RETAIN, don't just ATTAIN- RETENTION MARKETING
As a retailer, your primary goal is to make profitable sales. And the only key driver to achieve this goal is to keep your consumers satisfied and increase their customer lifetime value. While we can strategize and implement a plethora of customer-centric marketing approaches, Customer Retention strategies will always top the list.
According to Bain and Co., the cost of attracting new consumers is seven times more than retaining a returning consumer. Research also shows that a 5% increase in customer retention increases the profit by 125%.
Well, a dream come true. Isn’t it?
But before we dwell on to Retention Marketing, absolute knowledge about retaining a buyer is a must. So let us first understand
What is Customer Retention?
As the name suggests Customer Retention is an ability of a brand to retain the existing consumers, i.e., to make an existing buyer a returning rather, a repeating purchaser. As easy as it may sound, the broken consumer journey is the biggest roadblock in achieving returning consumers.
Thus, to fix this broken journey, it is imperative to contrive Retention advertising strategies. But first,
What is Retention Marketing?
Retention Marketing is a sequence of strategies imposed to increase consumer engagement, satisfaction, and loyalty with and towards a brand.
It is also sometimes referred to as LOYALTY MARKETING, essentially targeting the consumers being happy, satisfied, and returning. Thus, it spikes the purchase frequency and the repeat purchase rate, leading to increased CUSTOMER LIFETIME VALUE.
Before we move further, it is salient to understand the difference between
RETENTION MARKETING VS ACQUISITION MARKETING
Acquisition Marketing focuses on bringing the new buyers on board rather than focusing on the old consumers. While this methodology can help gain profit by exploring a broader segment of consumers, but according to an eConsultancy report, 82% of companies agree that retaining an existing consumer is more cost-effective and cheaper than acquisition.
So you might think, Retention can be your sole goal of advertising strategies?
No! You will have to implement both Acquisition and Retention strategies together. Take both of them like coffee beans and water.
Water is your acquisition, and Coffee is your retention. Together they will create an aromatic and strong Americano!
Well! Who doesn’t like a strong coffee? Don’t answer that if you are a Chai person.
Now that we are familiar with Retention advertising techniques and there importance, implementing the complex strategies might feel overwhelming. So here are a few easy
RETENTION MARKETING STRATEGIES:
1. FOCUS ON CUSTOMER LIFETIME VALUE: Focus on consumer lifetime value and not on customer acquisition metric. Confused?
Customer acquisition metric is a calculation of the cost to acquire the buyer to the amount they spend in their first purchase, giving you your RETURN ON INVESTMENT (ROI). Thus, most of your advertising strategies are focused on acquiring new customers.
But while we were all running this blind consumer acquisition race, consumers became smarter. They don’t just focus only on discounts and offers; they focus on values. Thus, adapting to this changed behavior, brands must focus on each consumer’s CLV and not just on one-time profit.
2. INVEST IN A CUSTOMER ENGAGEMENT PLATFORM: A key driver to consumer retention is continued engagement and satisfaction. Engagement helps in understanding consumer behavior and prioritizing consumer requirements. Once the buyer has built trust in your brand and feels valued, they will return and recommend you to their friends and family.
Karnival is an effective customer engagement platform with Smart Receipts, built to create a continued enhance engagement by bringing your customers online after the sale, to enhance their experience.
3. PRIORITIZE RETENTION: Many brands focus primarily on consumer acquisition, and customer retention strategies hold a secondary place. But focusing on retention advertising strategies is a more effective way to rationalize your expenses and improve ROI. Thus, to develop an effective result-oriented marketing strategy, new acquisitions and retaining old consumers deserve equal attention.
4. PERSONALIZED LOYALTY PROGRAM: While focusing on customer engagement is salient, making those engagements personalized is another metric. The consumer no longer enjoys robotic conversations; they want to be treated as a human being and not just another entry in the database. While buyers might get attracted to the offers and discounts given by the company, personalization of those discounts helps you earn brownie points and provides the buyer with a better consumer experience.
Karnival suite helps you in building a personalized loyalty program. Thus, making your customers happy and helping you in fixing the broken post-purchase journey.
Lastly, while the effectiveness of Retention Marketing may vary from business to business, a consumer buying an electric heater is not going to return and buy the same heater anytime soon. But they might visit to purchase another electronic item from your store, and if not, they will surely spread a word of mouth (good or bad) to their acquaintances.
Thus, the brands focusing on retaining the consumers, are always rewarded for their extra efforts and customer-centric approach. While implementing this technology might be tedious, Karnival is your knight to help you ACQUIRE. ENGAGE. RETAIN.