Table of Contents:
- Creating and Nurturing Brand Loyalty
- Gathering and Analyzing Data
- Increase Lifetime Value and Retention
If you run your own business, you know it’s essential to focus on acquiring new customers and keeping existing ones. The type of customer you focus on depends on where you are in your business journey and your budget, but both should always be on your mind.
Did you know it’s six to seven times more expensive to acquire new customers than to retain them? Plus, brand-new customers don’t have the loyalty that existing customers might, so you could spend a ton of money on new customers without seeing a net positive result.
In an economy where customers are spoiled for choice and picky about which companies they spend their money with, it’s harder than ever to grab their attention — and keep it. So once you acquire new customers, it’s in your best interest to focus on making them loyal customers instead of grabbing as much market share as possible. The stats don’t lie: a five percent increase in customer retention has the potential to positively impact revenue by 25–95%. Awesome, right!
How do you improve customer retention, you ask? Let’s walk through the value of data and loyalty when it comes to retention — and a few strategies you can implement right now.
Brand Loyalty Is More Important — and Fragile — Than Ever
Brand loyalty is rapidly becoming less of a concern for consumers. Nearly 40% of US consumers tried new brands or products because of nonexistent stock or smaller budgets, and many are looking for more value with less spending.
Because of this, it’s rare for consumers to feel loyal to a brand — and even rarer for them to remain loyal through thick and thin. Any business with loyal customers in today’s economy should hold on to them as long as possible.
Creating and nurturing brand loyalty is a cross-functional effort. While customer success teams typically hold much responsibility for this, marketing is just as responsible. The two teams can work together to make the customer experience as frictionless as possible; the easier it is to do business with you, and the greater the value of your product, the more loyal customers will be.
Acquiring and retaining new customers isn’t just an internal effort — it’s an external one, too. One of the most significant ways customers show that loyalty? Referrals! Brand advocates can act as an extended arm to your marketing team, promoting your business to their audience and generating new revenue for zero additional cost.
It’s All About That Data
Let’s put it this way: If you have a website and have sold products, you’ve got plenty of first-party customer data to play with. By taking a look at your website and eCommerce platform, you can gather data like:
- Average order value (AOV)
- Purchase frequency, both one-time and subscription
- Types of products purchased
- Number of single product purchases
- Region or geographic location
- Website behavior
- Abandoned cart rates and reasons
By analyzing that data, you can segment your customers into granular audiences based on that information, depending on the type of campaign you want to run.
With those segments, you can begin to create messaging, creative, special offers, and more when building and optimizing your retention strategies and campaigns. Plus, using a tool like Postie to gather your data, you’ll take advantage of multiple data sets and models. Postie uses three data sets, each with unique features and strengths, providing your business with better, more varied data to work from.
Increase Lifetime Value and Retention With an Omnichannel Approach
Now that you know the importance of loyalty and data, it’s time to get to the good stuff: actionable retention strategies. Here are three of our favorites for increasing lifetime value and retention rates.
1. Combine the power of analog and digital channels.
Remember when emails were new and exciting? Their appeal made consumers more interested in looking in engaging with them, and physical mail was considered a nuisance. The exact opposite is now true: All email is viewed as spammy and mostly ignored, while direct mail pieces grab the most attention because they’re so unexpected.
Even though channels like email are viewed in a more negative light now, they still see results. However, a combination of analog and digital channels does a way better job of reminding consumers of a great deal or following up on a purchase or interaction. If you find yourself stuck and unable to create unique, eye-catching ideas, consider how you can combine the physical and the digital.
2. Use digital signals to automatically trigger a personalized direct mail piece.
Digital signals like purchase recency, lapsed purchase recency, frequency, email unsubscribes, and cart abandonment can trigger many actions. Most businesses use these actions to trigger reminder emails, targeted ads, and even direct follow-up from customer support through email or phone calls — but not many brands think to include a direct mail piece.
Remember what we said earlier: Physical mail is unexpected, so use that to your advantage. If it’s been a while since a customer has purchased from you, send them a direct mail piece asking them to come back and providing an incentive to do so. If they unsubscribed from your email newsletter, drop something in the mail to see if they’d prefer physical mail.
3. Don’t shy away from using direct mail campaigns on their own.
Direct mail campaigns dominate other customer retention strategies, and here’s why:
- After receiving direct mail, three out of four consumers can recall a company or brand.
- The average lifespan of direct mail is 17 days.
- Conversion rates are higher.
- Lift is higher.
- Return on advertising spend (ROAS) is higher.
Although it’s one of the older marketing channels in the playbook, the world has become so digital-first that it’s easy to stand out by using direct mail, so take advantage of that novelty for any campaign you might be cooking up.
Postie’s digital direct mail platform supports CRM strategies with data segmentation, campaign orchestration, and more — all purpose-built to better connect with customers and increase their lifetime value for brands. For more information on improving customer retention and growing your loyal customer base, check out Postie and sign up for a demo today!
