Retention Marketing: Keep Your Customers Coming Back for More
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Transcript of Retention Marketing: Keep Your Customers Coming Back for More
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Retention Marketing
Keep Your Customers Coming Back For More
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Background
I have extensive experience launching and growing ecommerce email marketing programs across a wide variety of industries (apparel, cosmetics, home & furniture, baby gear, toys, pet food, security, hardware, etc.) and stores, ranging from mom-and-pop operations to Internet Retailer 500 brands.
My company, Essence of Email, specializes in email marketing for ecommerce shops.
Contact Info: [email protected]
Xiaohui “X” Wang
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Acquisition vs. Retention – the case for more retention marketing
Costs 4x to 6x more to acquire a new customer than to retain an existing customer
Ecommerce spending is on average $24.50 for new customers and $52.50 for repeat customers
On average, online retailers lose 25% of their customers every year
A 2% increase in customer retention has the same effect as decreasing costs by 10%
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Key Metric – Customer Lifetime Value
The key metric to focus on is Customer Lifetime Value (CLV)
To increase profitability, you need to increase CLV or decrease cost of acquisition (CAC)
CLV = Average order value * Frequency of purchases* Retention lifetime
This means there’s 3 ways to increase CLV: Increase average order value Increase frequency of purchases Increase retention lifetime
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The Retention Marketing Formula
A Great Customer Experience + Effective Lifecycle Communication =
Customer Retention
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Customer Experience
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Elements of Customer Experience
Purchase Experience Support, shipping, returns, price
Brand Design, copy, personality/voice
Product Quality, durability, perceived value
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Zappos – deliver WOW through service
Support
Shipping – always free shipping
Returns – 365 days, free return shipping
Brand Voice – Witty, conversational
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Bonobos – a pair of pants to leading men’s clothing retailer
Support – Bonobos “ninjas”
Shipping – free shipping
Returns – 90/365 days, free return shipping
Design – beautiful design
Brand Voice – very clever copywriting
Product – still best known for the perfect pair of pants
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Bonobos – a pair of pants to leading men’s clothing retailer
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Lifecycle Communication
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The Customer Lifecycle
Post-Purchase Period
Latent Period
Repurchase Period
Win-BackPeriod
Customer purchases
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Post-Purchase Period
Immediately after the purchase
Order Confirmation Primarily focused on transaction information Category/product banners Product recommendations
Thank You Email Coupon on next purchase/sharing Social media or other brand engagement channels Secondary CTA’s to shop
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Post-Purchase Period
Talbots Thank You Email
Zappos Order Confirmation
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Post-Purchase Period
Awaiting shipping
Shipping Confirmation Product recommendations Loyalty program
Sharing Promote sharing – social, forward to friend
Manage Preferences Get more customer data for segmentation
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Post-Purchase Period
MooseJaw Shipping Confirmation
Backcountry Create Profile Email
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Post-Purchase Period
After product received
Product Review
Store Review/Survey
Recommended Accessories
Product Manuals
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Post-Purchase Period
Kate Spade Survey Email
Sephora Product Review Email
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Post-Purchase Period
Best Buy Accessories Rec
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Latent Period
Regular email promotions Sitewide discounts, flash sales, shipping offers Content newsletters New products
Behavioral emails Cart abandonment Site browse abandonment
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Latent Period
National Allergy Cart Abandonment Email
Lime Road Browse Abandonment Email
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Repurchase Period
Re-order Reminder
Unique Offer
Product-based Recommendations Accessories New similar products Complimentary products
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Repurchase Period
Discount Beauty Center Re-Order Email
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Win-Back Period
Win-Back Series We’ve missed you Unique sweet offer + reminder Unsubscribe notice
Unsubscribe If still dormant after win-back series, then suppress
permanently or unsubscribe
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Win-Back Period
L.L. Bean We’ve Missed You
ShoeBuy Win-Back Discount Aerie Unsubscribe Notice
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Loyalty Programs
Hotels.com – free night for every 10 nights you stay
Sephora Beauty Insider – gift cards, exclusive member products, birthday coupons
REI Membership – 10% annual refund, discounts in-store, huge discounts on classes/adventures
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Now Go Make Happy Customers
It’s profitable to invest in customer retention
Email marketing is a great form of lifecycle communication
Great retention marketing doesn’t happen overnight, but you can start today, implement 80/20, and then optimize
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