Russell Connell’s classic lecture “Diamond Fields” is about a man named Ali Hafez who was so desperate to find diamonds that he sold his farm, left his family, and went on a quest that took him around the world. A search that was futile and led to nothing but his own death.
Meanwhile, the new owner of the farm found out that “the most valuable diamond mine in the history of mankind” was buried right under the farm he bought from Hafez Ali.
The moral point of the story was “do yourself first in the search for the treasure of the earth”. In my opinion, this applies exactly to marketing. Most businesses have a rich diamond mine consisting of their existing customers that remains untouched. However, they abandon this family of existing customers after a few initial deals and spend all their energy, money and resources searching for a new source of income.
Most businesses, especially if they have been around for a long time, are sitting on a real diamond mine. As a result, it is much easier to increase the income and more importantly, the profit obtained from existing and previous customers than new customers. According to statistics, if someone has bought from a business before, the probability of buying from them is 21 times higher than someone who has never bought from them. This way, you have a huge sales advantage over your current and previous customers.
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When we talk about marketing, especially digital marketing, we subconsciously remember creating new markets, expanding the range of customers and creating channels to attract more audiences. Although a major part of the responsibility of the marketing team is to increase sales and attract potential customers, but a topic that has been receiving a lot of attention from marketing activists in recent years, and in the past has been considered indiscriminately in offline markets, is the issue of retaining current customers and returning them. Customers to re-purchase and re-engage with the business.
Retention marketing means doing activities to attract and retain users with the approach of creating repeat purchases from customers.
The importance of retention marketing
You may have heard that it is much easier and cheaper to retain a customer than to acquire a new one. Of course, this is completely true! According to outbound engine statistics, attracting a new customer will cost you about 5 times more than keeping an old customer. In addition, the cost of selling to a previous customer is at best 40% more than the final cost of selling the product to someone who has not bought from you before. On the other hand, current customers are 50% more likely to buy from you than new customers. So it is logical that with these numbers, which may be higher in some businesses, you should think about keeping your old customers.
Retention marketing tools
People’s lives are very busy. Even when it is in their favor, they don’t remember to do everything in a regular way. In the meantime, you should try to send them a reminder by mail, email or SMS and remind them to do business with you again and use your products or services.
Sending regular reminders can be completely automated, so use free technologies to do some of the heavy lifting for you. Some worry that their messages are too pushy, but if you’re selling something valuable that benefits your customers, it’s a disservice to not sell them often enough!
So try to use the following tools for retension marketing according to your target community, product and of course the marketing channels under your authority:
- E-mail Marketing
- SMS marketing
- Social media
- Push notification
Calculate customer return rate
Businesses can calculate their customer retention rates in different ways. Although everything depends on the time frame you are looking for, many digital marketing experts consider different variables. The formula for calculating customer retention rate is not difficult but very efficient. Calculating this number will show you how successful you have been in building relationships with your customers and how successful you have been in returning them.
The formula for calculating the customer retention rate is as follows:
100 x [number of customers at the beginning of the period / (number of new customers obtained during this time – number of customers at the end of the period)
1) The time period you want to measure customer retention rate.
2) Calculate the total number of customers at the beginning of the time period.
3) Calculate the total number of customers at the end of the time period.
4) Calculate the number of new customers during the period.
5) Subtract the number of new customers from the number of customers at the end of the time period. Divide this difference by the number of customers at the beginning of the time period. Multiply the result by 100% to calculate your customer retention rate. For example, If you had 100 customers at the beginning of the year and gained 20 new customers, but by the end of the year, you lost 10 customers, then your customer retention rate is 90%.
Retention marketing tricks
- Special offers and special discounts
- Special gifts for customers
- Customer loyalty programs
- Affiliate marketing
- Providing free benefits
- Implementation of interactive campaigns
- Follow up and provide after sales services
The rate of retention of previous customers in businesses
- Specialized services: 84%
- Insurance: 83%
- computer services 81%
- Telecommunications: 78%
- Banks: 75%
- Retail: 63%
The right tools for relationship marketing
Smile.io allows you to quickly set up and run your discount program. This program can be a combination of VIP items for your customers. On the other hand, this program is very easy to set up and integrates seamlessly with your other marketing tools.
LoyaltyLion helps you increase customer activity and satisfaction by providing points for activities such as registrations, purchases, etc. You can then use the points to redeem rewards in your store, which will drive long-term loyalty, engagement and increased revenue. On average, users earn up to 33 thousand tomans for every thousand tomans spent on LoyaltyLion.
You can capture endless amounts of data through Privy and then use that information to deliver relevant messages to customers on-site and via email. Privy also integrates with your marketing tools, including multiple email service providers.