What is retention marketing?
Retention marketing is the set of strategies and tactics a brand uses to keep existing customers engaged, active, and purchasing — rather than focusing exclusively on acquiring new customers. Effective retention marketing increases customer lifetime value, reduces churn, and lowers the overall cost of revenue growth by generating more revenue from the existing customer base.
How does retention marketing work?
Retention marketing works by creating a positive customer experience and providing customers with value. This can be done in a variety of ways, such as:
- Offering high-quality products
- Providing excellent customer service
- Creating a rewarding loyalty program
- Offering personalized experiences
- Delivering engaging and informative content
Types of retention marketing:
There are many different types of retention marketing strategies, but some of the most common include:
- Loyalty programs: Loyalty programs reward customers for their business and encourage them to keep coming back.
- Email marketing: Email marketing can be used to send customers personalized and relevant content, such as product recommendations, special offers, and educational content.
- Social media marketing: Social media marketing can be used to build relationships with customers and create a community around a brand.
- Customer segmentation: Customer segmentation can be used to identify and target different groups of customers with personalized retention marketing campaigns.
- Customer feedback: Customer feedback can be used to understand what customers want and need, and to make improvements to the products, services, and customer experience.
How to measure retention marketing:
The success of retention marketing campaigns is typically measured by the following metrics:
- Customer lifetime value (CLV): The total amount of revenue that a customer is expected to generate over the lifetime of their relationship with a company.
- Customer churn rate: The percentage of customers who stop using a company's product or service within a given period of time.
- Net promoter score (NPS): A measure of customer satisfaction and loyalty.
- Repeat purchase rate: The percentage of customers who make more than one purchase from a company.
- Customer engagement: The level of interaction that customers have with a company, such as the number of times they visit a website, open an email, or use a product.
Why is retention marketing important to marketers?
Retention marketing is important to marketers because it allows them to:
- Increase customer lifetime value
- Boost customer loyalty
- Reduce customer churn
- Drive repeat purchases
- Improve customer satisfaction
All of these factors can lead to increased sales and revenue for the business.
Post-transaction moments as a retention tool
Commerce media and post-transaction advertising are natural retention tools. The moment after a purchase is one of the highest-engagement points in the customer relationship — the consumer is satisfied, their attention is focused, and their trust is high. Brands that use this moment to deliver a relevant follow-on offer, loyalty incentive, or personalized recommendation are investing in retention at the most receptive point in the journey.
Who needs to know what retention marketing is:
- Performance marketer
- Digital marketer
- Email marketer
- Social media marketer
- Customer success manager
- E-commerce manager
- Retail manager
- Marketing manager
- Agency owner
- CMO
Use retention marketing in a sentence: “An ecommerce retailer could use retention marketing to boost customer loyalty through a rewards program that allows customers to redeem points in exchange for discounts.”