Practical Retention Tips for Q4

Hey Squad! This newsie comes to you from a cozy corner of my Downtown LA hotel room.?

Started the trip on Tuesday with a CX discord meetup, an ECC meetup on Wednesday morning, a Retention Roundtable?? at FabFitFun on Wednesday afternoon, a fun video recording with Gorgias + some friends after that, a disco party that night, and a full-day conference on Thursday. Oh, and a redeye home Thursday night…

?? ?? Two weeks ago, we hosted the first-ever retention-focused conference with 75+ retention marketers from some of the best brands in ecom, like Gymshark, Brooklinen, DVF, Nestlé, Malin & Goetz, Our Place, Peloton, Supergoop, Tarte, L'Oreal, Bark, LoveShackFancy, Dyptique, John Varvatos, and many more.?

Retention Uncensored was packed with roundtable discussions on ecom retention, and we walked away with 40+ pages of practical notes.

Instead of dropping all 40 pages on you, I thought I’d compile some highlights into fun, digestible Dos and Don'ts that can help guide your retention strategy. 1,800+ of the most actionable and practical words on retention marketing, maybe ever???

Let’s dive in.?

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?We’ve got a TON to talk about–let’s dive right in.

RE: Segmentation & Personalization

Do:

• Segment with purpose: Focus on broad but actionable segments based on customer behaviors such as product preference or purchase frequency. Brands like Brooklinen and Peloton effectively start broad and refine based on real data. Look at revenue per message, revenue per send, engagement per message, etc.
• Personalize based on behavior: Brands like Peloton have successfully segmented based on customer engagement levels, sending different communications to highly active users versus those who have fallen off the wagon.
• Use first-party data wisely: With third-party data becoming less accessible, brands like Tarte focus on first-party data (like on-site behavior) to tailor messaging and offers based on individual interactions. Quiz data is also super meaningful and widely used.

Don’t:

• Overcomplicate segmentation: Avoid managing 50 micro-segments. Brands like Gymshark keep segmentation easy to handle by focusing on key behaviors, not unnecessary complexity.
• Ignore your data: Brands often miss the mark by not updating their segments as customer behaviors shift. Your customers’ preferences aren’t static, so your segmentation shouldn’t be either.
• Rely on a one-size-fits-all approach: Mass messaging is no longer effective. Brands like John Varvatos realized that a more tailored approach drives higher engagement and better retention outcomes.

?RE: Growth & Acquisition

Do:

• Align CAC & LTV: Brands like TULA develop acquisition-specific SKUs to bring in customers and use cross-sell opportunities to build LTV, creating a seamless link between growth and retention strategies.
• Use organic acquisition channels: Brands like Our Place and Peloton have seen great results from leveraging word-of-mouth and community-building, which helps lower acquisition costs over time.
• Leverage partnerships for growth: Collaborations between complementary brands (like LoveShackFancy and beauty brands) help bring in new customers while aligning with brand values.

Don’t:

• Over-discount during key events: Over-pushing discounts can harm your long-term retention. Brands like Tweezerman limit discounts to maintain brand value and focus on luxury appeal during big events like Black Friday.
• Rely solely on paid ads: Paid acquisition can drive growth, but without a solid retention strategy, you’re left with customers who only come for a discount and never return.
• Forget about customer experience in acquisition: Driving growth means nothing if the onboarding experience is poor. Brands like Brooklinen ensure smooth post-purchase journeys that build loyalty from the first touch.

RE: Email Marketing

Do:

• Use omnichannel strategies: Email paired with SMS delivers real-time updates and rich offers. Brands like Supergoop and Our Place have had great success with this combination, using SMS for quick hits and email for detailed content.
• Test and optimize frequently: Regular A/B testing of subject lines, content, and timing is critical. Brands like Tarte continually test different subject lines to see which resonate better with their audience.
• Incorporate personalized product recommendations: Bark successfully uses email to recommend related products based on previous purchases, driving higher engagement and repeat purchases.

Don’t:

• Spam the inbox: Sending multiple emails a day leads to unsubscribes. Tarte found that properly timed emails during product launches yield better results than daily email blasts.
• Forget about mobile optimization: With most users checking emails on mobile, ensuring that your emails are optimized for smaller screens is key. Brands like Brooklinen focus heavily on mobile design for higher engagement.
• Ignore cart abandonment: Abandoned cart emails are a huge opportunity to recover lost sales. So many brands mentioned using personalized follow-ups to nudge customers to complete their purchases.

RE: CX & Retention

Do:

• Leverage CX feedback: Use customer data from the CX team to guide retention strategies. Brands like Jones Road Beauty used customer feedback to create personalized makeup tips, increasing engagement and repeat purchases.
• Train your CX team to identify churn risks: Educate your CX team to pick up on red flags during interactions—whether it’s recurring complaints or customer frustration. Bark uses this insight to inform its retention strategy.
• Empower your CX team to solve problems proactively: Brands like Dyptique empower their CX team to go above and beyond, offering thoughtful resolutions to problems that could have led to customer churn.

Don’t:

• Ignore CX insights: Feedback from your CX team offers valuable retention clues. Failing to integrate these insights can lead to missed opportunities for customer loyalty and churn prevention.
• Let CX operate in a silo: Failing to align your CX team with other departments like marketing and retention can result in disjointed strategies. Ensure that the feedback loop is strong across teams.
• Underestimate the power of follow-ups: After a customer reaches out with an issue, follow up to ensure they’re satisfied. Brands like Our Place use this approach to turn negative experiences into positive, loyalty-building moments.

RE: Creative Retention Tactics

Do:

• Innovate beyond discounts: Brands like Malin & Goetz and LoveShackFancy focus on offering personalized gifting options or early access to new products, fostering loyalty without undercutting margins.
• Reward loyalty with exclusive experiences: Brands like Supergoop have implemented VIP programs that offer early access to launches or special events for their most loyal customers, boosting long-term engagement.
• Leverage user-generated content (UGC): Brands like Tarte use UGC in campaigns to make customers feel involved, driving higher retention through community building.

Don’t:

• Over-rely on discounts: Discounts can devalue the brand. DVF keeps retention interesting with personalized incentives, using VIP perks and exclusive events over price reductions.
• Forget to track the impact of your tactics: Implementing a creative retention tactic is only half the battle. Ensure you’re measuring its impact on repeat purchase rates, AOV, and LTV.
• Neglect emotional engagement: Brands like LoveShackFancy connect emotionally with their customers through storytelling, fostering a deeper connection that goes beyond transactions.

RE: Retention Planning

Do:

• Set realistic goals: Use historical data and align cross-functional teams to create retention goals. Brands like Happy V focus heavily on subscription trends and churn moments to guide their planning.
• Include customer feedback in planning: Brands like Nestle use customer insights to create retention goals that reflect what customers are actually asking for, rather than relying solely on internal assumptions.
• Use cohort analysis to track retention: Brands like Peloton use cohort analysis to understand how different groups of customers behave over time, which informs their retention strategies.

Don’t:

• Rely solely on LTV: While important, LTV isn’t everything. Metrics like repeat purchase rate or time between purchases can provide a better picture of overall customer health.
• Neglect retention marketing: Acquisition might be flashy, but consistent messaging across the customer journey—before and after purchase—plays a crucial role in retention. Brands like Our Place make sure retention marketing is part of their strategy from day one.
• Set goals in isolation: Retention planning should involve all key stakeholders, from CX to marketing to product. Brooklinen ensures that its retention goals are aligned across departments for better execution.

RE: Retention KPIs

Do:

• Track a range of KPIs: Beyond LTV, Bark and L’Oreal look at metrics like repeat purchase rates, average order values, and time between purchases to get a fuller picture of retention health.
• Focus on engagement metrics, too: Peloton closely tracks engagement metrics, like how often customers use their bikes, as a leading indicator of retention health.
• Use predictive analytics: Brands like John Varvatos use predictive models to forecast customer behavior and identify churn risks early.

Don’t:

• Ignore churn signals: John Varvatos tracks the time between purchases to predict churn, sending timely offers before customers drop off.
• Obsess over vanity metrics: Open rates and click-through rates are great, but if they aren’t tied to meaningful outcomes like conversions or retention, they aren’t telling the full story.
• Assume customer satisfaction equals retention: Even satisfied customers can churn. Brands like Peloton focus on engagement and repeat behavior to truly measure retention.

RE: SMS Marketing

Do:

• Use SMS strategically: SMS should be personalized and timely. Boll & Branch uses data to target their SMS marketing for optimal engagement, balancing between offers and non-promotional content.
• Send exclusive offers: Make customers feel like they’re part of an exclusive club by offering SMS-only deals or early access to sales. Supergoop does this by sending exclusive messages for restocks and new launches, driving higher conversions.
• Segment your SMS list: Not all customers want to receive the same messages. Brands like Tarte segment their SMS lists based on purchase behavior, sending more targeted and relevant offers to increase engagement.

Don’t:

• Overload SMS channels: Sending too many messages can lead to high opt-out rates. Focus on high-value interactions, like Our Place, which limits its SMS sends to important updates and exclusive offers.
• Send generic messages: Unlike email, SMS is a more personal channel. Generic, mass-market SMS messaging can feel intrusive. Brands like Bark avoid this by tailoring messages to individual customer preferences and behaviors.
• Forget about compliance: Ensure that your SMS strategy complies with regulations like TCPA and GDPR. Failing to secure proper opt-ins can result in fines and damage to your brand’s reputation.

RE: AI in Retention

Do:

• Use AI for personalization: Implement AI to help automate personalized customer journeys and product recommendations, as brands like Nestle have done to improve retention and customer satisfaction.
• Leverage AI to optimize communication timing: Brands like Our Place use AI to determine the best time to send emails or SMS based on customer behavior patterns, increasing engagement rates.
• Use AI for predictive analytics: Brands like L’Oreal are using AI to identify churn risks early by analyzing customer behavior patterns, allowing them to take action before customers leave.

Don’t:

• Over-rely on AI for everything: While AI can help scale personalization, it’s crucial to maintain a human touch in CX for complex issues or higher-value customers. Peloton balances AI-driven automation with human interactions for high-touch customers.
• Ignore data privacy concerns: Ensure that your AI tools are compliant with GDPR and CCPA regulations. Misuse of customer data can damage trust and retention. John Varvatos ensures that customer data is handled with transparency to build trust.
• Let AI replace creative strategies: AI can optimize processes, but it should not replace creative strategies that build emotional connections with customers. Brands like Jones Road Beauty still rely heavily on human creativity for messaging and engagement.

RE: Loyalty Programs

Do:

• Build communities: Brands like Dyptique and Bark leverage loyalty programs by offering exclusive experiences and early access, building emotional connections with their customers.
• Offer tiered rewards: Brands like Peloton use tiered loyalty programs that reward their most loyal customers with exclusive perks, creating an incentive to keep engaging with the brand and moving up the loyalty ladder.
• Keep your program fresh: Regularly update the rewards and experiences in your loyalty program to keep customers engaged. Tarte frequently adds new incentives and experiences to keep their loyalty members excited and engaged.

Don’t:

• Let loyalty programs go stale: Keep loyalty programs fresh with new perks and experiences. Regularly refresh offers and content to keep customers engaged.
• Offer generic rewards: Your loyalty program rewards should feel personalized and unique to your brand. Offering generic discounts that every brand does won’t keep customers engaged long-term. Brands like LoveShackFancy offer personalized perks that resonate with their high-end customers.
• Focus solely on transactional rewards: Brands like Bark focus on creating an emotional connection with their customers through loyalty programs, offering experiences, and community engagement, not just transactional discounts.

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers,?

Eli ?? P.S. Looking for inspo on your next email/sms campaign? I know you will love this .?