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4 Effective Retention Marketing Strategies To Win Your Customers’ Loyalty

Retention Marketing
Retention Marketing
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Welcome to WebEngage! You’re now one step closer to becoming a Retention champion! Please press play to listen to the audio version of the blog.

Did you know 75% of your loyal customers are prone to recommend your brand to friends and family? For any size business, there are three essential goals – sales, customers, and leads. You need to take care of your customers to build and successfully run your business. Read along to find out hand-picked retention marketing strategies to win your customers’ loyalty!

Too many businesses underestimate the importance of customer loyalty. Loyal customers help your business grow, expand, and tap into new markets. Moreover, customer loyalty also helps you with customer retention and acquisition. In addition to this, it improves your brand’s image and helps you generate higher returns.

This is why you must focus on retention marketing strategies to win the trust of your customers and turn them into loyal customers.

What is customer retention?

Customer retention encapsulates a company’s deliberate strategies and actions to engage customers in a meaningful, ongoing interaction. It’s not just about maintaining the status quo; it’s about actively enhancing the customer experience at every touchpoint. This involves understanding and responding to customer needs and preferences, personalizing their experiences, and continually delivering value that exceeds their expectations. Effective customer retention strategies transform casual buyers into loyal advocates, creating a community around your brand.

Why is customer retention important?

Emphasizing customer retention offers a plethora of benefits that go beyond simple cost savings. Here’s a deeper look:

  • Cost Efficiency: Acquiring new customers can be five times more expensive than retaining existing ones. By investing in marketing retention strategies, businesses can optimize their marketing and sales expenditures, allocate resources more effectively, and increase their ROI.
  • Increased Profitability: According to research, increasing customer retention rates by just 5% can boost profits by 25% to 95%. Loyal customers often purchase more frequently and are more inclined to try new offerings. They also tend to buy with less price sensitivity, which is especially valuable in competitive markets.
  • Valuable Feedback: Retained customers provide continuous feedback, which can be a goldmine for insights. This ongoing dialogue helps businesses fine-tune their products and services, adjust customer retention marketing tactics, and make smarter decisions that align with customer expectations.
  • Free Word-of-Mouth Marketing: Satisfied customers are likely to share their positive experiences with friends, family, and colleagues, as well as through social media and online reviews. This organic word-of-mouth marketing is incredibly effective and comes at no additional cost to the business.
  • Resilience Against Competition: In a crowded market, having a loyal customer base gives your business a competitive edge. These customers are less likely to switch to competitors, providing a stable revenue stream and allowing you to focus on innovation rather than defensive marketing.

By viewing customer retention as an opportunity to continually engage and satisfy your customers, businesses can create a virtuous cycle that enhances customer loyalty retention and drives sustainable growth. It’s a proactive strategy that retains customers and turns them into valuable partners in your brand’s ongoing journey.

So, let’s look at four of the most effective and powerful strategies to win your customer’s loyalty. Let’s dive in!
1. Provide excellent customer support
2. Engage strongly with your customers
3. Streamline your customer experience
4. Personalize your communication
5. Collect Feedback with Customer Surveys
6. Don’t Just Sell — Educate
7. Offer Fast Delivery and Easy Returns
8. Use Subscriptions to Keep Customers Coming Back
9. Build Your Customer Loyalty Programs the Right Way
10. Reward Your Loyal Advocates
11. Treat Customers As Humans, Not Data
12. Build a Customer Profile
13. Provide “Buy Now, Pay Later” Options

1. Provide excellent customer support

Did you know that 58% of American consumers are willing to pay more for better customer service? Furthermore, poor customer service drives away 78% of customers, and nearly half (67%) of consumers have switched brands due to lousy customer service within the past year.

Did you know that 60% Americans are willing to pay more if the brand provides customer support? So, if you want to win customer loyalty, you must provide good customer service. That will encourage your customers to stay with you for a longer amount of time. And, poor customer service will drive away 23.5% people. As a result, your customers might even switch to a different brand.

Zappos has mastered providing excellent customer service. For instance, they helped a couple get back their expensive jewelry. The husband mistakenly packed it in one of the boxes to be returned to Zappos. After learning this, the representative handling the case tracked down the box. And helped the couple by delivering it personally.

Moreover, brands can also use social media to provide exceptional customer service. Starbucks is one of the best examples. They leverage the power of social media and are known for their prompt responses.

They invite their customers to ask the brand any questions or doubts about stores, contests, or products. As shown below, they always ensure to reply to their customers immediately.

Customer Support With WebEngageImage Source – Twitter

2. Engage strongly with your customers

If you want your customers to be loyal to your brand, you need to increase your user engagement rate. You need to think of ‘out-of-the-box’ ideas to create engaging content for them. However, there is no one single way to engage with your customers.

JustFab, a clothing brand from the UK, organizes a giveaway to engage with their customers. The winners get to enjoy the incredible sights from the South of France for three nights. The post on Instagram includes the steps consumers need to follow to enter the contest, and when the winners will be announced.

Engage With Customers | WebEngageImage Source – Instagram

Offer special promotions

One of the best ways to increase customer loyalty is by offering real value for their money. You can organize special promotions or discounts and enable your customers to get high-quality products at discounted prices.

In addition to this, you can also provide discount vouchers. 67% of consumers change their shopping behavior based on discounts, and 61% state they would be loyal to a brand if they could use discounts and coupons.

As of 2023, offering a discount to first-time customers can be a highly effective strategy. According to Shopify, many top-performing brands offer new shoppers a discount, often between 10% and 20%, to encourage their first purchase and to improve the chances of a return visit.

Furthermore, research from Annex Cloud highlights that customers who return for a second purchase are 54% more likely to become repeat customers, significantly increasing their lifetime value to the business.

This tactic will not only help you win customer loyalty but will also help you with customer retention.

Uber is a perfect example. They offer exclusive deals to their customers to increase their loyalty.

Promotions To Customers With WebEngageImage Source – Frequent Miler

Similarly, Pottery Barn Kids provides exciting offers to its customers.

Promotions To Customers With WebEngage -1Image Source – Pottery Barn Kids

3. Streamline your customer experience

  • Use gamification

Gamification of customer experience can be difficult to pull off, but it is worth it in the end. Consider introducing a sense of progression whenever a customer interacts with your brand. This way, you can tap into that primal part of the human brain that thrives on the feeling of instant gratification.

Award badges or special promotions to customers who achieve a certain milestone or complete a particular task while using your product. The video gaming industry is already known for employing such a concept.

But you can expand the concept to work for your brand as well. Companies like Fitbit have achieved good success by introducing similar aspects to their products.

Fitbit Badges | WebEngageImage via Develop Good Habits

  • Pace up the end-to-end process

Depending on how your business operates, this could require a lot of time and effort. The key here is to reduce the number of steps needed to complete a transaction from start to finish. That includes everything from the first time you catch a customer’s eye to the post-sale service.

Regardless of whether you’re a brick and mortar business or an e-Commerce one, streamlining your customer journey is the way to go. Each extra step in the journey increases the chances of your customers walking away. Eg: Reducing the steps involved in the check out process while making a transaction on any online portal.

So, how do you go about it then? One emerging trend is relying on automated CRM tools. They’re capable of organizing your entire sales process and making engaging your leads and customers easier. But the biggest benefit is how well it helps you manage your relationship-building activities.

Salesmate Dashboard | WebEngageImage via Salesmate

Fast food giants like McDonald’s have attempted to improve the sales process with the addition of self-service ordering kiosks. This allows them to drastically cut ordering wait times without increasing their staffing requirements.

When it comes to online shopping, platforms such as Amazon introduced features like 1-click ordering. This allows existing customers to purchase items with a single click. It’s facilitated by using the billing, delivery, and payment information that was already linked to their respective accounts.

Click Option | WebEngageImage via Amazon

4. Personalize your communication

Personalized communication with customers is an efficient methodology to win customer loyalty. Numerous promoting automation tools such as WebEngage or braze will facilitate brands during this process.

Marketing automation becomes more effective if brands focus on these three aspects:

  1. Verified Data: Collection of the customer’s data from verified sources which leads brands to correct understanding of their customers’ behavior.
  2. The right way of communication: Brands can choose the appropriate methods for each customer so they can provide a more personal feel.
  3. CreativIty: Delivery of message should be in a non-robotic way which generates a great feeling among the customers.

Ulta Beauty is a brand that goes the extra mile to surprise their loyal customers with gifts on their birthdays.

5. Collect Feedback with Customer Surveys

Gathering feedback from customers through surveys is essential for understanding their needs and improving your services. Amazon frequently uses post-purchase surveys to gather customer feedback on their delivery and product experiences, enabling them to make data-driven improvements. According to Qualtrics, companies that measure customer feedback experience a 10-15% increase in customer loyalty retention rates. This strategy helps identify areas where your business can enhance customer satisfaction and loyalty.

Collect Feedback with Customer Surveys

6. Don’t Just Sell — Educate

Providing educational content can help build trust and loyalty among customers. Home Depot offers DIY workshops and online tutorials that educate their customers, which helps build a loyal customer base. According to the Content Marketing Institute, 78% of consumers are likely to trust a company that provides content relevant to their interests and needs. This makes educational content a key component of effective customer retention marketing strategies.

7.Offer Fast Delivery and Easy Returns

Providing educational content can help build trust and loyalty among customers. Home Depot offers DIY workshops and online tutorials that educate their customers, which helps build a loyal customer base. According to the Content Marketing Institute, 78% of consumers are likely to trust a company that provides content relevant to their interests and needs. This makes educational content a key component of effective customer retention marketing strategies.

Offer Fast Delivery and Easy Returns

8.Use Subscriptions to Keep Customers Coming Back

Subscription services can create a steady revenue stream and enhance customer retention by offering convenience and consistent value. Dollar Shave Club’s subscription model keeps customers returning for grooming products, reducing the need for repeat sales efforts. According to the Subscription Trade Association, subscription-based businesses grow revenue 5.5 times faster than S&P 500 companies. Providing a subscription option makes it easy for customers to maintain a continuous relationship with your brand.

Use Subscriptions to Keep Customers Coming Back

9.Build Your Customer Loyalty Programs the Right Way

Effective loyalty programs reward customers for their repeat business, encouraging them to stick with your brand over competitors. Starbucks Rewards program offers customers points for every purchase, which can be redeemed for free drinks and food items. As of the latest data, 71% of consumers are more likely to trust a company that provides them with content relevant to their interests and needs, according to the Content Marketing Institute. A well-designed loyalty program can significantly boost customer retention by providing ongoing incentives for customers to return.

Build Your Customer Loyalty Programs the Right Way

10.Reward Your Loyal Advocates

Recognize and reward your most loyal customers who advocate for your brand through exclusive discounts, early access to products, or public recognition. Sephora’s Beauty Insider program offers exclusive benefits and early access to sales for their top-tier members, encouraging continued loyalty and advocacy. Companies with strong advocacy programs grow revenues faster and retain customers better. Rewarding your advocates not only fosters loyalty but also turns them into powerful brand ambassadors.

Reward Your Loyal Advocates

11.Treat Customers As Humans, Not Data

Personalizing interactions by treating customers as individuals rather than data points can significantly enhance their experience and loyalty. Chewy sends personalized handwritten notes and holiday cards to customers, creating a personal connection and fostering loyalty. Inc.com highlights that 68% of customers say they are more likely to be loyal to a brand that treats them like an individual rather than just another number. Humanizing customer interactions can lead to deeper emotional connections and increased customer loyalty retention.

Treat Customers As Humans, Not Data

12. Build a Customer Profile

Creating detailed profiles of your customers helps tailor your marketing efforts to meet their specific needs and preferences, improving retention rates. Netflix uses sophisticated algorithms to build customer profiles and recommend content that aligns with their viewing habits, keeping users engaged. Companies that utilize customer profiling see a 36% increase in customer satisfaction. By understanding your customers on a deeper level, you can provide more personalized and relevant experiences.

Build a Customer Profile

13. Provide “Buy Now, Pay Later” Options

Offering flexible payment options can make it easier for customers to make purchases, increasing their likelihood of returning. Klarna provides “Buy Now, Pay Later” options for many retailers, making it easier for customers to afford larger purchases and improving customer loyalty. According to Klarna, 45% of shoppers say that flexible payment options increase their likelihood of making a purchase. Providing payment flexibility can remove financial barriers and encourage repeat business.

Provide “Buy Now, Pay Later” Options

Final thoughts

The best part of these customer loyalty strategies is that they are effective for small startups and big Fortune 500 companies. However, you need to keep in mind that these strategies cannot generate the desired results overnight. As with any marketing strategies like building links or creating a new content marketing campaign, you’ll need to be patient to see any visible impact.

Do you know any other super effective strategies to win customer loyalty? If so, please feel free to share your ideas in the comments.

Bonus Read: See How Chaayos, An Offline Cafe Chain, Improved Its Customer Retention

FAQs

What are customer retention strategies?

Customer retention strategies are methods and practices businesses use to keep their existing customers engaged and satisfied, encouraging them to continue purchasing products or services. Effective strategies include providing excellent customer support, offering personalized communication, creating loyalty programs, ensuring fast delivery and easy returns, using customer feedback to make improvements, and offering flexible payment options. These strategies help businesses build long-term relationships with customers, increasing customer loyalty and lifetime value.

How do you measure your customer retention rate?

Customer retention rate is measured by calculating the percentage of customers who continue to do business with a company over a specific period. The formula to calculate the customer retention rate is:

(Number of Customers at Start of Period – Number of New Customers Acquired During Period / Number of Customers at End of Period​)×100

This metric helps businesses understand how well they retain their customers and identify areas for improvement in their retention strategies.

What are the five key factors of customer retention?

1. Customer Satisfaction: Ensuring customers are happy with their purchases and overall experience.
2. Customer Engagement: Keeping customers engaged with relevant and personalized communication.
3. Customer Service: Providing excellent and responsive customer support.
4. Loyalty Programs: Offering rewards and incentives for repeat business.
5. Convenience: Making it easy for customers to purchase and return products and access support.

What are the benefits of a customer retention strategy?

The benefits of a customer retention strategy include:

Increased Customer Loyalty: Retained customers are more likely to make repeat purchases.
Higher Lifetime Value: Loyal customers tend to spend more over their lifetime.
Reduced Marketing Costs: Retaining existing customers is cheaper than acquiring new ones.
Positive Word-of-mouth: Satisfied customers are more likely to recommend the brand to others.
Improved Business Reputation: Consistently meeting customer needs enhances the brand’s reputation.

What are the disadvantages of customer retention?

While customer retention has many benefits, there are also some potential disadvantages:

Cost: Implementing effective retention strategies can be costly and resource-intensive.
Complacency: Businesses might focus too much on retaining current customers and neglect efforts to attract new ones.
Market Changes: Relying heavily on existing customers can be risky if market conditions change and those customers’ needs evolve.
Limited Growth: Excessive focus on retention might limit opportunities for expanding the customer base.

Author

Founder, 

Contensify

Vanhishikha Bhargava is an E-commerce expert and B2B marketer. Working with E-commerce-focused products that aim at making customer acquisition, engagement and retention more data-backed, she’s always on the lookout for growth tactics that help online stores increase their sales and revenue. You can follow her blog here.

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