There’s so much to worry about in the marketing world—third-party cookie deprecation, changing consumer behavior, what seems like a million digital channels (you get the picture)—but our main priority never changes: keeping our customers happy.
So, let’s get back to basics and talk about customer retention strategies. These tactics can save marketers a lot of time and money but can sometimes be overlooked. When brands get customer retention right, they create stronger customer loyalty that is personable and profitable.
What is customer retention?
Customer retention is the act of keeping customers loyal to your brand, influencing repeat purchases and preventing them from going to a competitor. Companies with high customer retention offer a product or service that provides enough value to customers for the price that they don’t feel the need to stray.
According to a Gartner survey, “How Service Leaders Can Increase Customer Loyalty,” if customers receive value during a service interaction, there is an 82% probability of repurchase or renewal when presented the chance to switch and 86% probability of increasing wallet share.
This is a huge opportunity for marketers. Nurturing relationships with existing customers that know your brand, are already interested in your products or services and are to repeat purchases at a lower cost is extremely lucrative.
The best method when it comes to how to retain customers is knowing your audience, and it all starts with data. Data is one of the most valuable resources in your arsenal when it comes to retaining customers.
The proliferation of access to first-party data (from website visits, emails, mobile apps and social interactions) allows marketers to really understand their customers. But it shouldn’t stop there.
Marketers can augment this information with third-party data (like people’s interests, preferred travel locations, hobbies, basic demographics) for a holistic customer profile they can use to engage existing customers online and offline, to drive emotional connections.
When marketers use data and insights to lead their customer retention marketing, they’re also setting themselves up for long-term loyalty success with their customers.
To encourage healthy outcomes, you need to make goals achievable. To meet its goals, Walgreens turned to Epsilon, a partner for more than a decade. Epsilon enables Walgreens to harness customer data to provide personal interactions and forge deeper relationships through their digital media, their retail media network (WAG) and their 105-million-member loyalty program (myWalgreens™) increasing their sales attributable to digital media by $315 million in a single year.
People do not exist in one place. We shop in-store, we browse on our phones, we watch TV, and we consume marketing and advertising across those spaces. According to McKinsey, getting omnichannel personalization right can increase revenue by 5% to 15% across a brand’s customer base.
This can be as simple as creating messaging and campaigns that speak to the right people with products and/or services that they actually need/want. According to new Epsilon research, “The push and pull of personalization,” 91% of consumers surveyed said they see at least one irrelevant ad every single day, and 76% of respondents said they view brands negatively when they include inaccurate information about them in their advertising and marketing.
A successful retention marketing strategy begins by mapping your customer journey, then connecting with existing customers across all channels seamlessly (apps, mobile wallets, web, online and offline). That way, you’re meeting the customer where they are, and reach them with content and incentives that actually engage them. This is because an omnichannel strategy goes beyond transactional, one-dimensional discounts to instead offer personal customer experiences.
A place to start? Understanding the power of identity resolution and a connected tech stack. Mastering omnichannel marketing requires interconnectivity.
Since 2013, Dunkin’ has entrusted Epsilon with its most loyal customers. Dunkin Rewards®, their loyalty program, has 24 million members that drive 20 million+ real-time transactions per day. This program uses an omnichannel approach to create personalized experiences, including agile mail and in-app content, 1:1 messages in loyalty statements, push notifications, mobile ordering and more.
It is well known that customers who feel an emotional connection to a brand are far more valuable. Research shows that emotional decisions are often stickier than rational ones, and according to Gallup, 70% of consumer decisions—including brand preference—are driven by emotions.
One of the keys to better customer retention is relationship building that you can further by creating emotional, trustworthy connections. This means balancing the right value exchange between your brand and your customers.
Customers need a mix of emotional incentives (soft benefits that provide emotional value, like exclusive access, privileges, etc.) and rational incentives (hard benefits that provide tangible value, like discounts, etc.) to maintain their relationship with you, and ultimately, spend their money.
Great customer retention, like a loyalty program, can develop those deeper connections both emotionally and rationally. Strong customer retention programs can do this with:
Case study: Leading CPG brand
A leading CPG brand wanted to transform their loyalty program to enhance the value exchange for their customers and attract new ones to the brand. By adopting a data-first approach, they overhauled their loyalty program, deepened their relationships with customers by aligning with existing brand pillars and enhancing their rewards. That resulted in a 200% increase in daily registrations and achieved their 100% base registration goal in four months.
Truly progressive brands have evolved to look at all of their existing and new customers through a loyalty lens--not only those who are enrolled in their loyalty program. These innovators practice brand-level loyalty, using their customer retention strategies and tactics to create exceptional customer experiences, inspire passion and trust and engender long-term relationships to keep repeat customers.
Emotional connections then serve as the steppingstone to matriculate customers into a permission-based customer loyalty program. From there, the brand can glean the data and insights to deepen the relationship and deliver more personalized experiences that inspire a share of life, share of wallet, time and heart from your customers. Plus, people can feel confident that their privacy and preferences are being respected, which will keep them coming back. Customer retention, check!
No matter the size of your program, Epsilon Loyalty will help you deliver a unique, memorable marketing experience to each customer. With data at the core, Epsilon Loyalty goes beyond point-based programs to deepen customer relationships through relevant experiences.
Don’t take our word for it. Epsilon was named a Leader in the Forrester Wave: Loyalty Technology Solutions, Q1 2023.