11 Customer Retention Strategies to Reduce Churn in 2023

Mike Arsenault
January 17, 2023
5
minute read

What is customer retention?

Simply put, customer retention is the next step in customer acquisition; where you create an experience, through great products and services and a frictionless buying process, that makes your customers purchase repeatedly and stay an active part of your brand ecosystem. In other words, they keep coming back for more.

How to measure customer retention 

Measuring retention isn’t a one-size-fits-all formula. A lot depends on the type of product or service you’re selling. Here are some suggestions to get you started. 

First, you need to determine your audiences, and this doesn’t automatically refer to paying customers. We guarantee that there is a decent percentage of your email list that has never purchased, yet engages with your emails and website on a consistent basis.

So you have the audience that brings in revenue (your customers) and the audience that’s invested in what you’re doing and subscribes to your email and/or SMS (your loyal followers). These folks aren’t customers yet, but have a very high likelihood of becoming so.

Now, to figure out what retention looks like for you. 

Retention is all about the amount of time your customers and loyal followers stay with you. So, needless to say, it takes time to measure. How and what you measure will depend on your specific product and goals, but here are some things that may be helpful.

First, you need to create a baseline to measure against. Testing via email or SMS, you can create a hold out group, typically 10 - 20% of your audience, from which you will hold out all marketing efforts for the duration of your test. You can do this for both audiences - customers and loyal followers.

You’ll continue to market to the non-holdout group as you normally would, and for customers, month-over-month you can track conversions, AOV, and rate to repurchase. With loyal followers you can measure the rate to first purchase in the group that gets your emails & SMS against the hold out group. 

If you don’t want to take the hold out approach, you could do a year-over-year comparison analysis of the group of customers who are opted in for email and SMS against those who are not. Looking at the same things noted above; conversions, AOV, and rate to repurchase. To measure your loyal followers’ journey in becoming a customer, you can measure the time of opt-in to the time of first purchase. 

Either avenue you choose, it’s a worthy investment in your time to learn these things about your customer base. Try not to define retention based solely on last-click revenue. While often looked at as the defining metric of performance, last-click revenue can actually paint a very one-dimensional picture. And truly, the big picture of retention cannot be defined at the campaign level. Retention should be based on audience behavior, and remember your messages have a bigger influence on your audience (over the long term) than last-click revenue will show. 

And if you do want to measure effectiveness of a campaign, define an attribution window for it and look at the audience’s behavior and numbers during that time period. Look at overall revenue and last-click revenue to see the big picture. 

The goal with this is to set a baseline of what customers do when you don't market to them. Arming yourself with this information will enable you to have a better understanding of the true incremental impacts of the marketing programs you invest in.

11 email strategies to drive customer retention

So now that you know how to measure retention, it’s time to dig into how to increase it! Increasing customer retention is about building relationships with customers. As with any relationship, you have to nurture it for it to grow and strengthen. Companies that excel at retention are the ones who are constantly providing value and meaningful experiences to their customers. The good news is that this is all achievable through email. Let’s dig in. 

The challenge is that people will unsubscribe from your list if they haven’t heard from your brand for a long time, and suddenly get a promotional email.

There are ways to send regular promotional emails to avoid long periods of silence. But sending too many promotional emails can also prompt people to unsubscribe. 

Unsubscribing is the opposite of retention.

Building retention means sending enough emails to keep subscribers from feeling ignored, without overloading them with promotional emails. It’s a tricky balancing act that requires you to get creative with your email content to ensure that you keep delivering value between promotions.

It’s easy to say, “Offer lots of value without sending too many promotions!” But actually delivering value without being too promotional is the tough part. 

To help you with this tough part, we list out 10 emails you can send to deliver value and keep your subscribers engaged without overdoing the promotional emails.

1. Education-based post purchase emails

Tap your customer support team and send emails that answer frequently asked questions. This is a great way to stay in touch with customers and offer value.

Customers often have questions about products but never contact customer support. Sending a quick email that answers those questions improves customers’ experience with your products and helps build trust.

This also increases customer satisfaction with products they’ve already purchased, which increases the likelihood that customers will make future purchases, without having to send a promotional email.

And, if you already gather intelligence from your customer support team for your FAQ page and other assets, putting this information in an email doubles the value of your efforts.

2. Unique product uses and hacks

There are unique and unexpected ways to use almost any product. Highlighting these to customers can be a double boost for sales.

When you highlight new ways to use a product, customers who’ve already purchased that product can get even more value out of it. More satisfaction with a previous purchase encourages customers to make future purchases.

New customers may then decide to purchase once they learn ways to use a product they previously thought wouldn’t be useful for them.

These emails are also great because — even if a subscriber isn’t interested in the products you’re highlighting — the email comes across as helpful, rather than promotional.

Here at Rejoiner, we’re big fans of taking a customer-centric approach whenever you can. And these emails are a great way to take a customer-centric approach to stay in contact with your list.

3. Customer spotlight email

Happy customers are your best salespeople. Showcasing customers who have recommended your products on social media is a great way to give your best customers a shoutout and speak to potential customers.

Send people who have shared your products on social media a quick questionnaire (aim for five questions or less). The best approach to take is to ask questions that wrap product highlights into a story (avoid questions with “yes” or “no” answers).

Include at least one question like, “Why were you seeking a product like this one?” or “What problem were you trying to solve when you found this product?” That way, your customers can tell the story of how they came to the product.

This is engaging and keeps your customer callout from feeling too much like a product promotion, even though this email does spotlight products for potential customers.

With the remaining questions, prompt customers to round out the story with details about how they use the product, what they like most about it, and any tips they have for getting the most value from the product.

Remember to close out your customer spotlight email with a buy now button.

4. Message from the Founder or CEO

H.V.M.N. sends a message from its founder each month, and it’s their best-performing monthly email.

The message from your founder can be the origin story of one of your products, updates on what’s in development, what’s next for your existing products, and industry trends. An inside look into how your products are produced or how your company operates is also great content for these emails.

At the very least, these emails humanize your brand and offer a little entertainment. This will increase your email marketing revenue over time because people feel more connected to your brand, which builds customer loyalty.

These emails can spark interest in your products which leads to additional sales in the short term, too.

The key to email messages from your founder is to send them at steady intervals. You don’t have to send a founder message every month, though it’s a good interval, so long as your subscribers know when to expect these messages.

5. Content feedback requests

One of the best (but most underutilized) ways to discover what your subscribers want is to just ask them. Send a short email and ask your subscribers what they would value in their inboxes.

It’s important to get two things right if you solicit content suggestions from your subscribers.

First, be honest. Be upfront that you want to send valuable content, in addition to the discounts and promotions, but you need a little help with content ideas.

The second thing is to follow up and actually use some of the ideas you get. People will feel disappointed if they take the time to send you their ideas, then never get any emails that acknowledge their feedback.

Of course, you may not be able to use all of the ideas you get. But, when you use your customers’ ideas, point out in the email that the content idea came from your customers. That way, your subscribers can see that you’re paying attention to them and feel valued, even if their idea wasn’t a winner.

A final point: an implied requirement of this email is that you need to send it from a monitored inbox, even if you send a survey. That way, people can respond to the email just like a normal email conversation. And they can just hit reply if they need help completing the survey.

If you do it right, getting content ideas from your subscribers builds loyalty and helps you with your content creation. It’s a win for everyone.

6. Product surveys

If your customers love your products (and even if they don’t) they will appreciate being asked for their feedback. But customers are savvy and they know their feedback is valuable, so you need to frame it the right way. 

There’s a few ways to do it. One is the letter format where someone from the company asks for your input. Even though it’s not a true 1:1 experience, it feels like it. Some people offer an incentive (like a coupon code or an Amazon gift card) which tends to yield better results and sends the message that their time is valued. 

The benefit here is that you get insight from your customers and you may be surprised by the common themes that pop up. But you can also spin this into new content for email by sending a follow-up that shares the results, or showcases some of their ideas.

7. Latest news or research in your field

This is something that isn’t done as often but is easy to produce and adds a lot of value. All it takes is setting a few Google alerts for specific keywords related to your product or field, and you’ll get the latest content delivered right to your inbox. 

This is a great opportunity to create a template to share news quickly. Whether you’re sharing one of your press releases or links to interesting (relevant) articles, this kind of newsletter can help establish your brand as the expert in the field, and your customer’s go-to resource for your subject matter. 

The additional perk is that you stay on top of the news in your industry, as well.

8. Glimpses behind the scenes 

You’d be surprised how much people love catching a glimpse behind the scenes, even of the things that you may find…not so glamorous. 

Showing design iterations, sharing pics of a press check for new labels, sharing options for new components and packaging, and even pictures of meetings or company outings can all make your customers feel more invested and part of your inner circle. It passively builds trust when they see how things are done. 

Sure, you can share this content on your social channels, but remember your email audience and social audience don’t completely overlap. When this kind of content is shared in email, you have the added benefit of linking to specific products, FAQs, or blog articles to add more color and context.

9. Content (blog / podcast) updates

A blog is a big endeavor, a podcast even more so. That’s why if you’re going to do it, you have to direct traffic to it and make sure it gets seen. Create a special template or formula for these kinds of emails so they’re easy to push out quickly (and easy to recognize). 

Check out this example from H.V.M.N. They release their new podcast every Thursday, and the email goes out every Friday. This email template is easily updated and new emails can be turned around in no time. They even created a survey for their podcast listeners so they could gain insight into how people are liking it, what other topics they’d like to hear about, and give their input on potential guests. Letting your customers have input is always a good thing.

10. Highlights from social (user generated)

One constant source of ideas and inspiration is your customers and what they’re posting on social media. You get to see people unboxing, using, and reviewing your products, as well as referring them to others. This content is rich in so many ways. It’s authentic and unbiased. It helps build trust. And your customers will be happy to get the recognition and shout-out. 

There’s also a good chance it will give you a new angle to use in your messaging. Check out this email from Smart Tools. They picked right up on an emerging theme.

11. Create your own holiday to bump your slump times

Even though it’s important not to overload your subscribers with promotions, there are times when organic opportunities for sales and discounts are hard to come by. January and February come to mind.

Fortunately, you can create opportunities to send promotional emails during these slow seasons to avoid long periods of radio silence.

One of the most recognizable examples of creating an opportunity to send a promotional email is Amazon’s Prime Day. This has been so successful that smaller companies offer their own competing sales on and around Prime Day.

Not every company can conjure up a sale day based on their loyalty program or subscription model. But you can base a promotional email on other regular events.

Annual events such as your company birthday or the anniversary of a flagship product launch work well as sale themes to keep moving products during the slow seasons.

Alternatively, you can establish a customer appreciation day, where you offer discounts to returning customers each year. This is similar to Amazon’s Prime Day. But it’s more customer-centric and leverages returning customers to maximize your customer lifetime value. 

In this example from H.V.M.N, they chose to lean into the spirit of community by giving members the opportunity to send a free gift to a friend. While not an option for everyone, if your profit margins and inventory allow, it can be a powerful tool to tighten the bond with your community. What’s most powerful about this particular example is that it’s not a push to sell anything, which can help strengthen trust in the brand.

What to do now

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Frequently Asked Questions

What strategies should an ecommerce brand use to improve customer retention?

Direct response marketing channels like email and SMS are the most effective retention strategies because you have the ability to get specific with your audiences, messaging, and timing. Personalized content goes a long way, like product recommendations, anniversaries and birthdays. Loyalty programs folded into this mix supercharge these efforts.

What metrics are used to measure customer retention?

There are the obvious metrics like hitting an LTV milestone, the rate in which the customer makes repeat purchases, and churn rate or the rate in which customer activity becomes dormant. Important additions to those are product returns, or subscription pausing or cancellations.

What’s a good customer retention rate for an ecommerce business?

This will vary depending on your specific business, product, or industry but a 25 - 30% customer retention rate tends to be the norm for ecommerce brands. If your retention rate is 35% or higher, that’s better than average.

AUTHOR

Mike Arsenault

Founder & CEO

Mike is a martech veteran and the Founder of Rejoiner, a SaaS marketing automation platform built for ecommerce. For the last 10 years, Mike has worked with brands like Moosejaw, Hydroflask, Peak Design, Triumph, Hearst & Guthy Renker to provide the strategy & technology with which they use email to drive revenue growth.