Last updated: June 12, 2023
Running a successful ecommerce business involves a lot of steps, but it’s essential to retain your customers in an effort to have a steady flow of income while putting your business in a position to grow profitably.
Retention marketing is a big part of maintaining customer relations, so you have to be careful when devising those strategies. You can use tools like Upscribe to help boost your subscription and retention business by delivering a powerful customer experience.
What is Retention Marketing?
Retention marketing is where you carry out strategies to help maintain positive relationships with your customers, improving customer retention in your business. The goal is to reduce your churn rate and ensure customers continue using your business or services.
For example, platforms like Upscribe allow you to improve your customer experience and minimize churn with tools such as:
- Smart Cancellation Flows
- Reorder Buttons
- Additional Discounts or Free Gifts (on future orders)
- TImed Payment Retry
- Flexible Subscription Management (for customers)
Different Types of Retention Marketing Strategy Campaigns with Examples
Subscription Customer Retention Campaign
Use subscription services to encourage customers to make repeat purchases. Give your subscribers benefits that one-time buyers don’t receive. Amazon Prime, for example, utilizes subscriptions as a way to retain customers. Subscribers get access to free shipping and one-day deliveries, along with a selection of Prime Video titles.
You can easily set up a subscription service with the help of Upscribe. Deliver great customer experiences with our powerful tools, including a customizable customer portal and passwordless logins.
Reactivation-Based Customer Retention Strategy Campaigns
Reactivation campaigns focus on customers who’ve stopped or are about to stop using your business. The aim is to recapture their interest. These campaigns often target specific audience segments, such as ‘customers who haven’t logged into their account in X amount of days’.
Sephora used a loyalty program to entice customers to return. They gave out coupons, which were only valid for a certain amount of time. This meant customers who wished to reap the benefits needed to purchase from Sephora sometime soon.
Referral Program Campaign
A referral program is where you ask customers to convince a friend or family member to use your services. For every successful referral, your customers receive a reward from you, such as free items and discounts.
For example, Harry’s provides customers with a unique code, which they can send to their friends as a referral. They must sign up to Harry’s for the referral to be a success. Rewards include a $5 credit, free products, and free shipping.
Onboarding Customer Retention Marketing Campaigns
Customers are more likely to stay with a brand if they find their services easy to use. That’s why onboarding is essential to retaining customers. Make sure their first experience with your brand is a positive one, where you guide and teach them how to use your services.
For example, Slack uses tooltips to help new users learn about their key features.
Customer Retention Marketing vs. Customer Acquisition Marketing
Customer retention revolves around encouraging existing customers to repeatedly use your services, while customer acquisition is about attracting new customers.
Why is Retention Marketing Important?
Retention marketing is an essential aspect of gaining loyal customers, so it’s worth investing in a product like Upscribe. With our out-of-the-box tools, customers can navigate your services with ease.
It Costs Less Than New Customer Acquisition
Retaining existing customers is cheaper than trying to acquire new ones, so you can focus on building a profitable ecommerce business. Existing customers are already familiar with your products, making them easier to convince than potential customers.
Building Referrals and Loyalty
Develop Better Products, Faster
As you generate more repeat business, you’ll get more customer feedback. Determine which products are doing well and which ones are avoided. Ask customers for their opinion to get more insights into their behavior.
Reducing Customer Churn Will Help Sales Growth
How to Calculate Your Customer Retention Rate?
Customer retention rate (CRR) tells you the percentage of customers you’ve retained over a period of time. Use the following formula to calculate your CRR:
CRR = ((E – N) ÷ S) x 100
S = customers at the start
E = customers at the end
N = customer acquired
Here’s an example:
((1400 – 500) ÷ 1000) x 100 = 90% CRR
How to Create an Effective Retention Marketing Strategy
Step 1: Make and Understand a User Journey Map
Firstly, you should map out your user journey and understand why customers churn or return for repeat purchases. Visualize the steps in your conversion funnel and identify where customers churn the most.
- What are their pain points?
- Is a certain step too difficult to complete?
- What are customers exposed to during that step?
There are many reasons behind customer churn, from expensive pricing to overly lengthy checkout processes. View your customer data to try and understand why your customers left.
Similarly, you should try to determine why customers return and which products are purchased the most frequently.
Step 2: Determine Your Churn Rate
Calculate your churn rate so you get a better idea of how poor your customer retention currently is. Your churn rate tells you the percentage of customers who’ve stopped purchasing your services or products within a given time frame.
Pick a period of time, such as one month or one year. Then, use this formula to determine your churn rate:
Customer Churn Rate = (Lost Customers ÷ Total Customers at the Start) x 100
Here’s an example:
(50 ÷ 1000) x 100 = 5% churn rate
Reduce Churn with Upscribe
Grow your ecommerce subscription business with Upscribe’s powerful tools, which elevate customer experience and prevent churn from occurring. For example, our smart cancellation flows offer benefits, such as discounts, to customers who wish to cancel their subscriptions. Offering alternative options allow customers to rethink their decision to churn.
Step 3: Focus on Onboarding and First Purchase
Create a compelling online subscriber experience with a seamless user onboarding process. Avoid overwhelming new customers with too much information at once. Instead, it’s better to give them small tips on how to use your features in real time as they navigate your interface.
First experiences are crucial, so make sure your customers have a great time with their first purchase. The process should be quick and easy to complete. As a result, new customers are likely to return for a repeat purchase since they recall your brand fondly.
You should aim for these three things when designing your onboarding process:
- Setup: You must make the first stages of creating an account or logging in a simple process for new customers. Lightly guide them through the steps with intuitive UI design and obvious signposts.
- Teaching: Show customers how to actually use your services. Focus on the key features often used by customers.
- Data Collection: Use the data collected from onboarding to create customer profiles. This allows you to provide personalized customer experiences for each user.
Tips for Designing an Effective Onboarding System
- Keep it short and easy to follow. Encourage customers to actually use the features mentioned so they can quickly get familiar with your platform.
- Always provide customers with the option to skip all tutorials or onboarding.
- Use visual indicators to show customers how the UI works and where everything is.
- Don’t enable notifications or data collection by default — ask customers for their permission. It promotes trust between you and your users.
Step 4: Use Behavior Analysis Tools
Get insights into your user engagement with behavioral analytics tools, such as Amplitude and Hotjar. This can help you measure subscriber satisfaction or identify customer frustrations. Analyze user journeys, view session recordings, and look at heatmaps to determine what elements interacted with the most.
Step 5: Create Personalized Customer Communications Using Data
Customize your subscriber experience for each customer with personalized communications. With the user data you’ve collected, you can provide product recommendations based on searches or purchase history, including the names of customers in your emails and much more.
For example, Spotify creates personalized playlists based on each user’s listening habits. They look at songs they’ve liked, shared, played, and so on. They also have an annual campaign called Spotify Wrapped, where they share compilations of each user’s top songs and artists for the year.
Step 6: Make it Easy for Customers to Share Feedback
Finally, give your customers an easy way to leave feedback so you’re always keeping track of customer satisfaction and ways to improve your services.
Here are some methods for collecting customer feedback:
- Messages (SMS or Digital Channels)
- Focus Groups
When it comes to creating a successful ecommerce business, retention marketing is key. Customer churn can cause major revenue loss, so you want to avoid that as much as possible. Prevent churn before it even occurs with the help of Upscribe’s powerful out-of-the-box tools.
Schedule a demo today to see how we can help minimize your churn rate.