Email marketing has become one of the most valuable tools to both increase and be a means of measuring customer retention. This is because email marketing is a cost-effective and easy way to target your specific consumers.
In 2021, a staggering 319.6 billion emails are estimated to be sent and received each day worldwide. More the reason to start investing your time and money into a customer retention strategy. This blog will delve into the importance of customer retention and give an insight into how email marketing plays a fundamental role in delivering an effective customer retention strategy.
Why is customer retention important?
For those who don’t know what customer retention is, it’s a measurement of the number of customers a company keeps over time and this is calculated as a percentage of a company’s existing customers that stay loyal.
You’ll have more opportunities to cross-sell and upsell other products if you have a strong customer retention strategy. With targeted retention emails, you can increase the earning potential of each customer. Especially as emails with personalised subject lines have a 50% greater open rate than those with generic subject lines.
When it comes to decision-making, trackable data can help your company go forward. By following the measurement of your customer retention rate, you will have access to vital data that will enable you to make well-informed business decisions that will help you achieve your goals.
How is customer retention measured?
Measuring the customer retention rate can help you evaluate how long your customers stay. Follow these steps to determine your CRR:
- Find out the numbers of customers/transactions/orders/enquiries you have at the end of a given period, this could be a week, month, or quarter (E)
- Subtract the total number of new customers acquired in that timeframe (N)
- Divide that number by the existing customers at the start of the period (S)
- Then multiply by 100 to create a percentage
This data is then put into a formula and calculated into a customer retention rate percentage: E – N / S x 100 = CRR%
The benefits of email marketing
So, now it’s clear what customer retention is and how to measure it, what are the benefits of using it within email marketing?
The most significant benefit of including email marketing in your customer retention strategy is its cost-effectiveness.
The fact is, acquiring a new customer is at least five to 25 times more expensive than keeping an existing one. If you track your customers’ behaviours and interests based on previous purchases, you can make your marketing efforts more streamlined by sending them relevant emails.
Customer acquisition plays an important role in the success of a business. However, when customer acquisition slows down, existing customer relationships are extremely valuable as email marketing is one of the best ways to maintain these ongoing bonds.
Emails help to establish a connection between yourself and your customers. They can offer a better experience and boost your reputation, with 89% of companies reporting that excellent customer service plays a large role in customer retention.
Targeting your customers through email marketing can both educate and add value to your product or service. The idea is to establish yourself as such a valued source of information that your customers go to you for the most up-to-date industry news and advice. This authoritative role will shift their perception of you from a paying customer to a loyal one who appreciates the value of your product or service.
Email marketing etiquette
Customers choose to leave for a variety of reasons which include no longer needing your services. There are, however, some things you can include within your email marketing to keep as many customers as possible and prevent them from losing interest in your customer retention strategy.
Keep your emails simple and avoid inundating your customers with information. They want the quickest and most direct path to a sale, as well as the most direct contact. Make sure customers can easily contact your company with any queries or concerns they may have. They’re more inclined to unsubscribe from your emails if they can’t reach you quickly. Similarly, keeping your consumers interested requires building a close connection with them. Responding to emails in a timely manner, replying to comments, and returning phone calls can all have a big impact on the customer experience.
What emails work best?
Sending simple emails which boost customer value and keep people coming back to your business, is a great place to start if you want to strengthen your customer retention strategy.
Welcome emails – When someone registers for a newsletter or creates an account, a welcome email is often sent to introduce the business, the products and services available, and highlights the value of your brand in greater detail. This is a great way to welcome new customers and to remind them why they signed up.
Friendly reminders – A polite reminder sent at the right time will almost always result in a repeat customer. Cart abandonment, which reminds customers of things they like that have been left in their basket and encourages them to check out, is one of the most common retention email strategies. Product recommendations are an effective technique to attract buyers who have previously expressed interest in similar items. Finally, there are repeat purchases where customers can be sent reminders to renew their recurring service or product, such as a subscription service or a three-month supply of a product.
Exclusive offers – The majority of people sign up for emails to receive exclusive promotions, insider information, or early-bird discounts. Send out special offers linked with events throughout the year, such as seasonal holidays, a mid-month blowout, national days, a year-end special, or even the anniversary of a subscriber joining up for your email list, to reward client loyalty. Inspiring your existing customers with a loyalty program can help maintain interest and generate additional sales, which is great for your customer retention strategy. Ensure your pricing is comparable to the rest of the industry, as your customers will always be seeking the best deal.
Review requests – Requesting feedback surveys from current customers is another way to ask for input. Not only does it demonstrate to your customers that you appreciate their input, but the feedback can also be used to improve your company and the services you provide.
Re-engagement emails – Re-engagement emails are intended to re-engage customers who have stopped communicating with your company. As a result, this isn’t so much email marketing for existing consumers as it is for missed opportunities. This is especially effective for subscription cancellations, where businesses will usually make an offer to get the customer active again.
Sending gifts on special dates – On important occasions such as birthdays, email is the simplest and most effective way to send messages and many companies choose to include a free gift. Although it’s a small gesture, it shows your customers that you care, especially if it’s personalised.
Email marketing with impact
At Rawww, we offer a thorough email marketing service that covers a wide range of resources and can help you build a strategy for customer retention. From email marketing strategies and content creation to design, automation, and building, our expertise can guide your business and encourage a positive response.