A relentless focus on user acquisition (UA) blinds marketers to the more lucrative opportunities that can emerge when they engage consumers for the long haul. It is not only short-sighted, but it can also be expensive. Depending on which source you look at, acquiring a new user can come with a price tag that is anywhere from 5 to 16x more than the cost to cultivate the loyalty of an existing customer.
And even if you pay to get a new customer, there is no guarantee they will buy into your offer. While the chance you can sell to a new customer is slim, the probability of selling to an existing customer is between 60% and 70%. And those existing customers are also 31% more likely to spend more on their average order value with your business.
When you factor in that the average Cost Per Install of a mobile app in North America is $5.28, compared to EMEA at $1.03, APAC at $0.93, and Latin America at $0.34, you quickly realize that there is a need for a more self-sustaining strategy than spending on ads to drive downloads.
The Lasting Impact of Retention
Thinking about customer lifecycles, not just customer acquisition equips marketers to drive positive results for their business and build a competitive edge. The rewards of investing in retention speak volumes. Seminal research from Bain & Company reveals that efforts to increase customer retention rates by even 5% can increase profits by anywhere from 25% to 95%.
HUD Improved Retention By 20%
Dating app HUD took this advice to heart. Concerned about their retention rates, they decided to implement CleverTap and begin a more data-driven segmentation effort. By grouping users into segments such as “at-risk,” “need attention,” or “champions,” they were able to create targeted campaigns that brought inactive users back into the app.
A big part of the strategy was communication. By mixing education about new features and personalization to encourage frequent use, HUD was able to chalk up a more than 20% improvement in user retention.
How to Build More Engagement, More Trust
As HUD proved, the only sustainable way to improve retention is to engage with users. Moreover, marketers should harness messaging to build upon that initial trust to deliver a meaningful and memorable experience that spans the customer lifecycle. That process of building trust through engagement allows your brand to connect with your customers in ways that can only strengthen the bond.
Perfect Your Onboarding Process
Inevitably, user interest in your app can wane over time. But there are ways you can slow this decline significantly, thus extracting more value from every customer period of time. This is the positive outcome when you optimize the onboarding process to ensure all users understand and appreciate all aspects of what your app can offer.
Effective onboarding can be the simplest and most effective way to demonstrate your commitment to giving value to the customer. Do it well, and it will build trust in the user’s mind about how your app benefits them, paving the way for retention.
It’s also important to reinforce the experience – and customer education- through personalized and relevant messaging. There are many channels in the marketer toolbox, including push notifications, emails and SMS. Building educational nurture emails that teach them about the product and providing onscreen tooltips to explain new features are also part of an effective omnichannel strategy.
Inspire Customer Loyalty
Because existing customers are 31% more likely to spend more on each order, you’ve got to give your customers the white-glove service. Create experiences that celebrate their loyalty. Celebrate their milestones — their birthday, their 100th order, their second year as a customer. Build up rewards programs for them so they can choose how they want to receive your gratitude. All of this will move your mobile app users to make repeat purchases for more points and rewards.
Create Two-Way Communication
Avoid spamming your users with irrelevant or poorly timed marketing messages. Instead, align your messaging – across all channels – with consumer real-time context. Imagine a user has bought shoes for an outfit. A well-times and well-thought recommendation could entice the same shopper to buy a companion item such as matching shoes. Significantly, the window to close that sale is only open for a limited time, so you also want to ensure you can deliver notification in the “moment of inspiration.”
Most importantly, make sure you show you’re listening. Create opportunities for the customer to voice their opinions on your product or service by asking for their opinions via social media, email, or in-app surveys.
Orchestrate Campaigns With the Right Tool
Whether you’re sending out a promotional campaign or trying to win back inactive users, your engagement will fall flat without a platform that can handle your messaging needs. Find one that has the bandwidth to send personalized notifications and communications to millions of users across granular customer segments.
Retention isn’t just a driver for growth and profitability, it becomes a very real way to give your business the competitive advantage it needs to survive. Because once you treat your customers like the VIPs that they are, they won’t consider leaving for your competitors.