5 Data-Driven Marketing Tactics for Customer Retention

22/04/2019, Marketing, Guest Blogger

There’s no denying the power of data for your ecommerce marketing strategy. You can use what you know about your customers and their purchase history to create optimised marketing messages that really pack a punch. Here, the marketing maestros at dotdigital share their top tips for using data to improve customer retention.

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There are no second chances at first impressions. Like many walks in life – a first date, a business meeting, a job interview – how you start your conversation with customers will impact the long-term relationship.

 

Ecommerce epitomises this. As a merchant, you have to invest in your marketing arsenal – a plan of attack that ensures the customers you acquire remain customers for life. Quell any temptation they might have to go elsewhere.

 

Ask yourself the following:    

 

  • Is your technology up to scratch?
  • Do you have the right strategy in place?
  • Are you utilising the right data to optimize both?

 

Technology, strategy and data are the holy trinity of customer retention. Nail these elements, and you’ll be well on your way to transforming customers into lifelong brand advocates.  

 

Choosing your tech-stack can be difficult, so let’s try to make this as easy as possible. There are several platforms and ‘add-ons’ out there; but if you can’t store the right data you need to power your revenue-generating campaigns, your results will suffer.

 

So what data do you need?

 

#1 RFM modelling

 

Combining RFM and persona modelling will help you deliver relevant campaigns that improve performance. The key is understanding your customers – both potential and existing – without being too creepy in the process. For those customers who have already started shopping with your brand, you’ve an armoury of historical data at your fingertips – so use it!

 

Recency – the time since a customer’s last purchase

 

Use this information to target customers at the right time. If they’ve purchased with you in the last week, maybe don’t send them that 30% discount you’re launching. Likewise, if they’ve not placed an order in the last six months, tempt them to buy with a win-back offer.

 

Frequency – how many times a customer has placed an order

 

This data helps you coordinate your campaigns. If your customer is a frequent low-spender, you could recommend products (with a similar price tag) regularly. However, if your customer is an infrequent high-spender (let’s say they make a big order twice a year), lessen the frequency of your campaigns and catch them at the right time.  

 

Monetary – the monetary value of customer purchases

 

This data helps you identify your low-spenders from your VIPs. You can segment based on average order value (AOV) or lifetime value. Enrol high-spenders onto a loyalty program that rewards and incentivises their custom, and tempt customers with a low AOV to up their spend.     

 

#2 Make the decision easier for the customers

 

Ultimately, you want to make the customer’s choice easier to make. The psychology of ecommerce teaches us that excess choice can overload the consumer. Think about an overcrowded inbox. How will you stand out from the crowd?

 

In today’s fast-paced world, markets are maturing quickly and becoming more saturated. Time-poor consumers will find it increasingly difficult to reach a decision on the product they need, the price they’re willing to pay, and the retailer to buy from.

 

This uncertainty doesn’t bode well for marketers or consumers. Retailers should let data drive their decision-making – because consumers will, sooner or later, respond to campaigns that complement their behaviours and indulge their interests.

 

#3 Apply a holistic approach to data

 

Aside from purchase history, remember to continue using basic data like name, age, and location. All of this information increases the relevancy of your marketing messages.  

 

What’s more, preferences can go a long way. Sure, behavioral data is a sure-fire way to drive product recommendations that will resonate with customers. But you can’t ignore the explicit information that a customer has handed over to you. If they say they like diffusers, sell them your best scents! If they prefer not to be contacted on email, suggest SMS as an alternative.   

 

Once you have all of this data in one place, you’ll be able to paint a clearer picture of your customer. You can use your customer insight to create various personas and target lookalikes.

 

Example:

 

Name: James

Age: 27

Location: London  

Preferences: Blazers, jeans, t-shirts and vests, trousers, shirts

Last purchase date: 04/03/19

Purchases in the last six months: 3

AOV: £95

Lifetime value: £2,072

Marketing preference: Email

 

#4 Make customers feel at home

 

We know that driving timely, relevant messages will engage, convert, and retain customers at scale. Above all, they’ll make a lasting impression.

 

But it all starts with the first meeting: a well-formulated welcome series should breathe life into the customer relationship. It should set the scene and apply a standard for your wider marketing automation programs.

 

Welcome-program musts

 

  • Set the tone of the relationship.
  • Define the key benefits of signing up.
  • Showcase your USPs – what are you about?
  • Ask customers who they are – what do they like?
  • Offer an incentive to spur the first purchase.

 

The best way to tailor future campaigns is to leverage both explicit and implicit data. This maximises the relevancy of your message.

 

For example:

 

During the welcome program, a customer fills in your preference centre. They tick the boxes against any products they’re interested in – namely, vegan snack bars.

 

You’ve already captured basic information, like their date of birth, during the email sign-up process. Later, the customer starts engaging with you on email. As a smart marketer, you track their web-behaviour to keep on top of what they’re interested in.

 

Leading up to their birthday, you send them a special offer to redeem online – a standard practice. To enhance the relevancy of the message, you pull in hyper-relevant product recommendations, based on either the previous browse or preferences. These might be superfood smoothies or protein vegan boxes.

 

Delighted with their birthday treat and the products on offer, the customer places an order.

 

They might not go on to remember what you did or said, but they’ll always remember how you made them feel.    

 

#5 Remember the holy trinity of customer retention

 

Every marketer should be striving towards this kind of customer-driven experience. Providing such an experience requires an optimal flow of data, the right technology, and a well-thought-out strategy.

 

Ask yourself: do you have the data all in one place to make these triggered campaigns work?

 

 

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About the author

dotdigital

Authors Gavin Laugenie (Head of Strategy & Insight) and Chris Cano (Copywriter) are part of the dotdigital team. dotdigital Engagement Cloud is the platform of choice to help you expand and evolve your customer engagements. Connecting store data to your customer base, Engagement Cloud allows you to deliver meaningful messages to more shoppers, inspiring loyalty that will supercharge sales and increase your revenue.

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