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Why Retention Marketing Is Your Brand’s Foundation

July 2021


Of all the marketing strategies that e-commerce brands use, few are more important than retention marketing. In fact, research from Harvard Business Review found that a five percent increase in customer retention could increase profitability by 25 to 95 percent. Those numbers are just as true for e-Commerce brands as for brick and mortar retailers; showcasing the need for retention marketing to be a top priority for every online seller.

What Makes Retention Marketing So Important?

Your most loyal customers are the foundation that sets your brand up for long-term success. Simply, it’s easier to sell to someone who already trusts your brand and products than to someone who has never heard of you before. Because of this, retention marketing tends to be far more cost-effective than other marketing efforts. Dollar for dollar, you’re more likely to sell through retention marketing, because you’re selling to people who already purchased before. The overarching goal of retention marketing is to increase the lifetime value of each customer. This increases ROI of your marketing strategies that you used to acquire those customers in the first place. Retention rates are also sometimes looked at in a more negative term, “churn rate”, but this should mean something positive for your brand.

In an interview with the Harvard Business Review, Jill Avery of the Harvard Business School explains, “If I’m interested in keeping customers, I’m interested in understanding how many leave and the underlying reasons why they are ending their relationship with me. Looking at churn rates illuminates which types of customers are at risk and which may require an intervention. It’s a simple metric that tells us about when and how to interact with customers”. By making an effort to understand your churn rate, you can identify areas where your e-Commerce brand is falling short.

A Statista survey revealed that fast shipping, an easy returns process, and a personalized shopping experience were top reasons for customers to do repeat business with an e-Commerce brand. Analyzing your retention data can help you identify customer profiles need focus in your marketing efforts. Ultimately, guiding your brand to incorporate key changes that would increase customer satisfaction.

Successful eCommerce Retention Marketing Strategies

E-Commerce retention is greatly dependent on providing an excellent customer experience the first time around. This initial experience is crucial for your brand and its ability to effectively re-market to individuals who’ve already purchased. Having a strong, memorable brand will make it easier for customers to form meaningful connections with your brand. Leaving them buying from you time and time again. Of course, most customers are going to need a little nudge to keep doing business with you. Fortunately, there are many avenues for reaching out with creative email and sms marketing. Emails and social media tend to be the go-to retention marketing options for many eCommerce brands. After all, you need to collect customers’ email addresses during checkout anyway. Simple e-commerce integrations in checkout experience is a great way to get your marketing into their inbox.

As well, loyalty programs and subscription services are e-commerce integration that are proven to increase retention rates. Customers who join brand loyalty programs tend to spend far more than others. In fact, a Bloomberg study of Amazon Prime members found that Prime members spend twice as much as other Amazon customers. Such programs provide value-laden perks for continuing to shop with your e-Commerce brand, serving as a great way to drive revenue.

Retention Marketing for New Clients

Not all of your retention marketing should be focused on people who’ve already purchased. Cart abandonment is a huge issue for online retailers. The Baymard Institute estimates the average online cart abandonment rate to be 69.57 percent. This is where creative strategies make the difference like those used by apparel brand rag & bone. Rag & bone’s eCommerce site sends pop-up messages after abandoning your cart, saying that your cart has been saved, but that the items are going fast. Not only does this make it easy to return to the checkout process, it creates a sense of urgency for potential buyers.

That is just one great tactic for retention marketing, but tools like Facebook Pixel also exist and allow you to re-market to anyone who has visited your website, while also segmenting audiences based on specific actions they took while on-site. Making it easy to get retention effort to the customers who have already made a purchase, as well as those who have abandoned their shopping cart. 

Finally, don’t underestimate the power of your current customers in growing your customer base as a whole. Many loyalty programs offer additional rewards for new customer referrals. When loyal customers are incentivized to share your products with others, they can quickly become your biggest advocates. This word of mouth marketing tends to be far more cost-effective and natural growth oriented. Best of all, it means your loyal customers are sharing your products with their like-minded friends.

It’s Good to Add New Customers, It’s Better to Retain Them

Not everyone you try to reach with your retention marketing strategies is going to become a repeat customer, and that’s okay. As long as you are making consistent outreach to your current customers and prospects, you will be more likely to increase the average lifetime value of your customer base as a whole. With more profits from your existing customers, you will be in the perfect position for additional scaling opportunities. Ultimately, retention marketing can become the launchpad for lasting long-term growth of your eCommerce brand.

Image credited to firmbee via unsplash


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