Customer retention strategies: using email marketing to reduce churn
Every business owner knows how difficult - and expensive - it can be to acquire new customers. In fact, it costs around a third of a customer’s lifetime value just to acquire them!
Given how much your business has invested to acquire your current customers, reducing churn should be just as important to you as acquiring new customers. Read on for the most effective retention strategies you can implement, even without a robust sales or customer service team.
How to lose a customer quickly
Your customers will know if you’re not prioritizing them.
Picture this: you’ve subscribed to a service that you can’t get support for, prices increase unexpectedly without value being increased, you don’t know anyone else using the service, and you start to see ads for a competing product that it feels like everyone on your social feed is trying out.
You try to call your service provider but can’t find a phone number that connects you to a real person. You get an email notification that there will be product maintenance that feels like it was sent from the engineering department.
It starts to feel like you chose the wrong service provider. You feel like you’re on an island and can’t remember why you ever became a customer.
In the scenario above, it's clear that you're not prioritized. Why would you stay?
Why prioritize customer retention strategies?
Obviously the scenario above is one that no business owner wants to be responsible for. But if your team is lean and you just don’t have the budget for a dedicated marketing professional, it can be easy to develop tunnel vision, with a focus on new dollars. Creating a positive, supported customer experience can easily drop into the “nice to have” category.
But with a few intentional touchpoints throughout your customer’s lifecycle with you, you can continue to build trust and affirm that they’re in the right place. All things that make your offering more sticky.
Effective customer retention strategies will:
Ensure your existing customers feel like your priority
Make them feel like they’re on the “inside” at a great company
Empower them with resources and support to make the most of your solution
Encourage customers to give positive reviews & testimonials for you to use in your acquisition efforts
“The bottom line: increasing customer retention rates by 5% increases profits by 25% to 95%*”
How to use email marketing to reduce churn
While personal calls and live trainings by sales and customer service are impactful, you can make the most of limited resources by supporting your customers with automated email marketing campaigns. With email, you can deliver resources, show appreciation, invite customers to in-person or online events, and ensure they always know how to get in touch with you.
All without having to hire a customer service team.
The three most important customer retention areas to focus on are:
Onboarding
Most importantly, you can increase customer retention by creating a comprehensive onboarding experience. Through onboarding, you can ensure that new customers have everything they need to make the most out of your offering.Despite what others recommend, you can fully support your new customers even if you don’t have a team of professionals to guide them through the onboarding process. Pre-recording welcome and training videos can accomplish much of what a personal call from customer service can, and delivering those via email can ensure that you’re able to pace out how much information you deliver and when.
Tutorials, guides, and important reminders can all be delivered automatically via email to your new customers, as well as early feedback so you can quickly act on any problems a new customer might be facing.
Regular check-ins
Plan to check in with your customers periodically so they can share their feedback directly with you. Just like in onboarding, if you’ve created an automated email program that touches base with your customers, you can address any problem areas before they lead to a lost customer.Address inactivity
You can also design email programs that provide support when a customer shows signs of inactivity, or when it’s been an extended amount of time between purchases. If you understand your customers and what the ideal behavior looks like for success (i.e. fully utilizing what you offer), you can proactively address the inactivity with an email marketing campaign.
Completing your retention strategy
Even if you feel overwhelmed by the idea of creating curated lifecycle email marketing programs for each phase of your customer’s journey with you, you can easily build out automations that:
Celebrate milestones like birthdays or number of months/years working with you
Make sure they have early access to all new products or features (rule of thumb: if you’re planning to make a big splash about a new tool or feature externally, make sure your current customers are the first to know. Their loyalty made your growth possible, after all!)
Invite them to share their success with you. Be sure to acknowledge or even reward testimonials or survey participation.
Where to start
Many small businesses don’t have the bandwidth to get a full lifecycle strategy in place to support and retain customers all while running their business and fulfilling contracts. This isn’t an all-or-nothing strategy. Getting started with small steps is better than never starting at all.
Follow this framework to start building out your customer retention strategy with email marketing:
Prioritize the onboarding experience
Customers can’t become loyal if they never have a successful experience with your company in the first place. Map out the resources, materials and videos you need to create in order to deliver a great onboarding or welcome experience that will set your newest customers up for long-term success.
Identify the problem areas
Where are you losing most of your customers? Is it after the second purchase, or the fourth month? Take the time to dig into your customer data and solve for the most vulnerable moments in their journey. Find out what’s happening, and create experiences that will guide your customers through.
Learn from your customers
Ask customers what they value most from you and what their wishlist items are, ask former customers why they left, and use those insights to ensure you don’t have any blind spots. If you don’t know there is a problem, you can’t solve it.
Outsource where needed
If customer retention is a priority, but you simply don’t have the bandwidth to create the email marketing programs to deliver a great customer experience, let’s talk. You don’t need to hire an expensive agency on a monthly retainer to access marketing expertise. We specialize in project-based work that is accessible to most small businesses who are ready to put email marketing to work for them.
*source: Harvard Business Research
