“Retention marketing” is the latest term that you’ve started hearing wherever you go. This may make you curious: is this just another buzzword, or the future of your business? And just what is retention marketing anyway? Retention marketing is a marketing tactic to keep your customers loyal to your store for more services or purchases. Studies show that returning customers convert 73% more than new visitors. That’s why another goal of retention marketing is finding ways to continue engaging current customers with the right product or service at the right time. The purpose of this article is to help you unpack the meaning of retention marketing and give you a foundation of why you need to incorporate it into your marketing plan.
Historically, most businesses have focused their attention on acquisition marketing. This is the form of marketing in which you concentrate most of your attention on bringing in new customers to the store.
Because of this, acquisition marketing and retention marketing have a symbiotic relationship: you can’t retain what you don’t have, so your business must ideally focus on both forms of marketing in order to succeed.
What is Retention Marketing: Examples and Strategies
Now, you know how retention marketing works. However, it’s important to understand some of the specific ways that these retention marketing strategies are currently being used.
One simple retention marketing example is to call your most valued customers. They will appreciate that your company took the time to reach out to them on a personal level, and you can use this time to mention special offers or discounts they can use. Certain forms of social media can do the same thing, as this allows you to quickly establish communications (and re-establish a relationship) with your best customers. And both of these strategies work best in conjunction with a CRM that allows you to quantify and keep track of the customers you need to contact.
Perhaps the best retention marketing strategy, though, is email. Emails can still be targeted towards your most valued customers, and they are highly dynamic: it’s easy to include everything from eye-catching imagery to coupons for them to print out or use online, increasing the odds that they come shops again. Using email as a retention marketing strategy is also highly cost-effective, allowing you to fit this technique into any marketing budget.
Why Customer Retention is Vital
Now you have an answer to the basic question of “what is retention marketing?” Now there’s another question: why should you focus your time, money, and other resources on retention strategies?
One blunt reason to pursue retention marketing is that digital marketing avenues like social media and Adwords are becoming much more expensive than they were before. Businesses with small budgets need to find better ways of getting old customers to return rather than bleeding money to draw in new customers.
And like we said before, embracing retention marketing doesn’t mean abandoning acquisition marketing. This is really about getting the perfect “bang for your buck” in terms of not just recruiting new customers but helping to ensure each customer becomes a return customer.
By pursuing retention marketing, you can help your business thrive. This is, in part, due to just how affordable retention marketing can be!
Customer Acquisition Costs More than Customer Retention
It’s an open secret that you have to spend a lot of money to bring in even one new customer. Thus, a savvy business should always be on the lookout for ways to maximize profits without breaking the bank.
Here’s some eye-opening research for you: it costs seven times as much money to attract a new customer than it does to retain an old one. In this way, a good retention strategy boosts your bottom line in two distinct way: it adds profit while diminishing the overall marketing costs of your business.
You don’t have to have a mathematics Ph.D. to figure this out. As a company, I must decide whether I want to spend ten dollars to retain an old customer or spend seventy dollars to recruit a new customer. The math on this is simple, and I’m poised to save a lot of money as the affected customers start adding up.
As we said earlier, you cannot cease acquisition marketing or your retention marketing will have no one to retain. But by finding the right balance between these two different marketing strategies, you can stretch your marketing dollars further than ever before.
Returning Customers Spend More
A business will rise or fall based on how well it is able to convert customers. There are plenty of complex strategies out there for how you can convert your customers. But what if you could get a lot of mileage out of sticking to the basics?
Recent research shows that customers are nine times likelier to convert after they had converted one time before. Which makes a lot of sense, really: your company has now established a relationship between yourself and the customer, and you’ve had a chance to demonstrate your value to them. If you’re still wondering “what is retention marketing,” here’s a possible answer: job security!
This, again, is why retention marketing is so critically important. If you focus only on funding acquisition marketing, you’re spending a lot of money for an uncertain ROI. By focusing on making your previous customers come back, you’ve got really good odds of them spending much more money.
Why You Need a Retention Marketing Strategy
You started out with a simple question: “what is retention marketing?” Now, you know a bit more about what this is and how it works. But you’re still left with a fundamental question: how can your company particularly benefit from a retention marketing strategy?
So far, we’ve covered some of the major benefits of retention marketing. It costs less than acquisition marketing and offers a better ROI. Fortunately for you and your business, the benefits don’t stop there.
For instance, retention marketing naturally boosts brand loyalty, builds relationships and creates better sales leads. In a time when most companies take their customers for granted, retention marketing is your way to show that you value each and every customer.
Another benefit is that retention marketing strategies scale very easily. You can afford to start small, but trust us: when you start seeing major results, you’ll want to focus even more time and energy on this strategy.
And this is retention marketing in a nutshell: it is both affordable and accessible, and it offers a far more tangible benefit to your company’s success than almost any other strategy.
Hire a Professional
By now, you have a definitive answer to the question “what is retention marketing?” But you may be left with one more fundamental question: “who can help me get started?”
Retention marketing strategies are the lifeblood of your company. However, it can be fairly tricky to get started. And, if we’re being honest, it can be fairly easy for someone new to retention marketing to need guidance.
So, how can you enjoy the benefits of retention marketing without having to worry about wasting time and money? The answer is simple: hire a professional.
MicroD is a company that has been pioneering customer service and technological solutions for over twenty-five years. We are the premier authority on the intersection of technology, service, and profit. In order for your company to get the absolute most out of retention marketing contact MicroD!