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How Do Emails Help With Customer Retention?

Getting customers is not the only hard part of running a business. The next part might actually be the hardest – keeping them. Customer retention in the digital sphere can seem a challenge. After all, everyone has access to every website in the world – why would they choose to stick with yours, even after making a purchase? Keeping customers after they have made a purchase doesn’t have to be difficult – it just requires a little thought. You need to consider how you interact with customers – and what you can offer them to try and encourage a long relationship between you. Email marketing is one of the most effective ways to foster this relationship – but how should you go about this, and what can email really do for your business?

Why does Customer Retention Matter?

Customer retention is getting your customers to come back to you for a second, third or more purchase. Loyal and long lasting customers can be very valuable to a company, because they are much more likely to spend money than newer customers. There is evidence that increasing your customer retention by 5% can actually increase your overall profits by more than 25%.

If you are correctly retaining your customers, then they are also likely to recommend you to other people. This can help with your customer acquisition without you having to do anything.

How do we Measure Customer Retention?

Customer retention Rate (CRR) is not just a matter of recognising the names and addresses of people who have used you before. It can actually be quantified as a formula.

1 – Determine the number of customers / transactions / enquires / orders (whichever metric you use) you have at the end of a given period (a week / month / quarter). This is (E).

2 – Subtract the total number of new customers / transactions / enquiries etc acquired in that period. (N).

3 – Divide (N) by the number of existing customers at the start of the period (E). (S).

4 – Multiply (S) by 100 to create a percentage.

This is quantified as E-N / S x100 = CRR%

How does Email Affect Customer Retention?

Email marketing is one of the most effective ways to impact your customer retention rate. It can help you to not just keep in touch with your clients, but to build a longer term relationship with them.

Keep in Contact

Emails allow you to stay in contact with your clients. You can build a relationship with your customers from shortly after they first make a purchase with you. A welcome email is likely to be the most successful email you ever send – with an estimated open rate of 34%. This is much higher than most other types of emails.

Within an introductory email, you should try to set out the tone for the sort of relationship you want to build with your customers. Let them know what sort of emails they are likely to receive from you in the future, and what the benefits for keeping in touch (staying subscribed) are.

Reward Loyalty

Customers who return to you are particularly valuable to have. This means that it is worth going a little further to keep in their good graces. An exclusive offer scheme can make sure that people who have come back to you keep doing so for longer. A loyalty programme such as this can help maintain interest and help to generate additional sales. More than 80% of customers choose businesses that offer loyalty programmes, and around half of customers will spend more after they have joined a loyalty programme.

Get Personal

One of the best ways to make it clear to customers that you are the best choice for their future purchases is to personalise. Personalisation in email marketing is easy enough if you have the right data available to you. This does not just mean greeting customers by name, but rather personalising their experience of interacting with you. Depending on the size and breadth of your offering, customers might have interests in part of your offering, all of your offering, or something in between. If you can segment your email lists based on what customers might be interested in, you can show them products and services that are particularly relevant to them – making them feel more connected to your emails.

Make the most of your email campaigns

Getting the full effect of email marketing can be tough. Even if you are getting the content right, how can you know if you are reporting properly, understanding the data you are receiving, and making changes that will affect your success rates?

This is where Gumpo steps in. We are specialists in getting email campaigns to convert, and using the data that they produce to reflect on and change campaigns to be even more effective. Whether you are using emails to introduce yourself to customers, or you are keeping them onside after a long relationship, get in touch and let’s see how we can help your email campaigns succeed.

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