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Almost everyone has certain places that they visit again and again in their everyday lives. Be it the regular pub, the regular café, the favorite supermarket or the movie theater with the comfortable seats: Despite great competition, there seem to be individual arguments for visiting these establishments. Such a place could also become your online store!
With sophisticated retention marketing, Twist & Schirm helps you achieve better customer retention and existing customers who keep coming back to your offer despite alternatives from the same industry. In this article, we explain what constitutes successful retention marketing and which measures contribute to a higher customer retention rate.Retention marketing: definition & advantages for online stores
The topic of marketing is often viewed quite one-sidedly in e-commerce. First and foremost, it involves extensive target group analysis and the selection of the right channels that are suitable for acquiring new customers. These marketing measures involve a great deal of money, time and know-how, but completely ignore existing customers. It is often not only easier, but also more profitable for online stores to focus more on converting one-time customers into existing customers. This is exactly the task that Retention Marketing deals with. We will show you the main goals, which are equally advantages of retention marketing, in the following.Increase the repurchase rate
The repurchase rate is an indicator that describes how many of 100 customers have not only made a purchase from your company once, but several times. If you compare previous measurements with the current status, you can see the extent to which your customer loyalty marketing has been effective.
It also makes sense to time the calculation of the repeat purchase rate. For example, it is possible to calculate how many new customers from 2022 became repeat buyers in 2023. For consumer products, this interval can also be reduced to months or even weeks.Lower churn rate
The churn or turnover rate is another KPI that is frequently used in HR management. But it is also relevant for customer acquisition and customer retention. The churn rate describes exactly the opposite value to the repurchase rate and should therefore be reduced. The churn rate shows how high the percentage of customers is who, after making a purchase, have not bought again within a certain period of time but have turned their backs on your company. With the right retention marketing measures, this figure can be reduced quite easily. Twist & Schirm will be happy to help you with this!
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Brand awareness through recommendations
Even though retention marketing is first and foremost about maintaining and retaining existing customers, the effects are also relevant for new customer acquisition. This is because satisfied and loyal regular customers recommend your company and your brand to their closest circle. In this way, they ensure greater brand awareness - in some cases even among target groups that would not have been reached by your own marketing measures for customer acquisition.Better cost-benefit ratio
As already mentioned, retention marketing measures are much easier and less expensive to implement. Since high investments may already have been made in the past to acquire new customers, these should not be put to waste by a lack of or inadequate retention marketing. A study by Harvard University in collaboration with Bain & Company showed that a company's sales could increase by 95 percent in the long term if the customer retention rate in the company increased by just 5 percent.More personal customer relationships
The fact that you can build a more personal relationship with regular customers is obvious. But what are the benefits of loyal customer relationships? In addition to pure customer data, you get to know your target group on a very personal basis. You perceive how your customer base lives and thinks, what their preferences and buying patterns are, and whether their decisions are more emotional or rational. You can incorporate this knowledge into your marketing measures in a very targeted manner. In addition, personal customer contact makes it easier to identify and correct weaknesses in your service or products. This in turn ensures trust, higher customer satisfaction and repeat purchases. You can find out how to strengthen customer relationships and which customer retention strategy you can use to ensure a higher customer retention rate in a personal conversation with Twist & Schirm, your performance marketing agency in the field of e-commerce.FAQs
What is Retention Marketing?
The term retention means something like "keeping". And this is exactly what retention marketing is all about: a corresponding marketing strategy aims to bind customers who have already interacted with you to your company. By continuously yet unobtrusively reappearing in personalized emails and ads, you stay in people's minds and strengthen customer relationships.
Why is retention marketing important for any business?
Retention marketing is an extremely important means of contributing to a company's success. On the one hand, customers who are convinced by your offer will choose your products or services again and again, thus ensuring long-term sales. Because this requires significantly less investment than acquiring new customers, retention marketing is extremely profitable.
Retention marketing also improves the reputation and awareness of your company in the long term, as satisfied existing customers are more likely to rate your offering positively and recommend it to others in their vicinity. The result is better online ratings, which in turn lead to more new customers and leads.
What do you need for successful retention marketing?
In many companies, there are marketers who take care of new customer acquisition. They have in-depth knowledge of the demographic data of your target group, know suitable channels for acquiring new customers, and know how to prepare attractive marketing measures for social media, SEA, and SEO.
Although all the prerequisites are met, existing customer care and customer satisfaction are often left out of the equation. Yet the same CRM (customer relationship management) systems that marketers use to acquire new customers could also be used to strengthen customer loyalty.
Since existing customers make an enormous contribution to the company's success, your experienced performance marketing agency Twist & Schirm will work with you to develop a retention marketing strategy that addresses one-time customers individually and turns them into regular customers in the future.
Which measures are suitable for improving customer retention?
In order to bind customers to your company and turn them into loyal repeat customers, they should be approached on a personal level. Since you already have customer data such as e-mail address and address through the one-time purchase and can already assess possible interests and preferences, retention marketing is conceivably simple.
Email marketing plays a major role in this. Because in addition to newsletters, you can send personalized product suggestions, shopping cart reminders, rating options, and much more at lightning speed to stay in customers' minds. Playing out customized campaign ads is also easily achievable through appropriate CRM programs and often more successful due to past purchases. Twist & Schirm will be happy to help you put appropriate measures into practice.
Besides personalized emails, you can also convince your customers with attractive benefits to achieve repeat purchases. Examples are vouchers, loyalty discounts and stamp cards. However, to ensure that a customer doesn't just buy from you because of discounted products, you should of course also maintain a corresponding standard for your service and the quality of your offering. This is how you strengthen customer loyalty and turn one-time customers into loyal retention marketing regulars.
Which KPIs can be used to measure retention marketing success?
Various key performance indicators (KPIs) are suitable for assessing customer loyalty and the success of retention marketing.
Customer lifetime value is particularly relevant in this context. This KPI can be translated as "customer lifetime value", although the English term better reflects the meaning. It is about how high the value of a customer currently is and how high it is estimated to be over the course of the customer relationship or "customer lifetime". Existing customers have a higher customer lifetime value and profitability than customers who only make one or two purchases from the company.
We have already explained the repurchase rate and the opposite KPI, the churn rate. These indicators are used to measure the success of retention marketing and to analyze whether goals have been achieved through personalized advertising, e-mail marketing, and other marketing measures to improve customer retention.
To measure customer satisfaction and the relationship with your clientele, in addition to KPIs, the evaluation of online reviews about your company are also suitable. To better engage customers with your business and deepen relationships, you can also ask for reviews. This makes it easy to improve your service, which also has a positive effect on the retention rate.
