Retention Marketing: Keep Your Customers Coming Back for More

Retention Marketing

Keep Your Customers Coming Back For More

Background

I have extensive experience launching and growing ecommerce email marketing programs across a wide variety of industries (apparel, cosmetics, home & furniture, baby gear, toys, pet food, security, hardware, etc.) and stores, ranging from mom-and-pop operations to Internet Retailer 500 brands.

My company, Essence of Email, specializes in email marketing for ecommerce shops.

 Contact Info: x@essenceofemail.com

Xiaohui “X” Wang

Acquisition vs. Retention – the case for more retention marketing

Costs 4x to 6x more to acquire a new customer than to retain an existing customer

Ecommerce spending is on average $24.50 for new customers and $52.50 for repeat customers

On average, online retailers lose 25% of their customers every year

A 2% increase in customer retention has the same effect as decreasing costs by 10%

Key Metric – Customer Lifetime Value

The key metric to focus on is Customer Lifetime Value (CLV)

To increase profitability, you need to increase CLV or decrease cost of acquisition (CAC)

CLV = Average order value * Frequency of purchases* Retention lifetime

This means there’s 3 ways to increase CLV: Increase average order value Increase frequency of purchases Increase retention lifetime

The Retention Marketing Formula

A Great Customer Experience + Effective Lifecycle Communication =

Customer Retention

Customer Experience

Elements of Customer Experience

Purchase Experience Support, shipping, returns, price

Brand Design, copy, personality/voice

Product Quality, durability, perceived value

Zappos – deliver WOW through service

Support

Shipping – always free shipping

Returns – 365 days, free return shipping

Brand Voice – Witty, conversational

Bonobos – a pair of pants to leading men’s clothing retailer

Support – Bonobos “ninjas”

Shipping – free shipping

Returns – 90/365 days, free return shipping

Design – beautiful design

Brand Voice – very clever copywriting

Product – still best known for the perfect pair of pants

Bonobos – a pair of pants to leading men’s clothing retailer

Lifecycle Communication

The Customer Lifecycle

Post-Purchase Period

Latent Period

Repurchase Period

Win-BackPeriod

Customer purchases

Post-Purchase Period

Immediately after the purchase

Order Confirmation Primarily focused on transaction information Category/product banners Product recommendations

Thank You Email Coupon on next purchase/sharing Social media or other brand engagement channels Secondary CTA’s to shop

Post-Purchase Period

Talbots Thank You Email

Zappos Order Confirmation

Post-Purchase Period

Awaiting shipping

Shipping Confirmation Product recommendations Loyalty program

Sharing Promote sharing – social, forward to friend

Manage Preferences Get more customer data for segmentation

Post-Purchase Period

MooseJaw Shipping Confirmation

Backcountry Create Profile Email

Post-Purchase Period

After product received

Product Review

Store Review/Survey

Recommended Accessories

Product Manuals

Post-Purchase Period

Kate Spade Survey Email

Sephora Product Review Email

Post-Purchase Period

Best Buy Accessories Rec

Latent Period

Regular email promotions Sitewide discounts, flash sales, shipping offers Content newsletters New products

Behavioral emails Cart abandonment Site browse abandonment

Latent Period

National Allergy Cart Abandonment Email

Lime Road Browse Abandonment Email

Repurchase Period

Re-order Reminder

Unique Offer

Product-based Recommendations Accessories New similar products Complimentary products

Repurchase Period

Discount Beauty Center Re-Order Email

Win-Back Period

Win-Back Series We’ve missed you Unique sweet offer + reminder Unsubscribe notice

Unsubscribe If still dormant after win-back series, then suppress

permanently or unsubscribe

Win-Back Period

L.L. Bean We’ve Missed You

ShoeBuy Win-Back Discount Aerie Unsubscribe Notice

Loyalty Programs

Hotels.com – free night for every 10 nights you stay

Sephora Beauty Insider – gift cards, exclusive member products, birthday coupons

REI Membership – 10% annual refund, discounts in-store, huge discounts on classes/adventures

Now Go Make Happy Customers

It’s profitable to invest in customer retention

Email marketing is a great form of lifecycle communication

Great retention marketing doesn’t happen overnight, but you can start today, implement 80/20, and then optimize