Increase Customer Retention Rates with Targeted Messaging

It used to be that companies would send out the same message to each of their customers. As time went on, they realized that grouping their customers made it easier to target their message. This made for more relevant and profitable campaigns. The by-product of this turned out to be an increase in customer retention rates.

marketing strategy to increase customer retention rates

Why would targeted marketing increase customer retention rates? When an individual receives a personalized message or offer, there is a good chance that the message will strike a chord. This connection cuts through the information overload of today’s marketing tactics. Keep it simple and direct and make it relevant to the client’s need. This is critical to gaining and retaining customers.

How to Target or Separate Your Customers

One way to separate customers is by lifecycle stage. First, there are your new customers. These people have just made their first purchase and have not yet developed trust in your company. Their experience directly affects their future behavior.

Second, you have your established and active customers. These are the people who have come back and re-engaged with your site past the initial buy. A level of trust has been built between them and your company.

The third segment of customers are the inactive ones. These people have purchased from you in the past but have not engaged recently. It is unknown what caused the breach and whether or not trust is an issue.

Target Your Message to Increase Customer Retention Rates

You need a different message for each of the three segmented groups. Your new customers will only become lifelong customers if they have a good experience. A targeted marketing message might include extra benefits or bonuses. Both these items make them feel welcome and appreciated. Try to incorporate a “benefit” that calls them back. This should help with customer retention.

The second group, your active customers can be further segmented into three sub-groups. Your first sub-group are those that place a lot of orders and spend a lot of money. Obviously, this is a prime group of customers. You want to treat them like VIPs and keep encouraging them to come back.

A second sub-group of active customers are the ones who make fewer purchases but spend a great deal of money each time they make one. A targeted message might encourage them to visit your site more frequently.

Your final sub-group would be those who spent (notice past tense) a lot of money but have been gone for a while. These are the ones you are in danger of losing. A targeted message with aggressive offers can improve this group’s customer retention.

Customer Retention Efforts Begin with the First Order

Don’t wait until your customer slides into the third, inactive group before you begin targeting them with offers. The moment a person makes the leap from prospect to client, you need to begin a retention campaign.

Use targeted email campaigns to make them feel appreciated. Entice them with offers to encourage repeat business. Make sure your message fits where they are in the customer lifecycle. Remember, by segmenting your customers into groups, you can tailor your messages to meet their individual needs. Build trust and increase customer retention. If you can do these things, you will have a profitable business and customers for life.

Julian Aston

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  1. […] Customer retention builds your business through relationship development. Finding new customers is both expensive and hard. The easiest way to maintain your business and continue to grow is to keep the customers you have. Trying to build on top of an eroding base is like building a house on sand. You need a strong foundation. In short, you need to cultivate life-long customers. You must focus on customer retention. […]

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