📎 N.b. This blog post was written after our 2015 Lifecycle conference. To register for 2017's event, just click here. Thanks!
A couple of weeks ago, we invited four top ecommerce marketers to come and chat about some of the most pressing issues in customer retention marketing, as part of the programme for our most recent Lifecycle event.
The discussion brought to light a number of really interesting pointers and tips, which we thought we would share with our How to Win at Ecommerce readers.
You can watch the full video of the panel discussion at the bottom of this post, but we’ve summarised the most important lessons that can be learned from their discussion.
On the panel were:
Nicola Huet - Ecommerce consultant and ex-Digital Director at Sweaty Betty
Alex Fallowfield - Senior Online Marketing Manager at VOGA
Katie Polivka - Ecommerce consultant and ex-Senior Digital Marketing Manager at Orlebar Brown
Gregor Matthews - Head of Marketing at Finisterre
Direct mail 2.0
Turns out the way to an email-fatigued customer’s heart in the internet age can be through, well, their letterbox.
Direct mail may be enjoying something of a renaissance, but you’d be mistaken if you thought this marked a return to mass flyering and hurling bulky mail-order catalogues at anyone and everyone in sight.
No, we’re talking about direct mail 2.0, and here’s what our experts had to say about it.
Tip #1: Use online data to segment your offline direct mail
We should all be more or less familiar with the idea of using data to segment our digital marketing campaigns to make them more relevant and effective.
Applying this principle to offline marketing activities like direct mail is less common, but when we take a more holistic, customer-centric view of marketing that uses what we know about each individual customer to inform how we interact with them, it makes sense.
In Nicola’s experience, direct mail can be particularly effective when it’s aimed at carefully-defined customer segments. One segment in particular that tends to have a high response rate to direct mail (between 10 and 15 per cent) is dormant or lapsed customers.
Sending those that fall into this category a direct mail piece incentivising them to come back to shop proves particularly effective at reactivating them. And using specific discount or voucher codes can make these efforts directly measurable.
Tip #2: Back up your direct mail campaigns with online retargeting
Beefing up your direct mail campaigns with corresponding online activity (using retargeting and custom audiences on social) can be a great way of boosting conversion rates. Gregor comments:
‘When we do a direct mail blast - which we segment and offer tailored promotions based on these segments - we follow it up with retargeting, and we find that really drives up the conversion rates on that direct mail.
‘When a brochure lands we’ll go hard and fast on the retargeting for the duration of those codes, and we’ve seen great success with that.’
Lifecycle marketing strategy
Sending customers the right message at the right time in order to keep them engaged with your brand relies on having an accurate view of where they are in their customer journey. Our panel had a few tips on lifecycle-focused retention marketing.
Tip #3: Get to know your customer purchasing patterns
Purchasing patterns are at the centre of the customer lifecycle. And once you’ve cracked when you can expect customers to make their next purchase, it becomes a whole lot easier to retain them.
In particular, using purchase data to calculate the point at which you should consider a customer to be dormant or ‘lapsed’ (or indeed at risk of falling into these categories) is incredibly useful and actionable.
You can then use this information to inform reactivation campaigns - as Nicola explains:
|‘We worked out the point of lapse for our customers, and at that point we would then send them a direct mail piece or an email’.|
On top of using your data to determine repurchase rates, Katie suggests that simply asking customers when they anticipate that they’re going to purchase again can be effective, particularly with consumable products.
|‘Many customers will be willing to tell you - maybe at the checkout - when they want to buy a product again...simply asking could help you power your automation so that you’re not really bothering them and you’re being more effective’.|
Tip #4: Pay more attention to your welcome emails
A prospective customer’s initial interactions with a brand are incredibly important in defining any ongoing relationship.
And while most online retailers send new subscribers and account creators a welcome email when they opt into their mailing list, many overlook the importance of getting these communications right. Katie comments:
‘People become so occupied with sending their weekly emails out that they neglect their welcome email or series - that’s crazy because the number one most received email is your welcome programme.
'When somebody first signs up to hear from you, you have this beautiful grace period when you can send them emails and they won’t get sick of you. It’s really important that it’s something you consistently measure and improve on.’
Read more about how to craft brilliant welcome messages in this blog post.
While triggered email is undoubtedly an important weapon in a retention marketer’s arsenal, online retailers should not overlook the power of their organic social channels.
After all, you can only send so many emails before a customer gets bored or annoyed (or both). Increasing the number of touchpoints that they have with your brand - especially in less intrusive channels like social - should be part of your retention marketing strategy.
Tip #5: Work on your visual social network following
Visual social networks like Pinterest and Instagram can be great retention channels for many online retailers - particularly those in fashion, beauty and homeware sectors.
Alex shares her experience:
|‘For us, being a furniture company, lifestyle imagery and inspirational images are really important and, with that, social works really well.'|
For her, Pinterest and Instagram lend themselves very well to showcasing these kinds of images, and they see a lot of repeat engagement on pictures that they post. When it comes to retention, she explains:
‘We try and pull people through from our emails to Instagram. With email it’s difficult to have people constantly opening and reading, but we do get people coming back time and time again through social.’
Data-informed discounting and promos
Discounting strategy is somewhat of a contentious topic amongst ecommerce marketers and merchandisers.
With brand image, customer expectations, stock management and a whole host of issues at play, how should online retailers approach discounts and offers from a customer retention perspective?
Tip #6: Use targeted discounting for customer retention… but only if you need to
Gregor explains how he tries to take the long-view in avoiding over-use of promos and discounting:
|‘If we bring the customer into the equation, and marketing and product align to this customer and we do a good launch of a product that the customer wants...we want to be in a place where it sells at full price and we don’t need to rely on discounting.’|
Nonetheless, used wisely, promos can be an effective customer retention tactic, especially when it comes to triggered campaigns:
|‘If a customer is looking like they’re leaving the business, a targeted promo is maybe what it takes to get them back across the line again.’|
Tip #7: Be wary that discounting to get rid of old stock can impact retention
Sales and promotions are often used by online retailers as a means of shifting old stock. Nonetheless, this can have an unwanted effect on customer retention, as Katie explains:
‘It depends on the brand, but some companies might find that they’re left with product that they’ve had high returns on, or that just didn’t sell well because people don’t like it.
‘There’s a danger in trying to acquire customers by pushing promotions on things like this - if that’s a customer’s first experience of your offering, the chances they might come back are lessened. You can be left in a dangerous situation where people don’t expect to pay full price anymore, or where they’re not as in love with your brand as people buying the best things’.
Having a detailed view of who your customers (and in particular, your best customers) are is a vital part of creating an effective customer retention strategy that foster long-lasting brand relationships. Our panel had a few tips on getting to know the customer better.
Tip #8: Talk to everyone in the business
Customer retention often sits with marketing and ecommerce teams, but often other parts of the business can provide vital insight that retention marketers should incorporate into their strategies. Katie comments:
‘When I was at Orlebar Brown, I started talking to the retail store managers about who our customers are, and what they’re like. It completely blew me away and gave me so much more to work with in terms of really understanding who I’m talking to in the online channel.
‘The whole company had something to say - everybody had either met our customers or had got to know them online by listening to what they were saying.’
Tip #9: Look beyond numbers when judging the impact of your marketing actions
This kind of cross-departmental communication is also incredibly useful in flagging up issues that are affecting customer satisfaction - which plays an important role in retention.
For Katie, speaking to customer service was a great way of telling how customers were reacting to her marketing campaigns.
|‘All I would see was a number - I’d send out an email and see revenues go up and think ‘this is amazing!’, then customer service would come to me and say ‘this is glitching’ or ‘people are annoyed because you emailed them a couple of days ago’. So customer service is hugely central to retaining customers’.|
- Creating a framework for tracking where your customers and prospects are in their journey with your brand is important for informing an effective retention strategy. At its most basic, these lifecycle stages should include:
- Prospects who aren’t yet customers
- Active customers
- Customers at risk of lapsing
- Lapsed or dormant customers
- While email is an important tool in customer retention, don’t neglect other channels like direct mail and social.
- Test and optimise your triggered emails.
- Discounts and promos - when used carefully - can be a great way of reactivating lost customers.