Email Marketing Redefined: The 3 Keys to Customer Retention

Memorable experiences make people more likely to return when they need your products or services again. Memories are made by both good and bad experiences. You expect customers to place another order after a good experience. Yet, surprisingly, they are more likely to return after a bad experience when the issues are resolved than after an uneventful good experience. Solving the problems that contribute to a bad experience creates trust, and the more people trust your company, the more they buy

The best customer retention strategies begin with the first order and continue until the lifespan is complete. Everything that happens from the first visit to completion of the final order is part of the experience of shopping with your company. Memorable experiences make people more likely to return when they need your products or services again. Memories are made by both good and bad experiences.

You expect customers to return to place another order after a good experience. Yet, surprisingly, customers are more likely to return after a bad experience when the issues are resolved than after an uneventful good experience. Solving the problems that contribute to a bad experience creates trust, and the more customers trust your company, the more they buy.

Consistently keeping promises also builds trust. When an order is placed, fulfillment is expected. Simply fulfilling orders will not retain customers because every legitimate business fulfills orders. You have to do more to differentiate your company from the competition. Relationships retain customers. Email allows companies in high-volume business to communicate with people on a one-to-one basis. This establishes relationships. Yes, it is at a superficial level, but it serves the purpose of personalizing the customer experience and significantly improves retention rates.

Most people aren’t fooled into thinking that “[insert name here]” emails are personal. They know that is a form letter, but that doesn’t matter as long as the information included is relevant. People placing orders are not looking for best friends, they are looking to solve a problem with minimal effort. The problem may be not having the perfect outfit for the next party, the best coffee maker, a service that would make their jobs easier, or a variety of other challenges. Whatever the problem, if your company provides the solution, keeps the customer informed, and makes everything as easy as possible, people will keep coming back for more.

There are three key components to an effective customer retention strategy:

  1. Knowledge of the Customer Lifecycle—Knowing how people normally act provides insight into drop-off points and inspires ideas for keeping them from leaving. When you know how each segment of your customer base typically performs, you can recognize when someone prematurely drops out of the buying cycle.
  2. Execution of a Detailed Communication Plan—Good communication is the key to all successful relationships. Sharing information about order processing, special sales, use of products and available services contributes to customer retention because it simplifies the buying and consumption process.
  3. An Automated Reactivation Process—Reactivation must start as soon as a customer reaches the first drop-off point. When you know your customer types well enough to know when they have passed the next order point without making a purchase, you can catch them before they are completely gone. Email automation simplifies the reactivation process. Create a strategy designed to connect with customers before they migrate to a competitor.

Plan your reactivation strategy to start while people are still in the active buying cycle. Every email sent from your business to your customers should have a retention element in it, such as these:

  • Make people feel valued and appreciated
  • Solve problems before people ask for help
  • Provide value above and beyond offering low prices
  • Keep people informed throughout the buying process
  • Provide information on the use of products and services
  • Create a bond between company and customer

5 Surprising Email Metrics That Transform Businesses

Email is the most effective under-utilized marketing tool available. The instant revenue generated with each send lures marketers into the trap of sending one sale email after another. Measuring these metrics will begin the process that moves email programs from one-off promotions to campaigns designed to acquire prospects and convert them into loyal customers.

Email is the most effective under-utilized marketing tool available. The instant revenue generated with each send lures marketers into the trap of sending one sale email after another. Investing the time to create a program that builds long term relationships seems almost wasteful. After all, the low hanging fruit is easy to get and there are so many other things that need doing.

Measuring the following metrics begins the process that moves email programs from one-off promotions to campaigns designed to acquire prospects and convert them into loyal customers. The people who subscribe to emails are highly qualified candidates for long-term relationships. They are interested in your company’s offerings and have given you permission to share information with them. Providing more than the latest sale prices opens the door to unlimited potential.

  1. Acquisition—How many prospects did your email program acquire last year? What percentage was converted to customers? Email is an exceptional prospecting tool. It is low cost with potentially high return. Create a specific process designed to acquire prospects and convert them into customers. Measure it carefully so you have benchmarks for improvement. Set specific goals to insure that the marketing team’s focus extends beyond the daily revenue stream.
  2. Retention—How well are you keeping customers coming back? Who is participating in your email program? Are they platinum customers with consistent purchase patterns of regular priced and discounted items? Are they discount customers who only buy sale items? (This type may be mislabeled if you only send discount emails.) Or, are they hit-&-run shoppers who subscribed with their first purchase but have never ordered again? Knowing the retention rates and customer types helps create a program that keeps customers coming back.
  3. Engagement—Direct marketers know that motivating people to do something increases the likelihood that they will make a purchase. This is why direct mail pieces have scratch-offs, peel and stick labels, and other devices designed to motivate people to act. Email is a tool that makes it easy for people to do much more than that. It has the option for the two way communication that builds relationships. Personal messages encourage people to respond emotionally and create connections between customer and company. Strong connections keep competitors from stealing customers.
  4. Lifespan—Email customers have a different lifespan from customers acquired or active via other channels. Knowing how people behave from first purchase to last provides information that can be used to fine-tune the email program. Monitoring this data helps identify trends. Watch for course changing events that shorten or lengthen individual lifespans so you can adjust marketing and service as needed.
  5. Comparable Values—Customers acquired via the same channel who have similar activity typically have comparable value in annual sales and profitability. A wide variance in comparable value provides an early warning system before the bottom line starts dropping. If you see value inconsistencies, look for causes that include marketing fatigue, service issues, increased competition, and niche saturation.

The people who subscribe to your email program are like the ones who receive direct mail pieces or catalogs. They respond to the same triggers, so the tactics that work for direct mail work for electronic media too. Design a strategy that moves beyond sale flyers to build a loyal following. Creating an email marketing strategy designed to acquire prospects, convert them to customers, and keeps them coming back for more is simply good business guaranteed to generate a great return.

To Twitter or Not to Twitter?

Everybody’s talking about Twitter, but are people actually using it? What do the numbers say?

eMarketer estimated earlier this week that there were 6 million Twitter users in the U.S. in 2008, or 3.8 percent of all Internet users. The online marketing research firm also projected the number of Twitter users will jump to 18.1 million in 2010, representing 10.8 percent of Internet users.

Everybody’s talking about Twitter, but are people actually using it? What do the numbers say?

eMarketer estimated earlier this week that there were 6 million Twitter users in the U.S. in 2008, or 3.8 percent of all Internet users. The online marketing research firm also projected the number of Twitter users will jump to 18.1 million in 2010, representing 10.8 percent of Internet users.

What’s more, comScore — according to the eMarketer report — found Twitter.com drew 4 million unique visitors from home, work and college/university locations in February 2009, up from 340,000 a year earlier — a 1,086 percent increase. comScore also reported a surge in March. After months of double-digit growth, traffic to Twitter.com accelerated 131 percent to 9.3 million visitors for the month. That’s more than 5 million visitors since February.

Seems like everywhere you turn lately, it’s Twitter, Twitter, Twitter. The site’s growth is unreal. What’s driving such growth? Celebrity tweeters and substantial mainstream media attention, according to comScore, which added that the site ranked as the top-gaining property for the month of March.

“Twitter lets people know what’s going on about things they care about instantly, as it happens,” Evan Williams, Twitter’s CEO and co-founder, told The New York Times in an April 13 article. “In the best cases, Twitter makes people smarter and faster and more efficient.”

But things are not all rosy in Twitterville: Currently, more than 60 percent of Twitter users don’t return the following month, according to an April 28 blog post by David Martin, vice president of primary research for Nielsen Online.

In other words, Twitter’s audience retention rate, or the percentage of a given month’s users who come back the following month, is about 40 percent, according to Martin.

In the post, Martin also compared Twitter to two heavily touted behemoths of social networking when they were just starting out: Facebook and MySpace. When doing so, Martin found that when these networks were emerging — like Twitter is now — they had retention rates that were twice as high. In addition, when they went through their explosive growth phases, retention went up, and both sit at nearly 70 percent today.

What does this all mean? Twitter as well as the other social networks might not be for everyone. Some people may just not understand their power. But most of those who do use them, swear by them. They understand how these networks can become real-time marketing and customer service tools, not to mention powerful brand builders. And there’s virtually no investment needed, so as I’ve been preaching already, I recommend these sites become part of your digital marketing mix, if they’re not already.

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