Rethinking Retention: Beyond Just Emails

Not too long ago, "retention" in marketing was practically a synonym for "email marketing" or "lifecycle marketing." It was a more straightforward time, when all you needed to do was crush it on Facebook ads and enjoy those sweet, low customer acquisition costs. Brands could get away with high churn rates as long as they were growing fast enough, and a decent customer experience was enough to keep things humming along.

This approach worked wonders for many brands.Those were the days, right? The retention team was seen as the hero, fixing what the growth team’s customer acquisition couldn’t sustain. We'd just blast out emails and SMS campaigns to win back customers, and the growth team could keep on spending like there was no tomorrow. It was a good time to be in marketing.

However, things have changed dramatically. CAC has soared, especially after Apple's tracking updates, compounded by supply chain issues and inflation. The game has changed, and what worked just a few years ago isn't going to cut it anymore.

But you might be thinking, "What's the big deal? If sending out a bunch of discounts works, then why not just keep doing it?"

Here are a few problems with this approach:

1. Training Customers for Discounts: When you constantly offer discounts, you're essentially training your customers to wait for those deals. It becomes super tough to sell at full price, because people are holding out for the next promo

2. Lack of Testing: Most brands don’t test whether customers would purchase without discounts. This means you might be giving up unnecessary margins without realizing it.

3. Brand Perception: Think about it—can you name a brand you truly love that spams you with offers until you buy? Probably not. The truth is, excessive promotions can really damage your brand's reputation. It's just not a sustainable way to build a loyal customer base.

So, while some agencies might claim that sending more emails is the key to boosting sales without any long-term damage, the reality is that these spammy tactics can actually hurt your brand in the long run. 😏

Shifting to a Customer-Centric Approach

The truth is, retention is actually pretty simple. It's all about meeting your customers' expectations every step of the way. So, how can you make sure you're delivering on those expectations? Here's a simple audit you can do of your entire customer experience:

First, take a hard look at your ad copy. Are you setting realistic expectations, or are you overpromising and setting yourself up for failure? Then, make sure your landing pages match the promises you made in your ads. And don't forget about the logistics - be transparent about shipping times and make sure you're delivering on time.

But it's not just about getting the product to their doorstep. You need to deliver on quality, too. If your product doesn't live up to the hype, you'll be dealing with high churn rates in no time. And when things do go wrong, make it easy for customers to return or exchange items. Finally, offer reliable and helpful customer support to address any issues that come up.

The bottom line is, overpromising and underdelivering is a recipe for disaster. Instead, focus on making honest promises and building long-term relationships with your customers. Yeah, it might cost a bit more to acquire customers upfront, but the payoff is sustainable growth that comes from retaining customers, not just constantly chasing new ones.

Leveraging Data for a Seamless Experience

We’ve viewed retention as a “customers forgot we exist” problem instead of the reality, which is that (gasp!) your product isn’t as important to them as you’d like to think.

If they have purchased your toothpaste and didn’t repurchase, I’d imagine they are still brushing their teeth, just using a different option.

The same goes for deodorant, cookies, skin care or makeup.

They’ve filled that need or want with something else, or it was no longer interesting enough to justify them parting with their hard-earned money.

Instead of guessing and trying to sling discounts until they repurchase (or unsubscribe and file a restraining order), just ask.

If customers haven’t repurchased your toothpaste, they’re probably using a different brand. The same goes for other everyday products. Instead of guessing, ask them.

• Why did you not repurchase ‘XYZ’?

• Is there anything we could have done to improve your experience with us?

You don't have a starting point without understanding why folks are not repurchasing in the first place.

Crafting a Seamless Customer Experience: A 3-Step Approach

1. Regret Minimization

You want to make sure customers feel good about their purchase. They shouldn't be wondering if they made a mistake or feeling buyer's remorse. You can do this by sending a follow-up email that confirms their decision and provides any necessary information.

2. Education

You want to help customers use your product correctly. This is where you can share tips and tricks on how to get the most out of their purchase. This not only helps them, but it also shows that you care about their experience.

3. Extra Credit

This is where you can share your vision and mission with customers. This helps them connect with your brand on a deeper level and understand what drives you.

By splitting these components, you can ensure a comprehensive customer journey that addresses their needs and concerns. For instance, if a customer buys a product, your initial follow-up email could focus on confirming their decision and providing any necessary information. Subsequent emails can offer tips on using the product effectively, followed by messages that reinforce your brand’s values and mission.

Mapping out the customer journey ensures that each step happens at the right time. For example, you shouldn't be upselling to customers before they've even received and understood their initial purchase. That's just going to come across as pushy and annoying.

Moving Forward: The Future of Retention

In today's cutthroat market, the brands that prioritize customer retention are the ones that will come out on top. It's no longer just about landing new customers, but about keeping them happy and engaged for the long haul. This shift from short-term gains to long-term success is crucial for any business aiming to thrive.

So, take a step back, review your retention strategies, and start making the necessary changes today. Your future success depends on it.

See you next week with more insights from The Beanstalk 👋