We don’t need to tell you acquisition costs are still on the rise, but we will say this: budgets are going to be tight, and it won’t be practical to pay for traffic that was barely marginal in 2022. If you want to increase profitability you have to increase revenue, decrease costs, or both.
It’s time to start working smarter, not harder, to drive retention. Here are three cost-saving tips to more effectively market to your customers during a sluggish economy.
Audit, assess, optimize
Now is a perfect time to take a look at every active marketing channel you have running and cut out anything not working. We’re no longer in a testing phase, it’s time to turn off channels that aren’t the most ROI positive.
Once you cut away all the excess, you’ll have a clearer picture of what drives revenue for your business. This added clarity will help you to actually understand the results of the channels you’re using.
Put it into practice
The first step in this process is to know what metrics to measure and the best way to track them. Defining said metrics can be a bit more complex than most brands realize. Because of this, retention metrics can remain a blind spot for brands. So what should you measure to define retention?
“For retention, we’re looking at AOV, time to next purchase, and growth on additional channels. Every business is different, so CLTV can be measured based on your business strategy and goals.” – James Reu, eCommerce Manager at LSKD
In a recent Yotpo survey, over 72% of brands are defining their retention rate as their repeat purchase rate (RPR), but that’s just one piece of what you should be measuring. Here are five additional metrics brands need to keep track of:
- Average order value
- Time to next purchase
- Churn rate
- Channel growth and engagement
- Purchase recency
With this deeper understanding of the metrics to track to evaluate your retention strategy, you can better assess the effectiveness of each marketing channel and invest in the ones that are driving the best results.
Create an interconnected strategy
Standalone products are no longer enough to help retain customers, your marketing tools need to work together. Once you’ve identified the most effective marketing channels for your business, it’s time to double down and make those specific channels even more effective by leveraging them together.
We know a loyalty program is great on its own for driving retention, but what if you were to integrate your SMS channel with loyalty? Now you’re able to reach your loyalty customers wherever they are with SMS and encourage them to take a specific action. As a result, both channels have become even more effective, and so has your overall retention strategy.
When you have multiple products running under one roof you’re able to segment within each channel to see what incentivized different groups of customers to make a purchase. Based on that information you can break those people into groups and communicate with them accordingly. Not every customer needs a coupon to convert, so stop sending blanket discounts to your entire customer base.
Start asking: What are we doing to make our customers feel important? This doesn’t have to be about deep discounting and free shipping, and it shouldn’t be. Discounts alone don’t build connections with customers and, eventually, a good deal won’t be enough to keep them around.
“Customers today expect a seamless experience across multiple channels. Connected data allows businesses to track customer journeys across each channel, enabling the delivery of consistent experiences and smooth transitions between touchpoints. This consistency contributes to better customer satisfaction and increased retention rates.”
– Tina Donati, Content & Partner Marketing Lead, Alloy
Put it into practice
Yotpo recently launched click-to-redeem, a feature that enables customers, through an SMS message, to redeem their loyalty reward. Brands can text customers to let them know they have a redemption waiting for them at checkout on their favorite, or soon-to-be favorite, products.
All customers need to do is click the link and confirm payment at checkout; this seamless experience will reduce the customer’s time and improve your repeat purchase rate.
“As we go through this time with higher acquisition costs, having loyalty and SMS so closely tied together within the same platform has been a substantial advantage in helping us with retention.” – Gian Singh, eCommerce Director at PSD Underwear
Having an interconnected strategy gives you an advantage over your competitors. The data alone is more detailed and helps to tell the customer story, allowing you to better understand your shoppers. This insight can help you create flows and messaging that drive action, increasing your ROI and even elevating your programs.
Cash in on the one-stop-shop
Now that we’ve got all of your most impactful channels working together, your brand has access to integrated data from your various tools. With the right platform, all of that data is accessible from one dashboard. Not only are you able to save time by not having to switch between products to access analytics, but you’re also saving money by bundling with a single platform.
This creates a better, more effective customer experience, all powered by your comprehensive view of each shopper. Now you can provide better experiences from the start and have an overall better impact on your bottom line.
Put it into practice
With a connected retention strategy powered by cross-product data, you’re better able to understand what incentivized each customer to make a purchase. Based on that information, you can segment and communicate with customers accordingly.
Because Yotpo’s products operate under one roof, we can drill down to see exactly what is working and what isn’t. Having one retention dashboard that pulls in every data point across different marketing efforts allows brands to get a deeper understanding of channel performance on one screen. This holistic view of your retention metrics will enable you to spot gaps in your strategy and continue to help you rule out any flows or channels that aren’t the most ROI positive.
“We needed something that could seamlessly integrate with Shopify and was easy to manage ourselves. Yotpo has developed a tool that is powerful, usable, and best of all, affordable!” – Kaben Kramer, Owner at Tenderly Rooted
While consumer purchasing power may be down, marketing spend is at an all-time high, 12% higher than pre-pandemic levels. Put those dollars to work with channels you know are going to provide your brand with the highest ROI possible. And if you’re considering investing in a marketing solution that brings your retention tools under one roof, we’d love to speak with you.
