customers came from, how they found us, and how they react to certain communications and channels.
- As a result of this, we can create customer ‘personas’ to put the customer at the heart of our thinking, allowing us to service their needs and desires via their preferred communication methods.
Objectives of a retention plan
To avoid wasting time, effort and money, be clear about what you are trying to achieve with your retention plan.
- Some examples of SMART marketing metrics for retention are:
- Drive 30% of our existing customers to make a 2nd purchase within 12 months
- Drive 50% of our customer database to be ‘active’, measured by either visiting the site, logging into their account or interacting through social media
- Drive 20% of our customer database to recommend us to a friend, measured though an incentive scheme
Tactics of your Rention Plan
- Owned Media
- Your website: your website must retain your overall brand offering always, however there is opportunity to refresh your homepage with new products offers and special news, to encourage those returning visitors to see what’s new.
- Your blog: your blog must be kept up to date, as it is great way of generating new content on your site, which can then be linked to through your social media channels, encouraging visitors to your website. In addition this is positive for on-page SEO.
- Email campaigns: not only should a customer’s first purchase trigger an automated welcome email, abandoned cart emails can also be useful to convert customer back into purchasing. In addition, all customers on your database should receive a segmented, relevant and timely email with personalised content regularly.
- Social media: as part of your content strategy, social media channels can allow you to be part of the conversation. Indeed a customer views your SM posts as part of your brand, so monitor likes and comments as if they were emailed directly to you.
- Paid Media
- Your advertising plan for retention should compliment your acquisition advertising strategy, through areas such as a remarketing campaign to customers who have visited your site or abandoned a cart
- In addition it is worth reviewing your affiliate program, to see if repeating customers often come though selected affiliates. If they do, you can use this to inform your customer understanding and you can proactively target customers through those sites they are already visiting.
- Use your social media advertising to highlight those posts that have received lots of engagement.
- Earned Media
- Maximise the value of your earned media when retaining customers. Use your press mentions, blogger/ influencer mentions and customer reviews on your website, emails and through social media to reinforce to each customer segment why they should remain loyal to you.
Monitoring and Measuring Effectiveness
- A digital marketing plan designed to retain customers must be monitored against its objectives from the outset to achieve full potential. Use your site analytics and customer feedback to inform yourself.
- As part of your objectives, show what success is by defining KPIs that measure effectiveness.
- If the tactics are not performing as well as you had planned, try some alternative testing with different email subject lines, a new type of content or promoting it in a different channel.
In summary, when developing a digital marketing plan to increase retention rates; first understand your customers, then define your objectives, develop a tactical plan, and monitor and refine to deliver success. If you’d like help retaining your valuable customers, contact us at Brandbalm Marketing.