Retention Marketing: What It Is, Strategies & Examples

Did you know you can double your earnings with repeat buyers?

According to the book Marketing Metrics, businesses are more likely to sell to current customers (60 to 70%) versus first-time customers (5 to 20%).

One of the most vital things you should learn when running a business is retention marketing.

It isn't enough to just draw in new buyers. You also want to get them to come back, but how?

Let's find out together. In this article, we'll be learning all about retention marketing, important key strategies to boost sales, real-life examples, and a tool that can help you retain clients.

What is Retention Marketing?

Retention marketing is an engagement marketing practice that focuses on increasing customer loyalty. It goes beyond the first purchase.

In other words, retention marketing implements many strategies to get repeat buyers. Customers/clients feel a sense of loyalty to a company, not just because of the product or service.

Retention marketing is all about building relationships. Once you've built a relationship with your customers, they are more likely to come back, leading to customer retention.

Why is Retention Marketing Important?

Okay, so now we know a little about retention marketing, but why does it matter? Why should you focus on finding customer retention marketing strategies?

Retention marketing is important because it is often more successful than acquisition marketing, which focuses on acquiring more customers/clients. Acquisition marketing isn't the most cost-effective method.

It also has a lot to do with retention rates. A good customer retention rate indicates your business is thriving.

Benefits of Retention Marketing

The benefits of focusing on retaining current customers are nearly endless. Listed below are a few benefits to consider when coming up with retention marketing campaigns.

Cost-Effective

Who wouldn't want to save money while also increasing their revenue and sales? Retention marketing is not nearly as expensive as you'd think.

And the cost is worth it. Even the smallest customer retention gains can increase profits by a staggering amount.

For instance, just increasing customer retention by 5% can, in turn, increase a company's profits anywhere from 25% to around 95%.

Increases Customer Lifetime Value (CLV)

A great way to increase Customer Lifetime Value (CLV) is by implementing retention marketing strategies.

CLV is an important business metric that measures a customer or client's potential value and revenue over the duration of their relationship.

Customer retention highly affects a business' CLV. The higher the CLV, the more money a business can expect to earn from the one customer. You can't get a high CLV, though, without high and consistent customer retention.

Higher Sales/Revenue

Probably one of the more obvious benefits of getting repeat customers is an increase in sales and revenue.

It is a lot easier to target someone who has already purchased your product or service than a new person.

This isn't just about repeat buyers. If a customer is loyal to you, they are likely to spread the news of your product or service.

You can earn money through referral programs and word-of-mouth recommendations. Consumers trust the words of their family and friends, so if they mention your brand, it can lead to new customers and more sales.

Upselling Opportunities

You don't just increase your sales and revenue by getting a loyal customer or client to make the same purchase.

Instead, the best clients to upsell your items to are the ones who are already familiar and loyal to your brand.

Upselling is a sales technique to convince your customer to purchase more items or an upgrade.

This doesn't have to be complicated, either. You can send out recommendations based on past purchases.

Existing customers are more likely to upgrade with a brand they know like yours.

Stronger Brand Reputation

Another benefit of customer retention marketing efforts is boosting your brand's image. When you have a strong and loyal customer base, they are more likely to leave positive reviews and generate buzz on your products or services.

A strong brand reputation is an incredibly powerful thing. It can make your brand seem trustworthy and credible.

A strong brand reputation can also even help you gain such popularity you become a household name.

Important Customer Retention Statistics

You don't have to take our word for it. Research and studies show that retention marketing tactics are important and work. Down below are key statistics to consider.

• About 74% of customers feel loyalty to a brand.

• According to Zendesk, 52% of respondents report going out of their way to purchase products from their favorite brands/companies.

• Small businesses rely on customer loyalty. Around 62% of small businesses make the bulk of their income (more than half of their revenue) through repeat buyers.

• Customer service is extremely crucial to customer loyalty. Customers who experience positive customer service are likely to spend 140% more than those with negative experiences.

• Consumers aren't afraid to jump ship. According to YouGov, 31% of respondents switched to a different brand due to product lying.

• Customer retention differs by industry. According to Exploding Topics, the industry with the highest retention rates is media (84%), while the lowest is hospitality, travel, and restaurants (55%).

9 Vital Retention Marketing Strategies

Knowing what retention marketing is - isn't enough. In order to use it properly, you need to discover effective customer retention marketing strategies. While there are way more than nine, here are just a few you can implement to increase revenue and brand loyalty.

#1 Fast Response Time

If you don't respond fast enough to a customer's questions or concerns, you may lose them as a repeat buyer. A great way to keep customers coming back consistently is through fast response time.

Consumers want to feel heard. It's not enough to just sell a product or service. You also need to find solutions to problems quickly.

The best way to do this is by offering multiple communication services. Consumers like to have options to reach out, including through social media, email, phone numbers, and occasionally even letters.

To make the process smoother and easier, it's best to implement omnichannel support. Omni-channel support allows for all communication channels to be connected through one system.

#2 Utilize Social Media

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It wouldn't be wise to fight this incredibly powerful tool.

Most people like communicating through social media, as opposed to other types of media. Not only is this a good tool for customers to reach out if there are issues, but it is a great way to promote products and deals.

Many consumers follow brands they are loyal to and purchase based on social media posts. Interestingly, customers who engage with brands on their social media accounts spend 20 to 40% more.

A quick reply in a comment section by a brand can go a long way.

#3 Personalize Messages and Emails

Who doesn't appreciate a personal touch? An incredibly successful customer retention strategy is to personalize messages.

No one wants to feel like just another faceless and nameless number, even if all the communication is occurring behind a screen.

You can retain customers by sending out push notifications for promos and events with their names on them.

Personalization doesn't just end with including their name but also details like their birthday. Birthday freebies and discounts are a great way to entice past customers to come back and stay.

#4 Encourage Engagement

Customers like to engage with companies and brands they love. A great way to retain past customers is to offer more engaging opportunities.

But how do you do this? Engagement looks different across brands and industries. If you are a small business offering business courses, you could offer virtual webinars and Q&As with live questions.

Opening the chat to the community can further push them to engage with each other.

Bigger brands that offer products as opposed to services and courses can boost engagement through social media and in-person events in many ways. They can create raffles, ask questions in social media captions, and respond to every comment.

#5 Offer Loyalty Programs

Everyone wants to save money in their pockets - this includes customers/clients.

If you can advertise ways to save money, customers are more likely to buy. But how do you get them to come back over and over again? The short answer is loyalty programs. These programs reward your most loyal customers.

Offering loyalty programs to your existing customers can keep them coming back, especially if you offer a point system with discounts. Gaining points can feel like a game, prompting them to become repeat shoppers for the potential discounts.

#6 Analyze and Use Data

Social media isn't the only aspect worth looking at - so is data. Another customer retention marketing strategy to boost retention after a customer's initial purchase is to collect and analyze data and customer feedback.

This is the best way to know what campaigns and techniques are working and which ones need some tweaking.

You can do this in multiple ways. One way is to collect the data yourself through customer satisfaction emails which collect customer feedback. Another way is to use analytic marketing tools that track things like purchases, sales, revenue, and retention.

After you’ve collected the information, you can use it to improve customer retention.

#7 Lean Into Charity

Did you expect to see charity as a mention? It is not enough to use social media, own a stellar product, or answer messages quickly.

Customers want to know their money is going to brands they trust and that have the same vision and morals as them. 

This is tricky considering how different everyone is.

To follow this strategy, you'll need to make your brand's vision and stance well-known and choose a charity to work with closely. This is one way to retain customers.

#8 Make Your Customers Feel Like VIPs

This marketing strategy is simple, but simple is sometimes best. Customers come back to your brand if you make them feel special.

Hotels do a great job of this. They frequently highlight on their websites and advertisements how their customers, you, are valued. Instead of using words like 'customer' or 'client,' which can feel cold, you can use words like 'guest' or 'family'.

Making potential repeat customers feel special also includes using exclusivity. For repeat customers, you can create VIP groups and memberships based on their past purchases.

#9 Focus on Customer Service

Last but not least is probably the most important strategy to name, customer service.

Customers are less likely to come back and repeat purchases if they were treated poorly at a store or online. If you want satisfied customers, which helps retain customers, then you need strong customer service.

This strategy is really an umbrella term for multiple actions. For instance, in order to have strong customer service, you need fast and efficient responses. Apart from this, social media plays a large role in customer service as more people turn to social media to talk with customer service agents and support.

Real-Life Retention Marketing Campaigns

So, how do these strategies look in real life? What companies are doing an excellent job of retaining existing customers using these techniques?

Walmart Social Media Comments

Companies, both big and small, are becoming masters at social media, specifically with how quickly and politely answer comments.

A company that is thriving in its responses is Walmart. On Walmart's Facebook page, it is super common to see Walmart responding to comments, both positive and negative.

Some of the responses are simple and include positive emojis, while others are a mixture of sympathetic and problem-solving.

When someone comments on Walmart's Facebook posts that they had a bad experience in one of their stores, the page replies, asking the user to DM them with more details. The response is also personalized, including the original comment’s first name.

Chipotle Rewards

There are countless companies that offer loyalty reward programs. While we could list them, the list would be never ending. Instead, we're going to showcase one reward program that does it really well - Chipotle Rewards.

Chipotle Rewards is a points-based program that is free to sign up for. Each purchase provides users with points.

Just for signing up, you also get a free side of guac on your next order. The points you rack up from each purchase can be used to redeem awards like a free burrito, drink, chips, and a side.

Chipotle Rewards marketing does a great job of drawing in people for its colors, symbols, and verbiage. It uses words like 'exclusive' to drive up interest.

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The Hot Topic Foundation

To some consumers, brand image and vision is incredibly important. They want to know that the companies they are buying from have similar, if not the same, views as them.

Believe it or not, customers pay attention to companies and their charities and donations.

Hot Topic does an excellent job of clearly showcasing its values and donations with its very own Hot Topic Foundation webpage. This webpage clearly defines the foundation's mission statement.

The website also clearly emphasizes what their donations and programs provide. This includes $1.2 million in grants and 5,952 minutes of life-saving support to the Trevor Project.

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Marriott Bonvoy’s Home Page

Marriott is subtle in their marketing techniques, and yet it works. Sometimes, all you need is some friendly copy on a website to make you feel special, appreciated, and like a million bucks.

On Marriott's website, when you search for hotels, the search bar states, "Where can we take you?" This simple question matters a lot more than you think. It's friendly and casual and establishes a relationship between the customer and the brand.

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A Potential Retention Marketing Solution for Your Business

Customer retention has never been easier than with online community platforms like Swarm. 

It’s one of the best community platforms for coaching because of its video-focus. While there are many options to choose from, Swarm is the best option for customer retention because of its video-centric features and vision.

Swarm's video integration is seamless. The community platform has a much-needed human touch that can make you feel like you're talking to community members and course directors in person.

A platform like Swarm can aid with retention with features like live streams for your audience, the ability to send individual video messages to a member when responding to a question, or even something as simple as an automatic transcription for all videos and voice messages.

Wrapping it up

Overall, retention marketing is one of the most crucial parts of building a business and boosting sales. It doesn't hurt to try customer retention marketing strategies, especially since they are cost-effective when compared to customer acquisition costs.

These strategies have multiple benefits including increasing customer loyalty, revenue, and the potential to bring on new clients with a referral program  or upsell.

You also don't have to do this on your own. One of the best ways to increase customer retention is by building community. What better way to build community with clients and customers than using an online community platform with a human touch like Swarm?

To get started, check out Swarm's website or sign up for a 14-day free trial. The free trial is a great way to discover all of Swarm's features. You won't be disappointed.