Increasing returning-customer rates with retention email marketing

Did you know that retaining an existing customer is five times cheaper than acquiring a new one? Furthermore, businesses have a 60–70% chance of selling to an existing customer, compared with just 5–20% for a new prospect. However, 44% of companies still don’t calculate customer retention rates. In this article, we explore how email marketing can engage your existing customers and ensure effective communication with them.

How email marketing can improve customer retention

Effective email marketing helps retain customers through personalized content, timely communication, and strategic segmentation. It not only helps engage customers constantly, but also turns them into loyal advocates.

Tips for boosting customer retention through email marketing

1. Improve user onboarding

Use email campaigns to guide new users through the onboarding process, highlighting key benefits and providing training resources. An effective onboarding email series can help customers understand how to use your product or service effectively, thereby ensuring they get the most value from their purchases.

I think it’s always important to realize that email plays well with other channels. We found that focusing on delivering links to content on our website via email prior to making a big ask to register for upcoming webinars increased attendance by 100% over a year. Existing customers who are webinar attendees score high as MQL, and the Sales team loves to follow up and upsell to these segments.

2. Create an achievable roadmap with your customers

Send personalized emails to outline a realistic roadmap with milestones and goals for new customers. This not only sets clear expectations, but also helps build a long-term relationship based on mutual growth and success.

In my mindset, I try to use the following approach when working with customers — encourage abuse instead of limiting the usage. When thinking about upselling to existing customers, this is especially helpful. Customers need to see that they are getting so much value from what I’m offering that it’s a no-brainer for them to buy it. But to do that, they first need to truly believe in what they bought initially. Additionally, it’s much easier if we already build a relationship with the customer, as they will trust us more when we try to upsell them with additional services or features.

3. Use client feedback to find weaknesses and constantly improve

Implement feedback requests within your email campaigns, such as customer satisfaction surveys or direct feedback forms. Regularly gathering and acting on customer feedback can help identify areas for improvement and enhance the overall customer experience.

Building relationships with customers is my number one priority. When customers trust you, they are willing to give you a lot of feedback way before they quit. You can also use this constructive feedback to improve your product or services, better address your customers' needs, and increase retention.

4. Understand your clients with customer experience and journey mapping

Use email analytics to map customer journeys and optimize touchpoints for better engagement. By understanding where your customers are in their journeys, you can tailor your communications to meet their specific needs and preferences.

Segmentation, understanding the customer journey, personalization and leveraging our loyalty program have been the most successful ways to reach our customers. Using data to understand customer behavior and how often they come back has helped us to develop the right timing for our retention and upsell efforts.

5. Segment customers to deliver the right content at the right time

Use email list segmentation to tailor email content based on customer behavior and interaction with your brand. Segmented emails can lead to higher engagement rates, as they resonate more with recipients' interests and needs.

A customer-centric approach always wins. We might try to set expectations based on what we want customers to do, but digging into the data on what their needs are throughout the journey will best inform our customer retention strategy. What kind of onboarding do new purchasers need in the first five days? Are there existing segments of frequent buyers? Can we use what we know about them to create look-alike segmentations, etc.?

The best way to segment customers when it comes to communicating the right things is to find events in your app that help you spot both opportunities for upsell and potential risks that might lead to churn. Using such a proactive approach, you will be able to better predict when and with what you should contact your customers.

At the most basic level, creating segmentation for new and returning customers allows you to deliver either more information or less depending on how well they know your brand.

Segmentation around recency, frequency, and monetary value are also a valuable way to send promotional campaigns. Highly engaged customers are more likely to convert.

6. Use automated emails to encourage inactive users to take action

Set up automated email triggers for inactive users, thereby providing educational content or highlighting unused features to re-engage them. Automated re-engagement campaigns can help bring back users who might have lost interest or forgotten about your product.

In the last year, we have implemented personalized birthday points notifications, personalized points expiration reminders, a winback flow, and 3 upsell flows for returning customers and have experienced a 75% improvement on returning customers.

We were seeing a steady decline in our browse abandonment email last year and were looking for ways to improve performance. After adding a block of content asking customers to take our shoe finder quiz, we saw an immediate bump in our click rate from 3.12% to 4.55%. We understood that uncertainty around what size or shoe style to order to solve their foot pain issue may be a barrier and found a way to address that concern by adding content to the email.

(Source: Email from KURU Footwear)

7. Upsell to existing customers

Use email campaigns to upsell premium or upgraded services, utilizing content such as ebooks or white papers to showcase additional features. Highlighting premium services’ benefits and additional value can encourage customers to upgrade.

8. Identify customers that are likely to churn

Monitor email engagement metrics to identify at-risk customers and send targeted retention campaigns to address their concerns. Early intervention with personalized retention strategies can help prevent churn.

9. Create a personalized customer loyalty program

Develop a loyalty program and promote it through personalized emails, offering rewards and incentives for continued engagement. A well-structured loyalty program can boost customer retention and foster long-term loyalty significantly.

Loyalty programs are a great way to incentivize a returning customer to purchase again. Other successful upsells include new and returning products as well as seasonally relevant products. Ensuring they interact comes down to delivering the right content at the right time.

10. Create a referral program

Launch and promote a referral program via email, encouraging satisfied customers to refer new users with incentives such as upgrades or credits. Referral programs can expand your customer base while rewarding your loyal customers.

Types of retention emails

1. Promotional emails: Offer special deals, discounts, or exclusive offers to existing customers.
2. Personalized updates: Share personalized product recommendations, updates, or news relevant to the customer’s interests.
3. Reminder emails: Send reminders for upcoming renewals, subscriptions, or important dates.
4. Re-engagement emails: Reach out to inactive customers with special offers or content to recapture their interest.

When upselling to existing customers, the content type depends on your timeline for asking for the next purchase from your customer and the product itself. If it’s an add-on or upgrade to goods purchased, creating a sense of urgency and scarcity through a pure offer works well. If a subscription or service requires a longer runway, a “how to “ series highlighting how to level up or leverage a CTA to a tailored landing page with more tailored content can be effective.

In our next article, we analyze retention email examples in detail, so stay tuned for the sequel!

Email campaign analysis and optimization

On day 1, you need to establish how you will measure success. This can consist of high-level overall engagement metrics, but ideally, it’s mapping it out for every step of the customer journey. This allows you to plan the content you will deliver based on how recipients hit the target.

To ensure your email marketing efforts’ success, it's essential to track and analyze key performance indicators (KPIs):

1. Open rate (OR): The percentage of recipients who open your emails. This metric indicates your subject lines’ effectiveness and your emails’ overall appeal. A higher open rate suggests that your audience is interested in your content.
2. Click-through rate (CTR): The percentage of recipients who click on links within your emails. This metric demonstrates how engaging your email content is and how well your call-to-action performs. A high CTR indicates that your email content resonates with your audience and motivates subscribers to take action.
3. Conversion rate (CR): The percentage of recipients who complete a desired action after clicking a link in your email, such as making a purchase, signing up for a webinar, or downloading a resource. The conversion rate is a direct measure of your email campaign's effectiveness in driving desired outcomes.

Additional metrics

1. Unsubscribe rate: The percentage of recipients who unsubscribe from your email list. This metric helps you understand how well your content is being received. A high unsubscribe rate could indicate that your content isn’t meeting your audience’s expectations or that you’re sending emails too frequently.
2. Spam complaint rate: The percentage of recipients who mark your emails as spam. This metric is crucial for maintaining a good sender reputation and ensuring high deliverability rates. A high spam complaint rate can impact your email deliverability negatively and result in your emails being blocked or sent to the spam folder.
3. Bounce rate: The percentage of emails that couldn’t be delivered to the recipient's inbox. This can be divided further into hard bounces (permanent delivery failures) and soft bounces (temporary delivery issues). Monitoring bounce rate helps maintain your email list’s health and ensures that your emails are reaching valid addresses.

Use feedback to improve your email strategies

Regularly review and analyze feedback from your email campaigns to identify areas of improvement. Adjust your strategies based on data-driven insights to enhance your email marketing efforts’ effectiveness. Here are some ways to use feedback for optimization:

1. A/B testing: Conduct A/B tests on various elements of your emails –– such as subject lines, content, images, and CTAs –– to determine what works best for your audience. Use the results to refine your email content and improve engagement.
2. Segmentation: Segment your email list based on demographics, behavior, and preferences to send more targeted and relevant content. Personalized emails are more likely to be opened and acted upon, leading to higher engagement and conversion rates.
3. Content improvement: Use feedback to identify which types of content resonate most with your audience. Focus on creating high-quality, valuable content that addresses your subscribers’ needs and interests.
4. Frequency and timing: Analyze feedback and performance data to determine the optimal frequency and timing for your email sends.
5. Design and layout: Evaluate feedback on your emails’ design and layout to ensure that they’re visually appealing and easy to read. A well-designed email can enhance the user experience and influence the decision to choose you over others.

Wrapping up

In this article, we discussed how email marketing can help you maintain relationships with existing customers, turning them into brand advocates. Retaining customers is cost-effective and offers better conversion rates than acquiring new ones.

Experts shared valuable insights on enhancing retention through strategic email campaigns. Techniques such as effective onboarding, personalized roadmaps, and segmentation ensure continuous customer engagement and loyalty.

Stripo, with its intuitive platform, allows you to create stunning email campaigns in a fraction of the time. Start using Stripo today and experience the immediate positive impact on your retention rates.