Retention Marketing is a strategy that focuses on bringing back customers who have already purchased a product from you or had been a previous customer and continually keeping your existing customers connected to your business.
The objective of retention marketing aren’t to increase the number of customers but rather to:
- Grow your customer return rates and bring back previous customers into the buying cycle.
- Lower the percentage of customers not coming back and retain current customers in the buying cycle.
- Increase purchase intensity and drive customers to enter the buying cycle frequently.
Why Retention Marketing is a Smart Strategy
For small businesses, it makes sense to focus most of their marketing plans on customer acquisition. Once a small business has a solid customer base, they need to alter their strategy and increase attention into customer retention.
Without a retention plan, all of the marketing strategies in the acquisition phase are for nothing. A small business may work hard to get customers but then lose them by failing to re-engage and remarket to them. This loss of customers is a costly mistake, as retention marketing is proven to boost revenue while using fewer resources than acquisition marketing.
Keeping existing customers increases profits. It pays to keep customers around. Increasing customer retention rates by only 5% can increase profits by 25 to 95%.
Selling to existing customers is easier than selling to new customers. Brands have a 60% to 70% chance of selling to an existing customer versus only a 5% to 20% chance of selling to a new customer.
Happy, existing customers help you acquire new customers. When you have happy brand fans, they turn into brand advocates. This helps lead other customers to your business because customers often trust and take recommendations from friends.
Credit to: Alexa.com