How DTC Brands Can Use Email and SMS Marketing to Increase Retention and Subscriptions for 2021
Editor’s Note: This article is a guest contribution from John Surdakowski, founder at Avex, a New York City based e-commerce & email marketing agency for fashion and lifestyle brands.
The holidays are a great time to be a direct-to-consumer (DTC) brand selling via ecommerce. Customers are eager to find fun and interesting gifts for themselves and others, and plenty of people are interested in trying new things.
To take advantage of this, you’ve put in a lot of work. Your marketing strategies have been successful. You’ve brought in new customers at a rapid pace, and you’re ready for what’s next.
At this point, you’ve basically made it through the holiday shopping season. Congratulations! Now let’s see what you can do to retain those customers and turn them into brand loyalists.
Retention is all about keeping your current customers with you for the long run. It’s much more costly to bring in new customers than to remarket to and retain existing customers—more than five times more costly, in fact.
You can use the customer information and trends you’ve discovered during this holiday season alongside email and SMS to build 2021 customer retention strategies that increase sales and decrease customer acquisition cost (CAC).
The holiday season is over. What now?
Black Friday, Cyber Monday, and the holiday season as a whole are an excellent way for DTC brands to bring in new customers. But while bringing them in is important, what’s critical is to retain them through meaningful, worthwhile engagements.
You’ve spent a lot of effort and time over the holiday season enticing holiday shoppers to your website. These customers have used your discounts, accepted your offers, and brought your products into their lives as gifts for themselves and their families. You’ve collected information from these customers in return from their actions and behaviors.
Now is the time to use all the customer data you’ve gathered to become a truly great 2021 ecommerce strategist. The purpose of collecting holiday customer data is to leverage it in meaningful engagements down the line and encourage customer retention. With email and SMS marketing strategies, you can keep customers interested in 2021 long after the holidays are over.
How to use post-holiday segmentation
When it comes to keeping these customers engaged, segmentation is key! Segmenting (or grouping) your customers or gift-card recipients based on what they’ve purchased will help you send them emails and text messages that are relevant to their interests.
According to a Klaviyo case study, Taylor Stitch, a high-quality men’s and women’s clothing brand, “skyrocketed revenue per recipient (RPR) by 60 percent with sophisticated segmentation.” By cutting half of emails sent, but sending those emails to dynamic customer segments, they drove the same amount of traffic to the site and decreased unsubscribes by 60 percent. Quantity does not equate to quality.
Avoid sending email or text blasts to your entire contact list. Even in the most niche business, unfocused emails increase your risk of customers unsubscribing. It will also reduce your metrics significantly since few customers will open an email that’s not relevant to their interests. Even if they do open it, they’re unlikely to convert.
To make sure every email you send provides value to the customers who receive them, make sure to first create dynamic segments based on the customer information you have. Then personalize emails to resonate with that segment. This may include using specific types of imagery and copy, using a certain layout, and suggesting products that are similar or complementary to past purchases.
Segmentation can also help you broaden the interests of customers you retain. For example, many brands have a hero product—your bestseller, the one product that defines your brand and tells new customers what your brand is about. A hero product also turns first-time purchasers into loyal repeat customers who believe in your brand.
With the trust you built through the hero product, you can encourage customers to buy other products through a segmented campaign that’s tailored to include only people who have bought that star product.
Creating targeted flows and campaigns to reach these customers not only helps you leverage your current clients, it also increases their average order value (AOV) and their customer lifetime value (CLTV or CLV). Customers who receive email campaigns spend 138 percent more than customers who don’t—that’s a significant increase per purchase!
Of course, even with the best campaigns, some of your holiday customers will remain holiday customers. On the other hand, the right campaign can pique the interest of others and lead them to continue shopping with your brand throughout the year. You can build a better understanding of which clients convert to regular customers by incrementally testing and optimizing your communications with them.
How do you test? What do you test? How can you use this information in the first place? Keep reading to learn more.
How to use email and SMS to increase retention and subscriptions
There are four excellent strategies you can use to convert holiday buyers into year-round shoppers. These strategies help you keep your customers interested even when they aren’t being fueled by the holiday spirit.
Segment, segment, segment!
If you created segments prior to the holiday season, that’s great. If not, it’s no big deal. You can segment your customer list at any time if you have their shopping behavior collected.
Segmenting your customer list by specific behaviors can help you understand your customers’ preferences. Look at your data for trends, then you can create specific communications for each segment. This is a great opportunity to retarget customers who have stopped engaging with your brand, too.
Some segments can revolve around:
- Purchase history: What type of products did your customer buy? Was it for themselves? Gift baskets, gift cards, or products shipped to addresses that don’t match their billing address are more likely to be gifted.
- Revenue: How much did they spend? Was it a low-value or a high-value product?
- Email engagement history: Which emails did they open? Which emails did they click? Were they new arrival announcements? Restock notifications? Newsletters? Style guides?
- Gender: If your brand offers gender-specific products, it’s a good idea to send emails that are gendered appropriately. Someone may have purchased products for the opposite gender as a gift, so the buyer’s gender is an important piece of data to collect.
As mentioned early, segmenting your emails can make all the difference. Klaviyo has found that ecommerce companies with more highly segmented lists bring in more revenue per email—up to $0.21 more per email sent. That’s two to three times higher than brands with less segmented lists.
After you’ve created your segments, it’s time to create personalized emails that resonate with those segments. Personalizations can revolve around:
- Imagery: What type of imagery does your segment react to? Full-bleed lifestyles? Contained studio shots? Minimalistic and clean product images?
- Copy: Do your customers find value in longer description copy or does a witty headline suffice? Do they prioritize imagery over copy?
- Content: What type of email has this group of customers interacted with the most? New product launches? Restock announcements? Newsletters? Style guides?
By understanding how your specific segments engage with your emails, you’ll be on the way to sending the most personalized messages, resulting in higher open and click rates.
You can also segment your SMS list. By setting up custom keywords, you can build SMS marketing lists of people who are interested in specific aspects of your products. This can help you connect with people who prefer their phones to emails. It also gives you access to people who specifically want you to message them—the crème de la crème of customers!
The beauty of SMS is the ability to get your message across succinctly. Here are types of SMS messages you can send:
- New product launches: A nice image with a simple new product alert and link to the product description page will immediately capture the attention of customers who care most about your new products.
- Sales and limited-time offers: With SMS messages limited to 160 characters, sending texts about sales are highly effective. Adding any urgency to the sale will encourage your customers to follow the link to the sale.
- Abandoned cart reminders: Engaging with customers who’ve abandoned their cart via SMS is a great way to re-engage them. Add a touch of personalization, like addressing yourself and the customer by first names, and offer to answer questions or concerns they have to lower the barrier to purchase. If it aligns with your brand, offering a discount will surely take your customers back to their carts.
Quick tips for beginners: Segmentation strategies
If you’re just getting started with segmenting your customers, start with these standard segments.
- When a user takes an action, such as purchasing a product. These actions are called “events or metrics”
- Create a VIP segment, when a customer has purchased a certain dollar amount or quantity of a product.
- Inactive customers, who have not taken an action such as opening or clicking an email, within a certain time period.
Offer post-holiday-specific incentives
After the holidays, customers are looking to use gift cards and cash they received. You can target these customers with specific incentives and communications encouraging them to treat themselves.
Post-holiday incentives can also help you segment your emails further. Gift card recipients may be first-time customers or repeat customers; you can separate these two groups into their own segments and send different messages to each group:
- To first-time customers who received gift cards, you can try tailoring communication around best-selling products, hero products, or the wide array of products you offer.
- To repeat customers who received gift cards, you can tailor your communications around products they might like based on their purchase history.
Personalization goes a long way. Even if you don’t have much information on your new or even existing customers, tailoring your message around products that represent your brand and the value you bring to your customers will establish the right perception.
Additionally, if you offered your first-time customers a coupon code, remind them post-holiday that this offer is available. You can use email or SMS to remind them of their offer and encourage them to use it. Customers are more likely to open emails that make it clear they’ll receive something.
How to use email and SMS to increase subscriptions
If you offer a subscription service, you can also use email marketing and SMS messaging to turn one-time customers into subscribers. In fact, compared to social media, another common advertising method used by subscriptions for ecommerce brands, email and SMS conversion rates are at least three times higher.
Provide subscribe-and-save options
By offering your customers the chance to save money by subscribing, you’ve given yourself an excellent opportunity to snag some new subscription customers, who will essentially be your repeat customers for an indefinite amount of time.
There are various subscription-specific offers and messages you can send to your customers:
- To new customers, highlight the value and convenience of the subscription you’re offering. Including reviews from subscriptions customers will add authority to your message.
- To repeat customers who’ve only purchased once or twice, remind them that you have a subscribe-and-save option. Show them how much they’d actually save by subscribing rather than making continuous one-time purchases.
The customer may find value in the “save” aspect of subscribing, especially if they use up the same product regularly. Converting an occasional buyer into a subscription customer turns them into a guaranteed repeat customer for an indefinite period of time. This directly increases the CLTV of any customer who takes you up on the offer.
Quick tips for intermediates: Automation optimizations
If you’re already comfortable creating automations, try this tip to increase your subscriptions. As mentioned above, targeting customers who have made repeat purchases is ideal for scaling your subscription revenue.
- Create a trigger and filter for customers who have made a purchase but have yet to subscribe.
- Create a conditional split for customers who have placed an order 2-3 times.
- If they do not meet the number specified in the conditional split, the customer would receive a welcome series.
- Once the customer meets the criteria of the condition, the automation would send the customer a general offer for subscribe and save.
- Create another conditional split for customer who have purchased five or more times
- Once they meet this criteria, show them exactly how much they would save by subscribing.
Leverage email and SMS to boost retention
While the holidays are an exciting time and can help you find new customers, keeping them once January rolls around can be challenging. Brands that use email and SMS effectively are more likely to keep holiday customers coming back all year long.
By segmenting your email and SMS lists, you can target and retarget one-time customers. Instead of grouping these customers in with those who already purchase your products regularly, you can separate them out and send personalized campaigns that address their interests. This can gain you new regular customers and significantly increase the CLTV of holiday buyers.
Quick tips for the advanced: Target visitors based on CLTV
You can edit your website sign-up form to target customers based on their CTLV.
- Create a new segment.
- Using Predictive Analytics About Someone, select CLV and enter in the minimum/Maximum dollar amount to create a high and low CLV segment.
- Edit your sign-up forms to target visitors differently based on the CLV segment.
- Customize the messaging and offer to be more targeted to these types of customers.
Now that you’ve collected data and expanded your customer base during the holidays, your next goal is to keep the momentum throughout the year. If you’re just getting your brand off the ground, focus on becoming more comfortable with some basic segmentations before diving into more advanced flows.
Email and SMS flows can be a great way to scale your subscriptions as well. If you’re already comfortable with more advanced flows and segments, focus on the tips above to increase your subscribers.
Interested in discovering more segmentation strategies? Learn about three emails to segment before you send them to your entire list.Back to Blog Home