It’s no secret that you need to invest time and money into marketing if you want your business to thrive. After all, advertising is a make-or-break factor that large companies pour millions into every year.
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What most business owners fail to realize, however, is that they over-invest in acquisition marketing. And while marketing to potential new customers is important, retention marketing can be even more valuable. So what exactly is retention marketing, why is it so important, and how can you use it to your advantage?
Acquisition Marketing Versus Retention Marketing
Customer acquisition is a critical element of marketing strategy for businesses of every age and size. The goal of acquisition marketing is to create a methodical, repeatable way of drawing new customers to your business.
Companies see new customers as the lifeblood of their enterprise, and for good reason. Like certain species of sharks that will die if they stop swimming, businesses that don’t gain new purchasers will eventually go under. Yet you can’t guarantee enough customers will come to you naturally to grow or even maintain your profits over time. Investing in acquisition marketing is one way to develop your business, and it can increase the likelihood your consumer base will keep growing.
In contrast, the goal of retention marketing is to encourage the customers you’ve already attracted to come back. Because while bringing in new customers is important, repeat customers can be even more lucrative. This is one of the main reasons smart companies pour money into retention marketing. Think about how many people already have an iPhone and yet purchase another when the latest model drops. Apple wouldn’t be the tech titan it is without retention marketing.
Just as with acquisition marketing, there are many different kinds of retention marketing strategies you can use. Below we’ll explore three of them.
1. Develop Your Presence With Regular Promotions
A common mistake, especially for new businesses, is neglecting to stay in touch with previous customers. If you’re not reminding your customers that your business exists, you’re missing out on profitable opportunities. After all, repeat customers tend to spend up to 67% more on average than new ones.
Bigger companies can do this through sheer presence: TV spots, Facebook and Instagram ads, billboards, and in-entertainment advertisements. But there are also methods smaller businesses can use that can be just as effective. A proactive way to remind your customers of your presence is to create — and promote — different sales throughout the year. There’s a good chance that customers who already enjoyed your product or service will love it even more at a discount.
Black Friday, Cyber Monday, 4th of July, back to school, or weekend flash sales — the reason for the sale doesn’t really matter. Generate hype for your business by emailing or texting previous customers about your upcoming promotions. A regular sales calendar can help reinforce your brand’s presence and give all your customers something to look forward to.
2. Rescue Abandoned and Empty Carts
On the other hand, sometimes a customer will give up on making a purchase when their cart unexpectedly empties. Perhaps they were browsing on their phone at work and went home to find an empty cart on their desktop app. Rather than tracking down the various products and adding them to their cart again, the individual simply bails on their purchase.
You can remedy this by using identity resolution solutions to identify shoppers with first-party cookies. These cookies will transform anonymous data into information you can use to contact these shoppers later on. An email or text can bring shoppers back to their original cart, saving them time and frustration — and earning your business a sale.
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3. Implement a Loyalty Program
Showing your customers your appreciation can encourage them to come back and buy again. Your customer has already chosen your business over another, so why not thank them for trusting you?
Loyalty programs are one of the best ways to help your customers feel appreciated. You’ve probably already encountered loyalty programs at various sites and stores you frequent. You wouldn’t be the first person to acquire a daily Starbucks habit because a free caramel macchiato was just a few points away.
Beyond the standard punch card, there are lots of different ways to build a loyalty program into your business. Create a profile system that accumulates points from purchases that can be redeemed for in-store credit. When a customer first buys something, send an automatic thank-you email with a discount encouraging them to come back. Offer a free product or service for referring a friend to your business who ends up buying something of their own. Effective loyalty programs offer legitimately tantalizing incentives that encourage your customers to return time and again.
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Growing With Retention Marketing
Alongside acquisition marketing, retention marketing is a vital tool to help grow your business. By developing your retention marketing strategy, you leverage the time and money you’ve already invested in customer acquisition. Stop leaving money on the table and develop your retention marketing strategy today.