A Few Thoughts on Retention Marketing
Remi asked me to pen some thoughts on retention marketing so I will distil them into a few points. Many businesses in this age(especially businesses built on Social Media) ignore customer retention and focus solely on customer acquisition. They end up spending more money than they should because they have to acquire new users for every product they sell.
1. What is retention marketing?
Retention marketing is the term that describes marketing activities focused on encouraging an acquired customer to make a repeat purchase.
2. When should you start retention marketing?
You should start retention marketing as soon as you start user acquisition. It’s necessary that you keep in touch with a customer as soon as they make a transaction. How you decide to communicate with them is your decision but you definitely should.
Retention also helps you model your business to focus on repeat activities. If you’re selling handbags to women, you want to think — how often do women buy handbags? How do I turn purchasing bags into a repeat activity?
3. Retention is cheaper than acquisition
Did you know that it costs 5 times as much money to acquire a customer than to keep an existing one? Did you know that success rates are much higher when selling to existing customers than selling to new customers?
4. What are the channels for retention?
Acquisition channels can also be channels for retention. Some of them are:
- Social media
- Remarketing
- SMS
- App notifications
5. Retention For Tech
Many technology products(especially software) have changed models in recent times and are designed for retention. Savings and investment apps encourage you to take action daily, weekly or monthly. Streaming services(Netflix, Spotify, Apple music) ask you to subscribe monthly.
Product owners must think about how they can create positive habits with their product while increasing the lifetime value of each customer. They can also take advantage of retention channels and automate subtle nudges to create new habits.
Got any thoughts or questions on retention marketing? Please leave a response below.
Further Reading
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