The Email Marketers’ Guide to Customer Retention

You’ve likely heard the stats before. But it’s worth reminding you. Acquiring a new customer can cost up to five times more than retaining an existing one.

Add to this that the probability of selling to an existing customer is at least 40% more likely than to a brand new customer.

And (yes, there’s more), your existing customer base spends 31% more than new customers. So even when you release a new product, your loyal customers are 50% more likely to buy into it.

We’d say it’s pretty clear that keeping customers happy pays off.

But with many marketers, tech, and agencies so excited about the top of the funnel. It’s easy for your current customers to be overlooked.

Many believe that once they’ve bagged the customer, their work is done. While others assume their customers are happy, and need little attention.

Unfortunately, that’s not always the case.

64% of customers say experiences are more important than prices. And more than 50% have cancelled a purchase due to poor customer service

And if your brand can’t deliver. Your customers can easily find someone else to shop with.

In this guide we explore how email is integral to keeping your customers happy and spending. From simply welcoming new customers on board, to encouraging them to buy more.

When it comes to customer retention. Better starts here.

Why customer retention is important

So we’ve established that current customers cost less and are more likely to buy. But why else should you care about customer retention? 

Word of mouth

If you put effort into keeping your customers happy. Then they will put effort into letting the world know.

Word of mouth marketing such as reviews, testimonials, social media mentions, or recommendations are the ultimate social proof. And they work.

88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts.

And 74% of consumers identify word of mouth as a key influencer in their purchasing decisions.

Invaluable insight

Understanding your audience is key to growing your business. And what better source of information than those who buy from you?

Talk to your customer base. Ask them for their opinions. Whether they are good or bad.

Ask them if they considered other competitors. Why they bought from you. And what they would like from you.

All this feedback is invaluable. It will help you direct your strategy and stay ahead of your competitors. Long term.

Employee happiness

Customers are key to any business. But so are employees.

The pressure put on teams to constantly be plugging a leaky bucket can be exhausting. And expensive.

Ongoing cold calls and hunting for new customers can sometimes seem like slow progress. And can be demoralising.

By focusing on your current customers, your employees can have more meaningful discussions with people who are already bought into your product or service.

And instead of sell, sell, sell. Your employees have the opportunity to help others. Whether that be through support or recommendations. So your team is focused less on the hard sell. And more on your audience.

Marketing budget

And of course, the costs saved in customer acquisition all go towards helping your marketing budget.

Finding and bringing on new customers is expensive for any marketing team.

Paid advertising. Events. Referral schemes. It all adds up.

And while we’re not suggesting marketing teams won’t have to consider these channels in their budget. By increasing their focus on customer retention, their outgoings certainly won’t be as high.

Benefits of email for customer retention

Hopefully by now we’ve convinced you that customer retention should be a key focus area for your business.

But how do you go about doing customer retention well, long term?

The answer is email marketing.

Reach an already engaged audience

One of the key rules of email marketing for consumers is that they are only contacted if they have given permission.

The benefit of this for businesses is that they have access to an audience who are already engaged with their brand and offering. And are open to hearing from them.

This not only results in a much higher conversion rate. But it is a much more effective use of your time and resource than contacting people who just don’t want to know.

Easy to get started

Email marketing has been around for a while. Which means businesses have had lots of time to streamline the set up and process.

It doesn’t have to involve a huge team of creatives, complicated automations, or expensive technology.

Yes, getting smart with email is certainly something to aim for. But when you’re just starting out, email is simple, straightforward, and cost effective.

For some businesses, their most effective campaigns are plain text.

And for those who want a more creative template. All good ESPs will offer a user friendly drag & drop editor.

With email, you can start small. And easily scale as the positive results flood in.

Low costs

Which brings us neatly onto our next point. Email marketing is not a budget breaker.

Far from it. There are no advertising, print, or postage costs. You won’t have to pay out for days’ worth of design or copywriter time. And rates for a decent ESP are very reasonable.

So while there are a small amount of overheads. You are able to send out thousands of emails at a time. At a much reduced cost compared to similar types of targeted activity on other channels. 

Increases customer lifetime value

Customer retention is all well and good. But what about how much money those long term customers make for you?

A customer who is happy and engaged is both likely to spend more and recommend their friends, family, and colleagues.

The right type of email campaign can encourage this behaviour by showing your customers that they are truly appreciated, and making them feel special.

Simple personalisation can go a long way in making a customer feel like a VIP.

But by delivering the right message, at the right time, to the right person, you are showing your customers that you actually understand them.

And for those customers who haven’t engaged in a while? Email marketing is the perfect way to send a personalised re-engagement email to entice them back into buying from your brand.

Types of email for customer retention

So, how can you go about achieving all of the above?

Below we have outlined some of the best tried and tested emails to help with your customer retention. From welcoming them to your brand. All the way through to encouraging a new purchase.

Welcome campaigns

Your audience are most engaged with you at the point of purchase or sign up. So this is the best possible time to communicate with them.

Get your relationship off to a positive start with a welcome email. Not only offering your new customer a warm welcome, but also setting their expectations for who you are, how often you will contact them, and how they can contact you.

And welcome emails aren’t only great in theory. They have been proven to work.

Welcome emails generate four times more opens and five times more clicks than regular marketing campaigns.

So it’s clearly the perfect time to say “Hello!”.

Birthdays and anniversaries

Whether it’s their birthday or an anniversary, everyone loves to feel special on their special day.

That’s why sending out emails for key dates such as these is simple, but highly effective. With birthday emails alone generating 481% higher conversion rates than other promotional emails.

So whether you are offering a freebie or your best wishes, Birthday and anniversary emails will help to build brand rapport and keep you in your customers’ minds.

But of course, by offering something as simple as a discount code, your email could also give your customer the nudge they need to come back and buy.

Abandoned basket

Almost 70% of online baskets are abandoned, resulting in more than £18 billion of lost sales each year.

That’s not an insignificant amount.

Fortunately, basket abandonment emails are the perfect way to encourage a customer back to complete their purchase. Nearly half of basket abandonment emails are opened and a third of those who open them go on to make a purchase.

Automation platforms will utilise real-time behavioural data to send these types of email. Meaning they are triggered immediately and land in your customers’ inbox in just minutes (or even seconds) after they abandon their basket.

Re-engagement campaigns

The inbox is a saturated place. And with so many brands competing for the attention of your recipient, it’s inevitable that some of your customers may begin to disengage, lose interest, and turn to competitors.

Not only is this bad for your sales. But it is also bad for your email health. Once a proportion of your email list stops engaging, you begin running the risk of damaging your sender reputation and deliverability rates.

Re-engagement emails are designed to recapture inactive lapsed customers. Encouraging them to connect with your brand and marketing, and buy from you once again.

And these types of emails are proven to be successful. Return Path found that 45% of recipients who received re-engagement emails went on to read subsequent messages from a brand.

Image Source – Hubspot

Announcements and launches

Announcements, whether it’s your latest product launch or a 50% off sale, are essential to keeping your customers in the loop.

They also have the added benefit of letting you shout about the latest and greatest developments in your business.

When done well, announcement emails help to get customers excited about your brand and your latest news. It helps customers to feel connected and part of your process.

And it also encourages them to make a new purchase, upgrade, or renew.

Upselling and cross selling

You’re probably used to upselling and cross selling in your everyday life.

“Would you like fries with that?”  

“You can upgrade for an extra £1!”.

Upselling and cross selling encourages customers to buy a complementary or superior product to their original purchase. Thus spending more with your brand.

Email is the perfect way to encourage this. With clever use of copy and imagery, these emails can offer helpful and invaluable product suggestions to the customer. Whilst securing a purchase for the business.

Image Source – Really Good Emails

Invaluable feedback

Last but not least, the feedback email.

This communication is an essential part of any customer retention strategy.

By asking the customer about their thoughts, it helps them to feel heard and cared about.

It also offers them the opportunity to raise any disappointments, concerns, or queries. Before turning to a public review website.

And if your customers aren’t happy, it gives brands the opportunity to showcase their excellent customer service skills. Turning that unhappy customer into a loyal repeat buyer.

Still worried about losing customers?

If you think your customers are getting itchy feet and checking out your competitors, then worry not. We can help.

Why not get in touch with one of our friendly experts for a chat? They are a wealth of knowledge on customer retention, and are always happy to offer advice and guidance.

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