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Case Study

Retaining Customers With Post-Purchase Marketing Automation

Retaining Customers With Post-Purchase Marketing Automation

Offering a full range of benefits, from increased loyalty to higher spend, post-purchase marketing automation is a great way to convert once-off shoppers into loyal customers.

A December 2013 survey done by Harris Interactive on behalf of Lisrak showed some interesting trends in US digital shopping. 81% of respondents said that they were more likely to make additional purchases as the result of targeted emails. 82% stated that they were also happy to receive more emails from retailers, with seven in ten stating that they would even disclose personal information if it mean receiving relevant, personalised emails.

Another study from Bain & Company, in coordination with Earl Sasser of HBS, done by Frederick F. Reichheld and Phil Schefter of Harvard Business School, analysed the costs and profit that was produced by long-term messaging to customers over their purchasing life cycle. Researchers on this study said, "We showed that in industry after industry, the high cost of acquiring customers renders many customer relationships unprofitable during their early years.

Only in later years, when the cost of serving loyal customers falls and the volume of their purchases rises, do relationships generate big returns. The bottom line: Increasing customer retention rates by 5% increases profits by 25% to 95%.

"One reason that many businesses do not put customer retention above customer acquisition is that it takes time to forge relationships. Unlike a typical lead generation campaign, retain campaigns can take a while before results are seen. Because retention campaigns focus on loyalty, engagement and longer-term relationships, results are not always as easy to measure or see right away.

Luckily, however, this wait is definitely worthwhile. Bain & Company did a study showing that an increase of just 10% in customer retention marketing automation can yield a 30% increase in value. According to Marketing Metrics meanwhile, existing customers are far easier to target. In fact, their studies show that the chance of converting an existing customer is 60-70%, while the chance of converting a brand new customer is just 5-20%. This makes a lot of sense... people are more likely to purchase from a business that they trust compared to one they do not know at all.

There is no doubt that customer retention should play a major part in your overall marketing efforts. How exactly can you use post-purchase marketing automation though, to retain more customers and ultimately build a lasting brand loyalty? Let's take a look:

How to Retain Customers With Post-Purchase Marketing Automation

The secret to using marketing automation to retain customers successfully lies in your post-purchase timing, segmentation and messaging. Sending the right message, to the right customers at the right time is vital for any type of marketing automation. For post-purchase targeting however, it is especially important to take a strategic approach. Some simple yet effective ways to improve your post-purchase marketing automation include the following:

1. Follow up on initial purchase

Every post-purchase marketing automation campaign should start with the very first email sent after initial purchase. This email could easily be the most important one you send to customers. A carefully planned email that has been personalised according to your customer's purchase will go a long way in making them see your brand in a positive light. Done properly, this email should make your customers feel as though a real person is responding, rather than a generic email account.

The first email that your customers receive signal the start of their relationship with your business. It helps them feel as though they belong, rather than being just another customer. This email serves a number of purposes. It can be used to check in to see if your customer needs anything further, it can ask for feedback, it can offer helpful resources or tips that helps customers enjoy your product, and it can offer useful information such as return policies, contact details, typical FAQ, or anything else you want to highlight. Make sure that you avoid trying to sell to brand new customers however. This type of message should never be pushy or promotional. Instead, this message should be authentic and helpful. The result is a message that shows customers that you genuinely care about their needs.

You could craft a single message that is sent directly after your customer receives their order. Or, you could develop a sequence that begins after the order is received and continues a week or more after they have ordered. It's also worth considering your actual product. Home improvement items may not be used right away, while consumables are typically used quickly.

2. Segment your customer list

After the initial follow up email, you can begin developing your post-purchase marketing automation strategy that will target existing customers at various stages in their life cycle. The first step at this point is to segment your lists in a way that will drive maximum results from your retention strategies.

There are a few different ways that you can segment customers after they have made a purchase. While market segmentation offers benefits at all stages of your customer's life cycle, it is especially useful at the early stages. You could segment according to demographic or geographic attributes, but, if you truly want to engage on a deeper level, behaviour offers a more targeted way of segmenting your lists. Demographics and geography may have some effect on your sales.

Behaviour is often a far more relevant factor for retention however. You can segment your lists on engagement and transactions, or even take that one step further by segmenting your warm customers from cold customers as well.

Warm customers are those that have actively engaged with previous messages. They have visited your site often, and have expressed an interest in purchasing after their initial purchase.

Cold customers on the hand do not engage with your emails at all. They have not visited your site or made a purchase in a while. To segment these groups, you could choose attributes such as email clicks in the last 30 days, or purchases over a certain amount in the last month. You can then create a segment for warm customers, based on those who meet both criteria, and segment for cold customers, based on those who meet just one criteria.

What criteria can you use to segment according to engagement? For starters, you can try the following:

  • Customers who have received emails
  • Customers who have opened emails
  • Customers who have clicked on emails
  • Customers who have made a purchase from emails

Download our tip sheet to learn how you can make the most of your segmentation strategies.

3. Perfect your messaging

After you have determined your segments, you can then get onto the next step – creating powerful messages that are designed to boost retention. Marketing automation is a very effective tool in building brand loyalty and relationships. It also helps you increase your conversion rates, when done properly. Once you have welcomed your new customer with the initial post-purchase message, you need to continue building that relationship with ongoing messages that add real value.

Although your goal here is to ultimately encourage further purchases, you should not focus on promoting heavily in these emails. You will need to gain trust, which can often be ruined by rushing in to sell before customers are ready.

What sort of messages should you send, then? You could focus on content that customers would find relevant and useful. If you sell kitchenware for example, you could offer some recipes that can be created with your product, or some tips on how to clean or care for your appliance. You could also offer user-generated content, such as videos, photos and inspiring stories on how your product is used. You could also add further information relating to your company and industry, an invitation to your newsletter or blog, and even best-selling or popular products, especially if they relate to products that your customer has show an interest in previously.

If it is planned and executed correctly, marketing automation can make it easier than ever to reach customers at every stage of their life cycle. As a tool to boost customer retention and loyalty, there is no doubt that post-purchase marketing automation should be an integral part of your overall marketing efforts.

Interested in learning about how to get started with automation tools? Contact us today for more information on our marketing automation solutions.

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