In general, I have found that it is at least five times cheaper to retain a customer than acquire a new one. But often that multiple is higher.

I know this because I maintain detailed customer transaction records and track my marketing campaign activities, costs and conversions.

As a result, I work hard on my customer retention strategies.

The methods I can think of available to contact customers for retention marketing are as follows:

  1. Transactional communication, such as sending purchase receipts or communicating about a purchase. I customize my receipts to include additional content to drive interest in my products and brand.
  2. List email by communicating through my customer email list to those that subscribe to my list.
  3. Social posts to my social channels.
  4. Social retargeting by creating custom audience files from my customer database and using them in social and pay per click advertisements.
  5. Direct mail communication through postal or other delivery services.
  6. Logistics/shipping by including items like flyers and coupons in direct-to-consumer product shipments.
  7. Product packaging by including call-to-action statements on the product labels to drive a response from a customer.
  8. Loyalty programs to reward customers for repeat business and referrals to new business.
  9. Physical contact through events or other meetings with customers.
  10. Personalization of my website for each customer when they return for site visits.

I have more discussion about the above methods in this post.

Taking the above methods in context, one way I work on customer retention is to reward repeat purchases with free products.

Here is what I do on a weekly basis to make this happen:

  1. Monday is the day each week where I run prior weeks metrics.  I track a wide variety of metrics that I consolidate into one spreadsheet dashboard.  You can use any day of the week, but I like to use Mondays to analyze prior week’s results.
  2. One of those metric pulls originates from my customer database.  I have a large report which I call the Core Marketing Report, a fairly sizeable data dump that I can filter and sort in an infinite number of ways to analyze customer data and create direct marketing campaigns.
  3. I filter the report based on purchases the prior week and omit everything else.
  4. That filtered data then gets exported in CSV format and opened in Google Sheets.  You can use Excel, but I prefer to use Sheets because it is much easier to share files with others and access on any device.
  5. I further cut this report down by eliminating a bunch of columns of data that I do not need for this activity.  The columns of data remaining include the following:
    1. Customer name: I split first, middle and last in my database but in this report, I concatenate into one column;
    2. Address: their full contact information is concatenated into one column;
    3. First Contact Date: when they first became a customer;
    4. Total Spent Payments (Sum): total they have spent with me since their first purchase;
    5. Payments (prev. 12 Mos):  here I am looking for recency vs total spent payments to see how active they have been in the last 12-months;
    6. Products Sold: this lists in one cell all the products they have purchased with me;
    7. Payment Dates: this list all their payment dates in one cell;
    8. Last Payment Date: this lists the date of last payment received on a purchase;
    9. Primary Email Address: their email address;
    10. Referral Source Name: how they were referred to me (this data can be hard to collect, but for my pet company, I have managed to get about 75% of our customers to tell me this so I know how my marketing is performing);
    11. Campaigns: what specific marketing campaigns I have used to target them.  For example, if I do social retargeting, snail mail or specific segmented email campaigns, I create the targeted list first from a data pull in my database and also tie those campaigns to the customer;
    12. Prior Gifts:  this is a list of products or other offerings I have previously offered to a customer to thank them for their business.

From the above data, I can easily see of the customers that purchased last week and the additional activity they have with my business.

Accounting for what prior loyalty gifts I have given (point 13 in the list above), I then tailor specific additional giveaways.

Depending on the size of the list and what I am giving away, sometimes those additional giveaways come in the form of emails that I create and send in bulk, or if the list is smaller or the giveaways more customized, I use semi-customize emails to each customer.

I prefer semi-customized emails because it is much more personalized, but sometimes the list size gets too big and becomes too time-consuming so I have to resort to using my bulk email distribution software.

Now, if a customer I am sending a free giveaway has opted out of my email list, then it kinda become a bit of a gray area if I can email them again.

Technically I probably cannot because my loyalty emails are not about their transaction (see Transactional emails above).

But I have not yet run into a problem where a customers gets irked with me for emailing them when they have opted out.  They are already a repeat buyer so they probably want to hear from me and I am sending something free.

I could also just use snail mail to communicate with them but that raises costs.  Since it has never been a problem for me, I will continue to use email.

So, what are my giveaways?  Mostly free digital premium content that I already have for sale or which I specifically create for customer loyalty. I am a big fan of content marketing and create a lot of content, which can be mixed and matched in different ways to create unique offerings for customers.  Using content and digital products keeps my hard costs low.

But not always.  For really good customers I will surprise them with free product.  For my pet company in particular, since I mostly sell locally and have events for customers, I often giveaway free product when I see them in person. This cuts down on my shipping and processing costs to send them something for free.

I also note what I offered to each customer in my database so that in the future, I do not offer the same thing, which would show in the Prior Gifts column in the above report. Or I might still offer the same thing if it is a physical product.  But if it is a digital product, then I will not offer it again.

Once I am done with this activity, I save the above report so I have a record of what I did in a particular week.  I also share this report with others in my business for other tasks that need to happen as a result of this data and using Google Sheets is the easiest way to do that.

Providing personalized giveaways weekly has been very successful for me. Customers love it and appreciate that I take the time to think of them and send them value-added offerings.  This has resulted in more purchases and customer referrals.

What I am doing is using technology and a little effort to offer one-to-one personalization, but doing it with some scale, versus one-to-many that is the norm.  And quite frankly, most of us have become smart and numb to these supposed personalized offers coming from companies because we know that is not the case.

So what is required to do the above?

You need to sell direct-to-consumer, of course, and you need a database to capture all customer data, transactional data, and any other data you have that you want to add to your customer database.  The free Google sheets app is used for the exported CSV files.

If you are a small consumer product company you may think it is not feasible to have a customer database due to technology costs and complexities, but that is no longer the case.  Technology has and continues to advance such that even the smallest company can make use of fairly sophisticated enterprise-level database marketing technology for extremely low cost.

And with this technology you can do things like I have outlined here to help with customer loyalty to retain customers and maximize customer lifetime value.