Lessons from OWN IT: customer retention marketing strategies, tested by experts

A lot goes into a repeat purchase

An amazing product, an exceptional customer experience, and a nurturing marketing program that keeps people engaged are equally paramount.

But nailing this trifecta is more complex than it’s ever been.

Consumers are shopping in a saturated market, distracted by endless options. They’re quick to write off brands that don’t deliver on their promises.

In this kind of environment, what can marketers do to earn long-term loyalty?

A panel of experts weighed in on this question during OWN IT, Klaviyo’s 3-day virtual ecommerce summit. Panelists included:

• Sriya Karumanchi, director of marketing at Catbird
• Amanda Kwasniewicz, VP of customer experience at Love Wellness
• Jacob Sappington, director of strategy at Homestead Studio
• Molly O’Connell, technology partnership lead at Gorgias

Keep reading to learn what customer retention marketing is, what’s standing in the way of retaining your customers, the best retention marketing channels for connecting with customers, and more.

What is customer retention marketing?

Customer retention marketing refers to the strategies and actions businesses take to retain their existing customers and foster long-term relationships with them. It is a proactive approach that focuses on building loyalty and encouraging repeat purchases from customers who have already engaged with the brand.

What’s standing in the way of retaining your customers?

We’re living in unprecedented times. A post-pandemic bear market, economic uncertainty, and large-scale weather events have resulted in conservative consumer behavior.

Whether you’re doing business out of a brick-and-mortar location or exclusively online, you’re likely facing obstacles that could throw you for a loop, including:

Changing—and strengthening—privacy laws

2023 marked the beginning of a profound shift in America’s philosophy underlying customer data privacy laws.

Historically, the US permitted businesses and institutions to collect consumers’ personal information without express consent, while regulating uses to prevent or mitigate harm in specific sectors.

By contrast, under the “rights-based” approach of the European Union’s General Data Protection Regulation (GDPR), individuals effectively own their personal information, presumptively have the legal right to control it, and can decide who can use it.

Now, 9 US states are following suit in enacting stricter consumer data privacy laws, including California, Virginia, Colorado, Utah, and Florida.

Additionally, paid advertising is getting trickier, largely due to companies like Apple changing their product functionality to assuage consumers that they have data privacy in mind.

Historically, Facebook was able to pull more customer data, tracking nearly everything a user clicked on and allowing for precisely targeted advertising. But post iOS 14.5, social sites can collect and pass along far less data from the customer—which means it’s no longer as easy or straightforward to personalize your ads.

The result: You may notice less revenue coming from the ads you run on social media. Cost per acquisition (CPA) has increased, and many businesses are priced out of the revenue they’ve gotten used to.

2023 will not be the year of recovery for ad budgets. Giants like GroupM project only 5.9% growth in ad spend this year, compared to 7.8% in 2022.

That’s not to say that advertising on social media is over. Facebook and Instagram, especially, are still two of the most popular social media platforms marketers depend on, according to Klaviyo’s Marketing Mix report. It just means marketers need to create new narratives to pull people down conversion paths.

Inflation, a bear market, and a potential recession

No one can ignore inflation—it exceeded more than 40-year highs in 2022, when the US federal government raised interest rates for the first time since 2018.

As interest rates continue to rise, consumer confidence slows. People spend less money and are less likely to try a new brand. Despite recent signs that inflation is cooling in 2023, the fight to bring down the meteoric price increases of the last 3 years is far from over.

All of this can add up to more reluctant customers with many reasons to save money. So, how do you raise a customer’s lifetime value (LTV) in an increasingly unstable and unpredictable global economy?

Customer retention and customer acquisition: two sides of the same coin

Customer retention begins with customer acquisition.

“You actually do have to play with both sides of the coin at the same time,” said Kwasniewicz. “Sure, you can just let it rip for acquisition. But you’re going to be doing retention work in a few months to try to repair the bleeding hole you’re ultimately going to have if you only focus on acquisition.”

Retention and acquisition efforts aren’t as simple as they may seem on the surface, either.

“I think a lot of people try to condense retention marketing down to just email and SMS, but it goes much further than just these two channels by themselves,” said Sappington. “Retention marketing is a multi-channel effort.”

Retention marketing channels for connecting with customers

Many marketers are grappling with changes by focusing on profitability over growth—ensuring the customers they acquire keep coming back, sign up for subscriptions, and join brands’ loyalty programs.

But retention strategies have changed. As Kwasniewicz put it, when it comes to retention, “everything that worked no longer works.”

Here are a few channels where retention marketing can work:

Loyalty and referral programs

Loyalty and referral programs that are executed thoughtfully and strategically can yield big-time benefits. Beth Wells, senior partner marketing executive at LoyaltyLion, helps brands create a loyalty program that goes beyond points and rewards, driving greater LTV and more cost-effective acquisition through better customer relationships.

According to Wells, a first-time customer who signs up for a loyalty program spends 40% more on average than a first-time purchaser who doesn’t.

She recommends the following when implementing a loyalty program:

• Make signing up easy and intuitive.
• Make the benefits of your loyalty program crystal clear.
• Offer a dedicated rewards page to create a unique, on-brand loyalty experience.
• Don’t shy away from promoting your loyalty program on social media.
• Treat new customers to a perk for signing up for your loyalty program—this could be loyalty points or even a free gift.
• Offer enough points on the first purchase that it’s worth it to sign up.

During OWN IT, Karumanchi observed that loyalty strategies are about shifting buyers through their lifecycles and growing those valuable cohorts toward the repeat and loyalty end.

“On an aggregate level within our customer data platform, we have our subscribers, first-time purchasers, repeat customers, and loyalists,” she explained. “Our loyalty strategy is focused on how many more people we can shift into 3x purchasers within a calendar year, increase purchase frequency, and get subscribers to make their first purchase.”

Subscription Programs

Subscriptions and retention go hand in hand: If you can keep a subscriber on board, you’ve got a long-term customer you can count on. The question is: How?

It’s all about creating thoughtful experiences that make your customer’s life easier, more convenient, and frictionless. This also means considering the unique customer journey of a subscription customer vs a normal customer.

“If you know that one of your customers has put their subscription on pause because they were traveling, when they then come and visit your site months later, you have that information and that data really working for you. You can say, ‘It’s great to see you again, here’s an offer,’ to encourage them to re-sign up and reactivate their subscription,” said O’Connell.

Personalized web experiences

Delivering relevant website experiences can go a long way toward building long-term customer loyalty by making your repeat purchasers feel seen and special.

What this looks like depends on your brand’s products and offerings. At Love Wellness, for example, subscription and retention go hand in hand, so relevant web experiences are about encouraging rewards and loyalty incentives and leaning into cross-category selling.

“Subscribers are a huge part of our business that keep our DTC machine going, so we tailor our website experience so that if we can identify you as an active subscriber, the website looks totally different,” Kwasniewicz said. “Instead of offering those site visitors a one-time discount that isn’t applicable on their subscription, we make the website focus on rewards.”

Delivering tailored online experiences that boost relevance for the buyer—especially for those valuable subscribers—means providing a better customer experience and reducing points of friction that could lead to a high churn rate.

Reviews

Reviews are some of the best ways to identify your top current customers. If someone leaves a 5-star review, you can invite them to your loyalty program or cross-sell other products they might enjoy, and use the review content in retargeting ads or remarketing emails.

With Klaviyo Reviews, marketers can:

• Automate review requests from loyal customers with email and SMS flows
• Use insights from custom questions in personalization and segmentation
• Display customer reviews as a part of their marketing strategy to improve conversion and repeat purchase rates

Ultimately, the better you can identify your best customers, the better set up you’ll be to nurture those relationships and encourage repeat purchases.

Customer support

Customer support is often overlooked as an avenue for retention, but it’s ripe with possibility—especially when you’re getting a complete view of the customer experience across all brand communication channels.

“With omnichannel customer support, you’re building a picture of the customer journey. Being able to leverage this data will inform how well your agents are able to communicate and follow up with those buyers later on,” O’Connell said.

Email

Email is an important channel for making your customer base feel seen.

“Marketers are cognizant of the value of their list,” said Sappington. “Instead of just seeing it as a channel to blast promotions, they’re looking at it as a medium to communicate with their customers more effectively and cost-efficiently while still driving value and revenue.”

Marketing automation goes a long way when it comes to scaling these retention marketing efforts—and it doesn’t have to come at the expense of personalization, either.

“Some people think that with automated email responses, you’re losing a personalized touch,” O’Connell pointed out. “But in reality, if you set that up beforehand in a smart way that does connect with all of your tech stack, you can do personalization in a 1:many way.”

“Lean into automation,” O’Connell advised. “Make sure that when your team is getting involved, it really is at those points where you need to provide a high-touch experience, but lean back on automation when you can.”

Push notifications

Because they meet your customers where they are—on their phones—push notifications can be an excellent addition to your content marketing strategy and a great way to remind your customers to revisit your mobile app or make a repeat purchase.

What’s more: They allow marketers to capitalize on timely, relevant moments—think birthdays, anniversaries, and other key milestones—to check in with customers for a more personalized experience.

4 retention marketing strategies to delight loyal customers

When it’s time to put theory into practice, you need actionable strategies to explore during your experimentation process. Here are 6 retention marketing tactics worth trying out.

1. Prioritize timing and personalization

Focus on customer lifecycles and improving lifetime value more than channels, and use predictive analytics to your advantage.

“Offer customers a survey with an incentive and/or personalized second purchase recommendations early in the customer’s journey to prevent customer churn—or at least stall it from happening before it’s predicted to,” suggested Sappington. “We’re layering Klaviyo’s predictive analytics features and our aggregate CDP data to reach people at the optimal time.”

Different customers require different kinds of content in order to feel like your brand sees and cares about them. But how do you create personalized experiences without being intrusive? Using first-party or zero-party data to inform decisions is part of the equation.

Sappington takes a simple approach to personalization: “We look at our post-purchase surveys, and from the responses, we realize which bucket 70% of customers fall into. Then, we create more content that supports that bucket. Instead of the classic personalization of, ‘Hey, First Name, thanks for shopping with us today,’ it can be more geared towards what we know about our audience as a whole instead of individual buckets of customers.”

2. Understand customer types

On a similar note, be thoughtful about where the customer is in their journey with your brand, and pitch your offerings to them accordingly.

“If you’re a brand-new customer who has never purchased, we may need to give you an intro offer. But if you’re a subscriber already, you’ve already got a great discount,” explained Kwasniewicz. “So instead, we might focus on rewards and customer loyalty and how you can use that with your subscription.”

“Likewise, we may leverage cross-category selling,” Kwasniewicz added. “If we know what you’re already subscribed to in the vaginal health category, we might pitch a great recommendation on the gut health side.”

Karumanchi shared another example: “Our wedding and engagement customer differs from our core customer, who leans into everyday fine jewelry. They both value many of the same things—quality, brand ethics, and the maker’s process—but the consideration window for a wedding or engagement is much broader.”

“Even within the wedding audience set, some are ready to buy a ring for a very impromptu wedding right away, while others are on a 6-month timeline of meticulous research,” she said. “So stitching the identities together and creating branches as it speaks to different audiences is also important to us.”

3. Invest in a list growth strategy

If you’re not growing your list, it’s shrinking.

Over time, a portion of customers will inevitably churn. To compensate, your list needs to keep expanding long-term. Once you have customers on your list, provide them with the right content that helps them with their next purchase decision.

Sappington advocates for keeping retention top of mind when considering the different levers you can use to grow your list. This approach will help you attract not just more customers, but the right customers—those who have high intent, and are ready to purchase your products.

4. Create an impactful first purchase experience

How can the first purchase impact retention down the line? What top-of-the-funnel strategies should brands keep in mind to encourage repeat purchases?

“When someone comes to your site for the first time and is a first-time buyer, you have an opportunity to set the tone and make sure that you’re leading with a personalized experience that will make shoppers want to keep coming back,” said O’Connell.

To that end, “coming in with the right deal is critical,” she explained. “The deal must attract buyers who want value from your product and will be repeat buyers of the products they truly love.”

How to increase LTV with customer retention marketing

Customer retention, hand in hand with growth, is what keeps your business succeeding all year long. And according to brand experts, it’s more important than ever to have a thoughtful retention marketing strategy—but that doesn’t just mean setting up a thank you email automation.

Marketers need to establish frictionless experiences, come to know their audience through data, and create personalized customer journeys in order to keep shoppers coming back for the long-term.

Customer retention marketing FAQs

How often should I send customer retention emails?

The frequency of customer retention emails depends on your specific business, industry, and customer preferences. It’s important to strike a balance between engaging and not overwhelming the recipient. Generally, a good starting point is to send emails monthly or quarterly, but you can adjust the frequency based on customer feedback and response rates.

What types of emails are used for customer retention marketing?

Customer retention email marketing employs various types of emails to engage and retain customers, depending on customer preferences and specific business objectives. Common types include:

• Welcome emails
• Reminder emails
• Thank-you emails
• Promotional emails
• Birthday or anniversary emails
• Feedback and review requests
• Win-back emails
• Re-engagement emails
• Up- or cross-sell emails

By utilizing these email types, business owners can effectively nurture customer relationships, encourage repeat purchases, and foster brand loyalty.

What should I include in a customer retention email?

When crafting a customer retention strategy, include elements in your email campaigns that engage, inform, and add value to your customers. Key components include:

• Personalized greetings
• Benefits and new features
• News and updates
• Personalized offers or discounts
• Customer success stories or testimonials
• Educational content or tips
• Call to action (CTA)
• Contact and support information

Remember to keep your customer retention emails concise, visually appealing, and easy to read. Use a conversational tone and personalized email content wherever possible to build a human connection with your community.