Many retailers focus a large portion of their marketing spend on acquisition. But what good is pouring money into an acquisition strategy if 4 out of 5 customers never return for another purchase?
The goal when you gain a customer is to at least ensure they pay back their customer acquisition cost. In the long run, acquisition ends up being more expensive than retention.
In fact, it costs 6 to 7 times more to acquire a new customer than keep an existing one. Because of this, retention marketing is essential to grow, sustain, and improve your online business. It seems that a growing number of retailers are catching on to this trend.
According to a recent survey of leading online retailers, 59% of respondents said they are allocating more than 30% of their marketing budget to customer retention. This is a 55% increase in retention investment compared to last year’s results.
One reason for this uptick could be that retailers are realizing that retention drives revenue.
According to Cortney Wright of Artbeads.com, “Retention is very important for us. Once we get customers to make their second purchase, they fall in love with the experience and continue to buy from us. We created personalized campaigns based on individual customer qualities so that each customer feels special and wants to remain a part of our community.”
Artbeads.com’s automated email campaigns have very high levels of customer engagement, which bodes well for their retention rates. Since implementing Windsor Circle powered campaigns, Artbeads.com has increased its number of repeat buyers by 73%. Additionally, more than 90% of their revenue comes from repeat customers, so retaining this group has been essential to their success.
To learn about the specific email campaigns that led to these results, download the Artbeads.com case study.
For other valuable insights about customer retention in the eCommerce industry, read the 2016 Retention Marketing Survey.