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Retention Marketing; What, Why & How It Works [+Free Plugins]

Retention-Marketing-What-Why-&-How-It-Works-Free Plugins

Retention marketing is one of the marketing methods available today. It is a set of methods used to keep customers engaged and eager to buy. Such techniques are related to providing customers with appealing content which will increase lifetime value and profitability.

In this article, we will go further into retention marketing. Likewise, we will explain the importance of retention marketing and the tools to implement this approach properly. 

What Is Retention Marketing, and How Does It Work?


The phrase “retention marketing” is also known as “lifecycle marketing” or “loyalty marketing.” It refers to engaging consumers, pleasing them, and making them buy. When you provide relevant content, it will boost customer lifetime value (CLV). And as a result, it increases total income. 

Though retention marketing may seem like another buzzword, it is vital to any eCommerce store. In a nutshell, retention marketing differs from customer acquisition or lead generation. 

It targets clients who have previously bought the product or subscribed to your service. The primary purpose of retention marketing is to make customers buy more often. Thus, increasing their CLV (customer lifetime value) and revenue for your business.

However, customer retention is not just about transactions—it’s about building connections. Buyers view their connections with companies the same way they see relationships with peers. 

Therefore, customers want trustworthy, real, and attentive companies. To increase brand loyalty, focus on buying connections with existing consumers. 

What’s The Difference Between Retention Marketing And Customer Acquisition?


Retention marketing is concerned with improving connections with current customers to increase brand loyalty and encourage repeat purchases.

On the other hand, acquisition marketing focuses on attracting new consumers to your shop. So, don’t replace it with retention marketing. 

Now, consider eCommerce marketing to be a sport. Some teams excel at attack in sporting activities, while others excel at defense. 

But will a team ever win if they play one of the two? Retention is your store’s defense, while acquisition is your offensive. So, play both to win the matches ultimately! 

However, remember to always add retention marketing to your eCommerce marketing plan. While client acquisition is crucial, let’s look at why retention marketing should be a top priority.

Why Is Retention Marketing Important? 


1. Reduced Marketing Costs

Retention marketing allows you to stretch your marketing budget further by concentrating on existing clients. 

Also, promotional strategies towards them will be reduced. The reason is that regular clients are already accustomed to your products. According to BCG, marketing to a current customer costs roughly $7 but promoting to a new client costs around $34

2. More Purchase, More Profit

Customers that frequently buy from you will spend up to 33% more on purchases. This will cause a better customer lifetime value. 

Not only that, they’ll be 50% willing to buy new products because they trust your company. A satisfied consumer will continually view your product as the best, irrespective of your competitors. 

3. Free Word-Of-Mouth Advertising

Word-of-mouth advertising is the most cost-effective. It comes from clients that trust your business. Returning customers will tell others about your excellent services.

Thus, turning into free marketing ambassadors for your company. People still trust the opinions of individuals who are close to them. So, this strategy works. 

Almost half of the American consumers say their friends and family are their primary sources of brand knowledge. In addition, 92% of Americans believe recommendations from friends and family are more trustworthy than any other form of marketing.

4. Gain Valid Feedback

Delivering excellent customer service matters in winning over customers. In previous studies, 97% of customers stated ‌they are more devoted to a firm that adopts their reviews. While 55% said, they will stop being customers of a business that ignores their criticism.

Customers that buy from you may notice flaws. So, ‌ask questions. You can get feedback by sending emails to your list and posting a poll on your social media sites. Besides, distribute surveys to clients directly after they make an order. With this, ‌you’ll make new adjustments to features that you didn’t notice. 

How To Calculate Customer Retention Marketing

Now that you know how vital retention marketing is, let’s talk about how to tell if your efforts are successful. Here is all you need to know about calculating this crucial measure.

1. The Information

What do you need to measure customer retention marketing?

First, choose a ‌period. To get the best precise measurement, choose a longer duration. Select at least a quarter or a year. Confirm the number of clients you had at the start of the period.

In addition, determine how many you had at the end of the term. Lastly, consider how many new customers you gained.

2. Customer Retention Marketing Formula

The retention marketing formula is simple to understand. Start by subtracting the number of clients you gained during the period from the clients you had after the time.

Then, divide the figure obtained by the total number of customers you had at the beginning. Next, multiply that figure by 100 to get the rate of retained clients.

Calculate customer retention rate with this formula: [(E-N)/S] x 100 = CRR

Where E is the number of customers at the END of the period. 

N is the number of NEW customers gained within the period. 

S is the number of customers you STARTED with.

For instance, you started with 100 clients. During the period, you achieved 15 new ones and ended up with 105. 

(105-15)/100)*100=90% retention rate

Though a 90% retention rate is excellent, you should always aim for 100%.

Retention Marketing Rate Vs. Churn Rate


The inverse of your client retention rate is your customer turnover rate. For example, if your retention marketing rate is 90%, your churn rate is 10%. 

So, the most straightforward approach to calculate your churn rate is to divide the total number of clients at the beginning of a period by the number of churned customers within that same period. Then, multiply the figure by 100.

Customer churn rate formula: (Churned clients/ total number of clients) x 100

Let’s imagine a firm had 100 clients at the start of the year but it had lost ten at the end of the year. The company would have a ten percent churn rate: (10/100) multiplied by 100 is 10%

Retention Marketing Strategy


Have we convinced you that retention marketing is crucial? If that’s the case, you’re undoubtedly wondering how to go from a low retention marketing rate to a healthy one that improves your balance sheet. We’ve got a few pointers for you:

1. Get Familiar With Your Customers


Set up some time to gather personal information about your customers. We aren’t talking about their phone numbers. 

Instead, look through their social media profiles, such as Instagram, Tiktok, or Facebook, to learn more about how they spend their leisure time. 

Also, look out for the events they attend, their favourite foods and colours, etc. In addition, find out which holidays they celebrate, so you may send them an offer at the right time.

With the information gathered, you can develop personalized marketing messages. Then, depending on their profiles, deliver them with customized content. Isn’t it cool?

2. Enhance Customer Support


Support systems enable you to engage with your customers and give them maximum help. A support system helps a customer service representative to interact appropriately with the consumer. 

Having a live chat or contact centre tool on hand may transform a client query into a sale or a complaint into a resolution. It doesn’t matter whether the consumer comes in person, via mail, or through social media

A well-addressed complaint or problem will convert a dissatisfied consumer into a loyal one. This is an integral part of receiving client feedback because it will improve the value of your products and your whole purchasing experience.

Furthermore, presenting a modest gift to your top customers. It’s a beautiful way to remind them to keep on patronizing you. Also, provide an element of surprise to enhance customers’ excitement. However, this depends on your niche, product mix, and margins. 

This retention marketing strategy corresponds to the rule of reciprocity. The rule states that we are compelled to reciprocate positive actions with positive actions of our own.

For instance, humans often want a nice break in a world when everything is speedy and done through the internet. Therefore, a handcrafted thank-you card is a fantastic approach to show consumers that you care, and it can also entice them to buy from you again.

3. Begin A Customer Rewards Program


Customer reward programs are also known as retention marketing programs. It’s an efficient strategy to improve sales volume.

It encourages customers to buy more frequently to earn lucrative incentives. These programs turn into a thriving trade for you and the customers. 

As a result, customers get excellent value from each purchase. Whereas, you gain from their recurring patronage. Encourage customers by offering promo codes when they open an account. They’ll be eager to return to your store after experiencing how easy it is to receive incentives. 

What’s more? Create a rewards program by offering customers a certain price threshold after their second transaction.

4. Send Interesting Emails To Customers

Send-Interesting-Emails To-Customers

Email marketing is the foundation of customer engagement. Emails allow you to keep in touch with your consumers before and after making their first purchase.

So, every mail you deliver must add value to your customer’s experience. 

Follow-up emails are a fantastic way to get started. Send an appreciation email to customers. This will make them feel better about their decision to purchase from you. And it will make your business more accessible. 

You can even increase the effectiveness of your original email by proposing goods that complement their first purchase. Finally, add client feedback. These reviews will raise the perceived worth of each product. It will also increase the customer’s desire to buy it.

Top Plugins For Retention Marketing

Do you want to increase brand loyalty? There are mobile apps for it. Below are a few of them:

1. plugin for retention marketing

Smile makes it easy to create and manage your loyalty program. It contains a mix of points, referrals, and VIPs. Over 25,000 businesses have put their confidence in Smile because it assists them in growing their earnings. The software is also relatively simple to set up.

Besides that, Smile works flawlessly with other tools in your marketing tech stack.

2. LoyaltyLion

Loyaltylion plugin for retention marketing

LoyaltyLion encourages engagement and customer satisfaction. It awards points for actions like sign-ups, purchases, and recommendations.

Points may then be exchanged for incentives redeemable in your business. This encourages long-term loyalty, engagement, and revenue growth.

3. Privy 

Finally, 300,000 retailers rely on Privy to help them acquire and convert site visitors into loyal clients. You can collect an indefinite quantity of information.

Afterwards, use it to offer ‌messages to clients either physically or via email. Privy also works with the other marketing tech stack, including various email service providers.

4. Woorise

woorise retention marketing plugin

Woorise is the best choice if client engagement is important to you. It is a great platform for competitions, prizes, surveys, and quizzes. This tool is useful if you want to produce new leads or develop your subscriber list. It also enables you to increase your social media following. 

5. ProProfs Knowledge Base

proprofs retention marketing plugin

Nothing beats a self-help information base in offering effective and immediate client help.

Customers are growing increasingly anxious. When confronted with a problem, 40% prefer to solve it on their own rather than seek help from the support team.

ProProfs Knowledge Base Software has advanced features and integrations to help you create a self-help knowledge base, documentation, guides, and more.


So there you have it: all the information you need about retention marketing. Retention marketing is not a choice for eCommerce retailers; it is necessary. 

However, if merchants spend their time keeping existing clients, their revenues will skyrocket. We hope ‌the tactics outlined above will assist you in implementing retention marketing in your business.

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