Simply put, retention marketing is the practice of focusing on retaining and developing loyal customers, rather than exclusively seeking out new ones. By engaging and enticing customers into making repeat purchases, retention marketing can help you build a steadfast base of consistent regulars that spend, spread, and forgive more easily than new customers.
While acquisition marketing is all about getting your name out there and breaking through the white noise to attract new customers, retention marketing focuses on making sure your existing customers are as happy and satisfied as possible.
Unfortunately, retention marketing is a bit more complicated than acquisition marketing, because it requires you to truly understand the pain points presented by your company. Whereas acquiring new customers merely requires something that grabs attention, retention marketing requires you to make a good first impression, and stick with it. Fortunately, the pay-off is more than worth the effort.
Retention marketing strategies
Knowing the definition of retention marketing doesn’t exactly give you all the information about what it entails. This popular trend is more than just deciding to value loyal customers over new customers - it’s about analyzing how your company does business, and employing strategies that will make sure your first impression (and every impression after that) is a good one.
Here are some specific strategies you can employ to retain loyal customers:
1. Improve customer service - Happy customers become loyal customers, and the best way to keep customers happy is by offering comprehensive, expert support – no matter what their problem may be.
2. Utilize automation - Automation is designed to make running your business – particularly your customer support efforts – as easy as possible. Make sure you look into how you can use automation as part of your customer engagement strategy, for your sake and your customers’.
3. Encourage customer feedback - Feedback from customers is basically free field research to improve your business, plus it makes customers feel appreciated. Basically, it’s the easiest way to find out how customers feel about your company, while providing you with invaluable data on how to improve your offering.
4. Build community - Whether through content or online forums, a community of loyal users will breed more loyal customers. Look for ways to engage with and build your brand, whether through social media, knowledge hubs or video content.
5. Send newsletters - Newsletters are one of the most effective means of marketing – it’s a fact. If you want to stay on a customer’s radar, regular newsletters can be a simple, non-invasive way of doing so – that is, as long as you don’t send too many.
6. Be socially conscious - In 2020, customers care about more than just price and features. Loyal customers value a company that makes social good a part of their mission, so make an effort to contribute to charitable organizations and socially conscious causes.
How effective is retention marketing?
Before retention marketing became all the rage, acquisition marketing was the primary means by which companies secured their future. However, despite its longevity, acquisition marketing is actually notably less effective at improving your bottom line compared to retention marketing.
For one, customer retention inherently breeds loyal customers, which is a lucrative avenue to success for a number of reasons. Fortunately, retention marketing not only makes you more money, but is also notably less expensive when it comes to implementing strategies. Acquiring new customers costs five times more than retaining a loyal customer, while loyal customers are 60% to 70% more likely to make a repeat purchase.
Why is retention marketing so important for SMEs?
If you’re looking to grow your business, retention marketing is simply the most affordable, most lucrative, and most obvious option. Making an effort to hold onto your loyal customers – as opposed to exclusively focusing on getting new ones – just makes sense.
Diversification, in most aspects of the business world, is a good thing, and diversifying your marketing strategies is always a good idea. Obviously you aren’t going to scrap your acquisition marketing in pursuit of a more robust retention marketing strategy, but the combination of the two could have a serious impact on the success of your business.
The reality is that retention marketing isn’t just a new strategy for helping your company grow – it’s an essential strategy for longevity in the business world. More and more businesses are competing for the limited number of new customers out there, and focusing your efforts on building a loyal customer base is simply a better investment with better returns in the long run.