Retention marketing, as the name speaks, focuses on making more revenue from existing customers by motivating them to give repeat business.
In this guide, we deep dive into retention marketing, what it is, why it matters, and what tools to use to execute this strategy effectively.
What is Retention Marketing?
Retention marketing is a combination of strategies implemented to keep clients engaged, satisfied, and motivated to buy. Such strategies consist of offering relevant and catchy content to the customers to raise the lifetime value as well as profitability for the company.
Many marketers don't know the stats but if you have a good customer base and can achieve at least a 5% growth in customer retention (getting repeat business), you can get a 75% rise in your existing revenue.
Benefits of Retention Marketing
Customer retention is cheaper than customer acquisition
It is common knowledge that holding on to a customer is more cost-effective than bringing in a new one. It costs up to 5x more to acquire any new customer when compared to the cost to retain an old one. Consequently, you can grow your business at a lower cost with customer retention.
Acquiring customers gives temporary results
The money spent and the efforts undertaken for customer acquisition give you temporary results. In every new cycle, you need to spend more money to acquire new customers if the previous customers are not retained properly.
Focus less on racing with competitors
Your competitors offer the same products or services as you do. The price is similar, so you will also need to compete on price – as a result, your business will sell a lot but will not bring any profit.
Instead of customer acquisition, shift your focus to keeping the existing customers. A satisfied customer will not have a reason to look for other stores. You are their routine now.
Get Valuable Feedback
Loyal customers will be happy to see their favourite brand grow. They also get interested in making your product better and are likely to fill in the feedback form as an investment in a better future for their customer experience.
If a customer sees their feedback being taken seriously, he will be more likely to buy again.
Remember, customer feedback plays a pivotal role in making your product the right fit for other customers. You will get to know what is the most important thing that makes people stay with your brand!
Fewer conversion efforts are required for repeat purchases
When customers make repeat purchases, they have all the information they need. Hard follow-ups with discounts and offers are not a necessity.
Conclusion
These are a few of the many benefits of customer retention. In the end, retention marketing is something that all brands should consider seriously. It can help you increase the count of your loyal customers that stay with your brand for the long haul. This has a wide variety of benefits for both your business and your customer. Whether you're looking to improve customer satisfaction or boost customer lifetime value, retention marketing may help. It's a lot easier than you might think.
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