The art of customer retention
Customer acquisition is a costly, time-consuming business. Below are some best practices for doing it right – and top tips on how to keep customers happy.
‘Organic’ social posts are important for brand awareness and building a community, but can also get lost in the noise. Paid social media ads, however, are prioritised and can bring users directly to your site. Paid ads mirror the style and format of organic posts; they simply have a ‘sponsored’ tag. Remember: there’s no ‘one size fits all’ solution. Social ads are trackable (who clicked, who bought and when), so measure the results and tweak accordingly.
Social ads may appear an attractive proposition to drive sales but can also come at a significant cost, so take caution. Subscription eye-care brand Hubble Contacts was largely built via Instagram, and houseplant brand Patch had success as well. ‘While the majority of our sales now come through repeat customers or customers recommending Patch to friends, advertising on Instagram and Facebook have been very useful for building our brand and driving sales,’ says Patch’s Franky Athill. ‘They make sense for startups because they have no minimum spends and you can collect a lot of useful data into the performance of your advertising.’
However Athill says it’s been important for Patch to test other channels to ensure a wide reach and ‘safeguard our marketing mix from the unpredictable cost increases that can occur without warning on these platforms’. Slipper brand Mahabis, for instance, grew a huge customer base through Facebook advertising – before the company ran into trouble at the end of 2018.
Facebook and Twitter ads could cost as little as 30p whilst Instagram ads start at around 50p. As a benchmark, expect to pay between £1-5 per day.
Introducing PPC and programmatic
While social promotion is very well targeted, some brands benefit from reaching a wider audience. On Google, paid-for top search engine results are called ‘paid search advertising,’ otherwise known as ‘pay-per-click’ (PPC). This highlights a business in the top results, so it’s helpful when someone is searching for something a bit vague and needs pointing in the right direction, such as ‘running trainers’. This type of advertising is good for a business that offers a specific packaged product (such as shampoo) or a service with ‘high lifetime value’ (something that will always have a need, such as schools or doctors). Placing relevant businesses in front of people who are already looking for it means there’s a good chance clicks will convert to sales.
Whereas PPC ads are most commonly seen on search engines, with ‘programmatic’ advertising, decisions about where your ads are shown are made automatically based on your business’s goals and audience data. Both forms of advertising can be effective in driving sales, and you can easily control your costs and reach a diverse audience. Although it can be managed in-house, it can often be a complex process – many brand owners outsource programmatic advertising to specialist agencies. If your marketing resources are limited, there could be more effective areas to focus on, such as email.
Email can be a highly effective marketing tool, but experimenting with frequency and content to find the right balance is key. There’s no right answer – different brands will find equally good solutions. Some brands send out a weekly email at the same time and day, but this won’t suit every startup. Christopher Shannon for example, founder of the eponymous menswear label, takes a less-is-more approach to email marketing. ‘Some brands make a point of sending emails on a regular schedule even when they don’t have anything much to say,’ he says. ‘We’ve found that we get a better response if we get in touch on an ad-hoc basis, when we’ve got something specific to say – new stock dropping, for example, or exclusive collaborations.’
While it’s possible to manage an email database on your own, it’s worth investigating mailing tools which can give you information about open rates and conversions. If there’s a flurry of unsubscribes you can find out why and then take quick action. Make sure to test formats and templates on a number of devices. Also note the painfully obvious: are your links correct? Do the images display properly? Getting it right is essential to minimise so-called ‘churn’.
→ Don't forget
Getting permission to contact customers in Europe and the UK via email has become a bit more restrictive following new regulations. Make sure to read up on the latest guidance for GDPR.
Most tools of digital marketing offer real-time data on how a campaign is performing, from the number of clicks on a sponsored post to the amount of time customers spend reading an email newsletter, and vast amounts of data on who is using your website and how. It can be a challenge at first to work out which data points are useful (and why), which will differ from startup to startup based on its key performance indicators (KPIs). An early-stage business might focus more on brand development rather than driving sales, which means the reach of a campaign will be more important than conversion rates. The crucial thing is to keep testing, as what works will change from month-to-month.
The art of customer loyalty
Existing customers are your most valuable prospects. Customer acquisition can be a costly, time-consuming business, and as with any business expense, you’ll want to work out how to get the best value. That’s why selling to your existing customers is so important – if you don’t have to pay Google for a click or Instagram for a sponsored post, a sale is instantly more profitable. Making customers feel they’re part of the brand, even by something as simple as answering their queries on an Instagram post, can help foster loyalty. Startups can reward loyalty with simple offers such as previews of new stock, invitation-only events, first-dibs on sale – whatever is appropriate to your business.
A complaint is a gift
Rare is the startup that never makes a mistake. What can be controlled is your response. However wounding or unfair a complaint might feel – particularly if it’s made in a public arena like Twitter or TripAdvisor – stay positive. It’s important to convert mistakes into opportunities and complainers into advocates. Every way in which you serve your customers is a marketing opportunity. Getting this right is what can make a brand flourish. Thinking of every customer touch point as an opportunity is the best way to turn customers into loyal advocates.
Some key rules to follow:
1) Respond quickly, even if it’s just to apologise for any disappointment, and assure the customer the problem is being handled.
2) Listen carefully to the complaint and ask for more information in a private channel if necessary.
3) Get to the bottom of the issue.
4) Propose a solution and follow through with it.
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