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Customer Retention and Engagement: 5 Areas to Consider

by: Chris Clapham (@chrisclapham)
22 April 2016

Did you know that research shows it costs five times as much to attract a new customer than it does to keep an existing customer?

Brands spend a lot of time, effort and money acquiring new customers, but the hard work shouldn’t stop there. It’s essential to put your customers at the heart of your engagement and retention strategies, considering their individual interests, needs and behaviours at every turn.

Whilst there is much to consider when customers start their journey with your brand, there are also a lot of gains to be made and time saved through behaviour-triggered, automated messaging later in the relationship, as well as intelligent segmentation, targeting and personalisation.

Below are five areas to consider to help increase customer engagement and retention:

1) Welcome Series

Retention starts with welcoming and onboarding new customers. They’ve taken the time to sign up for your communications (and in some cases, purchase your product), so a simple thank you can go a long way toward getting the relationship started on a positive note.

A welcome series also provides you the opportunity to introduce your brand and educate new contacts on what they can expect from your communications. Tell them what your brand stands for and how to get the most out your products, create excitement, build trust, set expectations on the frequency/type of communications, and above all let your brand’s personality shine through. Don’t be afraid to have some fun!

2) Preferences (explicit – what people tell us)

Your communications don’t have to be a one-way street. Ask your subscribers what they are interested in. A preference centre can capture key information that helps you to adapt and tailor your communications to be as relevant as possible. However, avoid asking for too much information on your preference centre; after all, no one wants to sort through a list of 20 or 30 categories or areas of interest.

Instead, focus perhaps on three or four key areas. For example, you might list the types of communications and associated frequency and provide a choice, such as:

  • Daily update (daily)
  • Newsletters (once a week)
  • What’s new (weekly)
  • Monthly digest – (monthly)

Progressive profiling is another great way to survey your customers over an extended period of time, as they continue to engage and interact with your brand.

3) Behaviours (implicit – what people show us)

Behaviours can be collected from a myriad of sources, from email clicks and purchase data to mobile app and Web interactions. If you can tie this data to a single customer view using a unique identifier such as a customer ID or person ID, then you’re onto a winner. This information can be used to better segment and personalise your messaging.

A fashion retailer, for example, might target a category-based email (e.g. men’s suits) at anyone who has interacted with men’s suits content or associated category content by leveraging relevant behaviours from a variety of different sources. Alternatively, this behavioural information could be used to tailor part of an email; for example, using dynamic content personalisation or relational table data within the email template to show a hero banner relevant to the individual.

4) Scoring Models and Loyalty

Sophisticated scoring models allow you to assign a score to particular activities and weight scores based on importance, frequency and recency of the action. They provide an excellent way to gauge an individual’s affinity with a particular product or product category.

For example, imagine a car manufacturer offers seven different car models and wants to tailor emails based on the models a customer has shown strong interest in. It could construct a scoring model that would consider email behaviours, web behaviours, brochure download requests, test drive requests and any other useful interactions that can be tied to a particular model. These interactions would be scored based on the action’s importance, meaning that a website page view for a particular model would be weighted lower than a brochure download or test drive request, which show greater intent.

An accumulative score of less than 50 points might be deemed a “cold prospect,” whereas 50 to 150 points could be a “warm prospect” and 150-plus a “hot prospect.” When contacts crossed the “hot prospect” threshold for a particular car model, they could then be automatically routed to a salesperson for follow-up.

Scoring models also provide an excellent way to track and manage customer loyalty and could easily be used to drive loyalty-based communications or used in conjunction with a customer loyalty program. (Learn more about scoring.)

5) Re-engagement and Reactivation

Even if you deploy the tactics and techniques outlined above, some individuals will inevitably become inactive or un-engaged with your brand communications. (It’s not unheard of for 60 to 70 percent of a database to be un-engaged.) This is where strategic automated programs can be configured to look for early warning signs and deploy a series of messages to those contacts. This series of messages could contain incentives to tempt your customers to start engaging with your emails again and hopefully encourage further purchases.

Try and avoid approaching re-engagement and reactivation as a last-ditch attempt to reach these customers, but instead look to spot warning signs early and put a series of preventative touch messages in place to positively impact behaviours before it’s too late. This could include encouraging disengaged contacts to manage frequency/preferences and provide feedback, or it might entail presenting a timely offer to entice customers to purchase again.

Overall, the key to successful engagement and retention strategies is to always put the customer front of mind. With that foundation, you use tactics such as marketing automation, better segmentation and personalisation to help orchestrate a communication strategy concentrated on sending the right message via the right channel at the ideal time for each customer.

Learn More About Customer Retention:

1) Ebook: “15 Post-Purchase Email That Build Loyalty and Drive Revenue

2) Blog: “5 Tips for Re-Engaging Inactive Customers

3) Tip Sheet: “5 Challenges to Building a Loyalty Program — and How to Overcome Them


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