What is retention?
Retention in marketing is the process of converting a single-time customer into a returning, and eventually, loyal customer. This is an important concept for businesses to understand because it emphasizes building relationships with customers and providing them with value so that they’ll keep coming back.
Generally, retaining customers is much more cost effective than constantly acquiring new ones.
Why is retention important?
Retention in marketing is important because it helps businesses build relationships with customers and encourages them to keep coming back. Having a loyal customer base means that businesses don’t have to invest as much in acquiring new customers, and instead, focus on engaging and driving purchases from their existing customers, which is more cost-effective. Retaining customers also fosters brand loyalty and helps businesses maximize long-term sales and revenue.
What does the research say?
Studies have shown that retention marketing can increase customer loyalty, reduce churn rates, and improve overall customer satisfaction.
One study conducted by the Harvard Business Review found that increasing customer retention rates by 5% can lead to a 25-95% increase in profits.
Another study by eConsultancy found that 82% of marketers agree acquisition is more costly than retention.
When acquiring a new customer is 8x more expensive than retaining an old one, the importance of customer retention in marketing is clear.
How to build a customer retention strategy
A successful customer retention strategy should focus on creating a positive experience for customers and keeping them engaged over time. Here are some key steps to help build a successful customer retention strategy:
Set Clear Goals– Establish measurable goals for your retention strategy, such as reducing churn rates or increasing customer satisfaction levels.
Collect Data– Gather data about your customers’ behavior, preferences, and interests to gain insights into their wants and needs.
Create Personalized Engagements– Create personalized experiences tailored to each customer’s individual needs and interests.
Utilize Automation– Use email automations to power abandoned cart, back in stock, and winback campaigns to keep customers returning to shop.
Implement Loyalty Programs– Offer rewards, discounts, or unique value-adding experiences that incentivize repeat purchases and build brand loyalty with customers.
>Monitor Performance & Optimize Strategy– Measure the success of your retention strategies in order to see which approaches are working best, and optimize accordingly if required.
Retention with Emarsys
Emarsys helps leading brands like PUMA, Pizza Hut, and Nike to drive retention and make every interaction impactful by automating customer lifecycle marketing across all channels.