A restaurant serving lip-smacking food, an apparel brand launching a new collection or the neighbourhood salon. They all send marketing campaigns to their existing customers. Despite the fact that marketing is important, what does not often come into the picture is what can be done to improve revenue from retention marketing.
Customer retention is the act of keeping current customers, the ones you've already spent money acquiring. Retention marketing is extremely important for any business.
Attracting a new customer costs, on average, five times as much as keeping an existing one, and depending on the industry you are in, it can cost up to 30 times as much
Notably, your best customers don’t just buy one product or use your service once. They come back again and again for more. Customer retention increases your customers’ lifetime value and boosts your revenue.
Most businesses have a stipulated marketing budget that they spend every year. How about the spend stays the same and the returns get doubled?
One of the best marketers in the world, Google, rightly puts it. If you want to successfully engage today’s impatient consumers, you have to be ready to meet them on their time, with the perfect message for each of their changing needs and interests.
This is one of the many ways that can help you increase your revenue from retention marketing. To help simplify the same a little, let’s talk about 6 steps that can help any business engage maximum customers personally and convert them to paying customers
1. Understand the Brand Objective
If the objective or the idea of what we want to achieve from the marketing campaign is unclear, the campaign will most likely not be a success. The objective defines pretty much how the next steps will go.
Campaign objectives can vary from launching a new product, increasing sales, winning back lapsed customers or informing of a sale among others. It also helps you measure at the end of the campaign whether it was a true success or not.
If a digital campaign to generate more website leads is analyzed by the number of likes and shares it generated, not leads generated, it’s not going to benefit you. Choose your pick wisely with what the objective is for YOUR campaign
2. Identifying the best Campaign Audience
Once you know the objective, pick only the audience that suits the objective. If you are launching a new product, reach customers who have shown affinity in the past for new products or have visited your business in the recent past. A customer from 2 years ago will unlikely return on a new product campaign.
If a campaign is to reactivate lapsed/lost customers, identify how many of those lost customers were regular customers who got churned and how many were one time visitors who never purchased again. It is not necessary for every customer you had to receive every communication you send. More often than not we send bulk campaigns to all customers that actually irritate and churns customers.
3. Customer First Offer
One of the most popularly spoken topics in business is the dependency on offers and discounts to retain customers. How strongly do you want to utilize offer is a call for each brand, but if you want to run it successfully there is one sure shot method called Customer First Offer.
A customer first offer is the idea of creating offers basis individual customer characteristics than brand-specific characteristics.
To understand, a spend based offer like 15% off on purchase of Rs 2000 is not relevant for a customer that comes and purchases for Rs 400 every time, nor is it helpful for a customer who spends Rs 4000 every time. Creating a customer first offer would send the person spending Rs 400 an offer of 10% on spending Rs 700 and an offer of 15% on spending Rs 5000 for the other customer.
4. Creating the right Content
Batman and Joker's product personalisation
The increasing relevance of communication strongly depends on the content. If a vegetarian customer is seeing advertisements for ‘delicious butter chicken’ or a female customer receives an SMS talking about ‘Men’s Jackets’, the point is lost.
Increasing conversion from the content is all about identifying customer product choices. It is best to suggest or recommend products from the same category or complimentary category. Customers previously purchasing hot coffee would be interested to have a doughnut along with it and can be promoted doughnuts.
5. Reaching out on relevant Channel
The channel used to communicate to the customer makes the difference between whether the customer will see the campaign or not. It is crucial to identify which channel a customer is reactive on and target accordingly, saves you money and makes marketing effective.
As a 24-year-old friend puts it, he is a complete Instagram kid and makes all his purchases from ads on the platform including his bag and earphones. However, his mother hasn’t discovered Instagram but spends an hour on Facebook daily. His father running his own business still checks SMS’s every day looking at bank debit and credit notifications, while his sister working at Amazon spends almost 8 hours a day in front of the laptops responding to emails.
Each person in their family needs to be targeted separately on Instagram, Facebook, SMS & Email. Know your customer to grow your repeat customer.
6. Finding the best Day & Time
Customers knowingly or unknowingly have purchase patterns.
They may like ordering food from you only in the office which is 25 km from their home. So any marketing on a weekend to a customer sitting at home would be futile, they’re your weekday customers. Similarly, the retail outlets near your office would be different from the ones near your home.
Identifying a pattern in the customer's purchases of which day they usually shop can greatly benefit marketing. A customer is more likely to be converted by the right communication on the right day to make a purchase. Marketing is all about timing.
How do you start?
The timing couldn’t be better to personalize marketing for your customers. With the availability of increased customer information and advancements in AI/ML, it is possible now to run marketing campaigns with the right audience, content, channel, offer and time in just a fraction of time.
We at Xeno, enable retail and QSR brands like Dunkin Donuts, Taco Bells, Forest Essentials to increase their retention marketing conversion by more than 150% using AI-ML based campaign manager.
If you want to implement AI on your Brand's Retention Marketing Activities, please free to reach out to me at firstname.lastname@example.org or you can go through our website to know more about it.