Retention Marketing Keep Your Customers Coming Back For More
Retention Marketing: Keep Your Customers Coming Back for More
Dec 19, 2014
Framework for retention marketing for ecommerce stores
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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: [email protected]
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
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