Customer Retention is more important than Customer Acquisition

Customer Retention is more important than Customer Acquisition

Retaining your customers is a key aspect of your business. Without a doubt, converting leads to customers is a hard process – but your efforts can pay off if you focus on the ultimate goal – retention.

When we think about marketing, our minds often jump to lead generation tactics that attract new customers. But marketing isn’t only about bringing in new business.

If you want to build a thriving business, you need to take care of your biggest assets – Customers.

Sadly, most businesses are obsessed with lead generation – but careless when it comes to customer retention. How sad?

Considering that loyal customers will always come back for your products and services, obviously, they’re your best business asset.

Customer retention might be even more important than customer acquisition. acquisition creates a foundation of customers while your retention strategy is how you build customer relationships and maximize revenue for each one.

Let’s look at why this might be true.

What is Retention Marketing?

It focuses on bringing back customers who have already done business with a brand and keeping customers who are already connected to a brand.

The goals of retention marketing aren’t to increase the number of customers but rather to:

  • Increase customer return rates and bring past customers back into the buying cycle.
  • Decrease customer churn rates and keep existing customers in the buying cycle.
  • Drive purchase frequency and get customers to enter the buying cycle more often.

Why customer Retention is smart marketing strategy?

For new and growing brands, it makes sense to focus most of their marketing plans on customer acquisition. But once a brand has a solid customer base, they need to shift their strategy and put more attention into customer retention.

  • Increasing customer retention rates by 5% can increase profits by 25% to 95%
  • Brands have a 60% to 70% chance of selling to an existing customer versus only 5% to 20% enhances of selling to a new customer.
  • It can cost up to 5x more to acquire a new customer than to keep an existing one.
  • People who have already bought from your brand are more likely to return and spend three times more per visit.
  • When you have happy brand fans, they turn into brand advocates.

But how do you get started?

The following are some ways that you can retain past and current buyers through customer retention strategies and marketing tactics.

1.Advocacy

If you’re passionate about helping people live healthier lives, then set up an advocacy program. Your customers feel good when they can contribute to a good cause, and that bit of sunshine rubs off on your brand. 

2. Daily Deals and coupons

This strategy gives customers an incentive to shop with you again, instead of with a competitor, as they know they’ll find something at a bargain price. It creates urgency, which fuels impulse purchases, because they know the deal is temporary.

3. Exclusivity

Create an exclusive “club” or membership to make your repeat customers feel like they have access to something others don’t.

4. Loyalty Programs

Think of that punch card from your favorite coffee shop in your wallet. This helps keep the shop top of mind, giving you a nudge to visit and collect another star. There’s a rush when you get the perk, too, creating a happy customer experience all around.

SEMrush

5. Email marketing

Despite the deluge of emails people face every day, they still love to hear from their favorite brands. If you use content marketing, email newsletters are an excellent channel for letting customers know you’ve published new material in your blog. And consider emailing discounts to your customers. 

6. Referral Bonuses

You see referral bonuses in both B2C and B2B customer loyalty programs. If you’ve used a grocery delivery service, for example, you might get offered $10 to refer a friend — and the friend saves money, too! Likewise, businesses can offer bonuses to customers who recommend their products or services to colleagues.

7. Personalization

Top retailers enlist personalization to provide a great shopping experience. Personalization can also be effective in B2B customer retention strategies. One example: emails that use the recipient’s name.

8. Retargeting

This digital marketing tactic brings the shopper back to complete the transaction when they might have otherwise forgotten about it. And there is no doubt that it works. 

9. Exceptional service

Exceptional service also has the power to bring customers back.  So, from the very first purchase, extend the best customer service experience you can. There are plenty of ways to do this, from personalized confirmation emails to remembering the customer’s name when they return to your shop.

Acquisition marketing is what pulls audiences into your purchase funnel and drives them to become new customers and buyers. This is an important part of marketing, but it’s just the beginning.

You also need to use retention marketing to keep customers in the buyer’s cycle and encourage them to return again and again. Focusing on the full customer lifecycle is how your brand will increase revenue while expending fewer resources, money, and time.

With well designed client retention strategies, you can understand your customer needs and improve loyalty. You have to deliver extraordinary customer service and develop interpersonal courtesy to treat customers positively.

Make your customers feel they are part of your business by taking their opinions. Implement their suggestions and acknowledge them to achieve the customer success they deserve.

What customer retention strategies do you think work best for your business? Please share it in the comment box!

The Key Marketing Metrics, that you should always keep track

The Key Marketing Metrics, that you should always keep track

As a Marketer, It can be difficult to determine what are the key marketing metrics you should be tracking for your business in the Digital Platform. Should it be Page-views? Click-through rate? Time on-site? Or something else.

Well, in this post, I’m talking about some of the key metrics, that you should consider while tracking your marketing activities.

1. Bounce Rate:

Your bounce rate is an important marketing metric because it tells you the percentage of visitors that viewed one page on your website then left (“bounced”) without taking any further action.

Bounce Rate is important for three main reasons:

  • Someone that bounces from your site (obviously) didn’t convert. So when you stop a visitor from bouncing, you can also increase your conversion rate.
  • Bounce Rate may be used as Google Ranking Factor, it is closely correlated to first page Google rankings.
  • A high Bounce Rate lets you know that your site (or specific pages on your site) has issues with content, user experience, page layout

The height of your bounce rate and whether that’s a good or a bad thing really depends on the purpose of the page. If the purpose of the page is purely to inform, then a high bounce rate isn’t a bad thing.

If the purpose of a page is to actively engage with your site, then a high bounce rate is a bad thing.

This marketing metric can also reveal gaps in your website’s marketing funnel since visitors are not being directed deep enough to convert. This can impact other metrics like your conversion rate also.

If your website isn’t optimized properly for both technical and on-page SEO, you may be losing visitors due to long page-loading times, bad landing page, broken images, 404 errors, or published title tags and meta descriptions that don’t describe the page content accurately.

2. Conversion Rate:

Conversion rate is the percentage at which you turn visitors into buyers and paying customers.

Depending on your business goals, a “conversion” could be almost anything,.

But here are a few common types of conversions:

  • Making a purchase
  • Submitting a form (contact us form, lead gen form, etc)
  • Calling your business
  • Engaging with your online chat
  • Signing up for a subscription (either paid or free—like a newsletter)
  • Registering on the site
  • Downloading something (software trial, eBook, mobile app, etc)
  • Using something (new/advanced feature on your software or app, simply using your software/app for a certain amount of time)
  • Upgrading their service
  • Engaging with your site in some way (time on site, repeat visits, number of pages visited)

The easiest way to convert visitors is through content. And all content should prompt users in some way to become a buyer. To direct the visitor toward a conversion, all content needs to include a direct path to the conversion with clear Call To Actions (CTAs).

Calculating conversion is actually fairly easy. All you have to do is divide the number of conversions you get in a given time frame by the total number of people who visited your site or landing page and multiply it by 100%.

Conversion rate = (conversions / total visitors) * 100%

Here are a few different types of conversion rate you can use and ways you can use this data to examine performance:

  • Overall conversion rate : How well does your website convert traffic from any source?
  • Marketing channel conversion rate : Is Google Ads traffic or Facebook Ads traffic more likely to convert?
  • Page-level conversion rate : Which of these pages is better at converting traffic?
  • Campaign conversion rate Did my targeting changes improve anything?
  • Individual ad conversion rate Do I need to change my ad copy? does this ad drive more qualified traffic?
  • Keyword conversion rate : Which keywords deserve more budget?

If you have a high conversion rate on a particular piece of content, it can help guide your decision to create more topics in a similar vein or expand your efforts to promote the piece.

Create your Web Presence with Namecheap

3. Qualified Leads:

A qualified lead is someone who may be interested in buying a product or service from your company.

These are promising leads who are curious and considering you, but they haven’t quite made the step into a sales conversation yet.

This is also one of the key marketing metrics because those qualified leads are more likely to be receptive to a sales pitch than a normal lead.

If you think about your own buyers’ journey, it would be pretty rare that you submit your real email address unless you’re open to starting a conversation.

A qualified lead is judged to be interested in your products and/or services, and you may offer a solution to whatever it is they need.

Examples of Marketing Qualified Lead actions:

  • Downloading trial software or free e-book
  • Using software demos
  • Filling out online forms
  • Submitting an email address for a newsletter or mailing list
  • Favoriting items or adding items to a wish list
  • Adding items to the shopping cart
  • Repeating site visits or spending a lot of time on your site
  • Clicking on an ad to find your site
  • Contacting you to request more information

These represent some of the most common actions, but this is not meant to be a comprehensive list. 

The best way to figure out what is and isn’t a qualified lead for your business depends on a whole lot of other information like lead scoring, analytics, product delivery, and demographics.

It’s a start, however, to finding sales-ready leads and weeding out those leads who are simply unlikely to ever commit to a sale.

There are different analytics tools, that can help us to attribute qualified leads with the source traffic

SEMrush

4. Return On Investment (ROI):

ROI is calculated using two primary metrics: the cost to do something, and the outcomes generated as a result.

The standard answer to “how to calculate ROI” is a formula:

(Attributable Sales Growth – Marketing Cost) / Marketing Cost = ROI

ROI is a marketing cost is any incremental cost incurred to execute that campaign (i.e. the variable costs). This includes:

  • Pay-per-click spend
  • Display ad clicks
  • Media spend
  • Content production costs
  • Outside marketing and advertising agency fees

Your ROI tells you how much money you’ve spent on a marketing campaign versus how much revenue it’s brought in.

It is not easy to calculate revenue generated for all marketing activity. Certain tactics like social media, content marketing, video, and display ads for a targeted audience starts long before a purchase takes place.

Just because a marketing activity can’t be measured perfectly, it doesn’t mean it shouldn’t be considered.

Marketers who aren’t serious about tying their activity back to revenue are missing the bigger picture.

This marketing metric ensures that your marketing efforts are profitable in order to contribute to a company’s bottom line.

It also confirms you’re doing the right type of marketing and targeting the right people.

5. Word of Mouth:

Word of Mouth is a key marketing metric that helps your business determine how much exposure your brand is receiving.

The primary goal of looking into your word of mouth is to gain insight into the overall visibility of the brand.

Essentially, is it is free advertising triggered by customer experiences—and usually, something that goes beyond what they expected.

Word-of-mouth marketing can be encouraged through different publicity activities set up by companies, or by having opportunities to encourage consumer-to-consumer and consumer-to-marketer communications.

Understanding the level of exposure your brand has among competitors is an integral piece for building your marketing strategy.

If you’re looking to increase your word of mouth, you have to raise awareness of your business name and the product or services you provide. One way to do this is to create educational blog posts that provide value to your target market.

Well, these are all key marketing metrics, that should always keep track while doing any of your digital marketing activities.