How to reap the rewards of loyalty & retention

In times of economic instability, battening down the hatches and tightening the purse strings is the natural response to keep your bottom line healthy. And while making considered decisions around media budgets is wise, a switch in focus from new customer acquisition to loyalty and retention is even wiser.

According to Harvard Business Review, acquiring a new customer is “anywhere from 5 to 25 times more expensive than retaining an existing one”. For some organisations, this is a budget-breaker, especially those with long sales cycles or expensive products. But while acquisition can multiply your spend five-fold, an HBS study shows just a 5% increase in retention rate can increase profits by 25% to an astonishing 95%.

But it takes more than just a switch in mindset to harvest the fruits of retention. And while some organisations may have laid the foundations back in the dark days of the pandemic, many marketing teams are underprepared from a technical, talent and strategy perspective to compensate for the loss of media exposure and traffic when switching to a retention and loyalty strategy.

Developments in martech, data modelling and personalisation capabilities mean that loyalty and retention strategies have come a long way from simply firing off a discount code to all previous buyers; it’s about getting to know your customers, understanding their needs, and providing the service they need, when they need it. But we understand that knowing where to start when budgets are shrinking and timelines are tight can be tough, so we’ve broken down some key focus areas to support you with your loyalty and retention strategy.

In order to target your existing customers, you need to ensure that you can isolate that data. The first step is to get the basics right with your customer journey and CRM setup. This will enable you to build out the customer journeys from first conversion, to repeat purchase, to loyalty.

Through data, insights and a ‘test and learn’ approach, you can grow and engage your customer base in both size and value, while identifying the customers who have the highest likelihood to churn so you can act accordingly. Data modelling can help you to 
create buckets of different types of customers and approach them with the right message at the right moment.

DEPT® supported a luxury retailer with this challenge. By garnering a deeper understanding of its existing customer base through data insights and utilising the Google Marketing Platform (GMP), the brand was able to maximise owned/paid retention campaigns, identify lookalike audiences, set budget caps, and prioritise customer service cases. The data informed a customer contact strategy that ensured the right messages were sent to the right people, at the right time. The result? An 85% increase in sales.

In all positive stories, technology is the enabler. In this instance, Google Marketing Platform supported the retailer in its success. GMP is an integrated ad-technology platform that enables advertisers to more effectively manage, measure and grow high-impact digital marketing campaigns, and its suite of solutions has the ability to power all key elements of your campaigns, from automated campaign management to optimisation, analytics and real-time data visualisation. If you’re not utilising GMP already, it is well worth exploring.

Tailored, one-to-one customer communication across all digital touchpoints is a key tenet of loyalty and retention. All content touchpoints, whether push notifications, e-mail, website or chatbots, can have automated processes that ensure personalised messaging at any given moment. 

Beiersdorf is a glowing example of how to get it right. The personal care manufacturer focused on its existing Nivea customers across Europe, and developed a strategy that placed a strong focus on known customers in the ‘care’ phase of the funnel. This has a dual benefit; not only helping to increase loyalty, but also mitigating the impact of the death of the cookie as, by dealing with existing customers, you are still able to personalise customer journeys.

Utilising Salesforce technology, DEPT® implemented automated journeys to engage the database and prevent churn, optimised the content strategy, contact frequency, and email design, and improved the acquisition campaigns for growing the database with high quality profiles. The result was a 200% increase in open rates, and 357% increase in click-through rate.

The Salesforce suite of solutions, such as Marketing Cloud, Tableau Analytics and Experience Cloud, can play a vital role in developing a truly 360 view of your customers to enable success. From consolidating all customer data to create rich customer profiles to automating complex processes to increase efficiency and productivity, creating cutting edge tools to support end-to-end communication to optimising workflows with machine learning, Salesforce is a solid base for any brand’s tech stack.

Chatbots are well worth considering as part of your loyalty strategy, helping customers to self-serve and providing personalised recommendations. Ralph Lauren approached one-to-one communication with the development of a gifting chatbot for the festive season. The luxury retailer wanted to create an immersive and personalised method of picking the perfect gift, matching the users’ interests with compatible products available on the Ralph Lauren website. By combining data-driven insights from previous gifting chatbots with innovative Instagram platform features, DEPT® built one of the first branded Instagram chatbots available in the industry and worldwide. In the first few months of launch, the chatbot attracted over 12,000 average monthly users with 3% showing strong purchase intent.