When brands review sales metrics, they frequently focus on the number of new customers acquired. And it makes sense — businesses need to consistently move prospects through the customer journey and convert them into buyers. But all too often, brands overlook an absolutely essential aspect of the customer experience: what happens after the sale.
In the previous post in our Digital Marketing in 2022 series, we discussed strategies you can use to turn more of your visitors into eventual buyers. For this installment, let’s dive into a sometimes neglected (yet crucial) element for brands — your post-purchase strategy.
Small increase in retention, huge increase in profits
Having an effective post-purchase strategy is important because it helps your brand improve customer retention. Acquiring new customers is fantastic, but retaining your current customers is even better. Why should brands put more attention on retention? To start, acquiring a new customer is somewhere between 5 and 25 times more expensive than keeping an existing one.
Plus, your current customers are apt to be your most lucrative in the long run, says Frederick Reichheld of Bain & Company, who invented the Net Promoter Score (NPS) as a quick pulse on how well you’re doing. His research finds that increasing retention rates by just 5% can raise overall profits by 25% to 95%.
How can a small increase in retention have such an outsized effect on profits? Your existing customers are 50% more likely to try new products and services your company releases, and they’re willing to spend 31% more compared to your new customers.
Focusing on customer retention helps your brand:
What are some ways brands can start shifting focus toward retention?
Go all-in on retention during peak times
Peak periods provide a wonderful opportunity to dial in your post-purchase strategy.
Odds are, you know precisely what time of year your channels will get the most traffic. For some retailers, the holiday season rules. However, many brands experience peak times during other major holidays or seasonal events (Valentine’s Day, summer, back-to-school, etc.).
No matter the time of year, when your brand is in the midst of elevated traffic, it’s imperative to implement a powerful post-purchase strategy to retain your new subscribers and buyers acquired during the peak period. This action will help you turn seasonal shoppers into those who engage with your brand throughout the entire year.
Using transactional messages for retention
How can you ensure you’re engaging customers after the purchase and maximizing retention rates? Transactional messages are a key component. These email and SMS messages are sent to individual customers based on their transactions (examples include order confirmation and shipping confirmation messages). Since transactional messages often have the highest engagement rates, this is the place to pull out all the stops.
For example, as the use of Buy Online, Pick-Up in Store (BOPIS) accelerates, sophisticated retailers are now adding transactional messages to communicate process details, then confirming when the order has physically been delivered. Or, a “thank you” email sent in between the order confirmation and shipping confirmation email adds a touchpoint that contains additional marketing content to encourage repeat purchases.
“As brands look for ways to keep shoppers informed and engaged during and after the delivery process, focus on post-purchase efforts that are elevated from basic order and shipping confirmation messages,” says Karen DiClemente, senior director of strategy for Listrak. “After all, no one is ever going to alert you to a missing marketing email, but they are paying keen attention to order confirmation or shipping details. Maximize this existing real estate so you don’t waste the fact that you already have eyeballs on these messages.”
Leveraging customer data in transactional messages
We’ve already highlighted the importance of collecting zero- and first-party data. Transactional messages provide an additional opportunity to leverage that data for personalized offers.
After imparting order or transaction details, you can get creative and attract attention by leveraging the zero- and first-party data you’ve collected to serve up relevant, highly personalized product recommendations to drive cross-sells and upsells. Incorporate a call to action to engage with your brand on social or visit the nearest brick-and-mortar location. Or include invitations to write a review or join referral and loyalty programs. You can even consider using the purchase data available via your email/SMS partner to serve different content and messages for first-time versus repeat customers and tailoring it to the merchandise they have purchased.
Email and SMS for post-purchase success
With so much competition in e-commerce, brands must differentiate with personalized interactions if they hope to retain customers. Every stage in the buyer’s journey is an opportunity to deepen your customer relationship and gain loyalty, so brands that neglect the post-purchase process do so at their peril.
Transactional messages are an efficient, automated way to give customers the personalized updates and messages they want while also creating additional buying opportunities. Listrak’s integrated marketing platform helps you create a coordinated cross-channel messaging strategy for maximum customer engagement.
If you’d like to see how the platform works, schedule a demo. And stay tuned for the final installment in our blog series, where we’ll cover the “Last Mile” for your messaging strategy.
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