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Have you ever found yourself wondering, “How can I increase my customer retention with marketing automation?” 

If you’re a normal business owner, probably not! That’s because not many people realize that marketing automation and customer retention are related in any way whatsoever. And that’s totally okay…that’s what we’re here to teach you about. By the end of this blog post, you’ll have a basic understanding of what marketing automation and customer retention are, and how you can use the former to increase the latter. Let’s get started! 

What is Marketing Automation?

First thing’s first…what the heck is marketing automation?

Marketing automation is the process you undergo to make your marketing activities occur automatically. Email marketing and integrations are two major parts of it. There are a bunch of different software you can use to do your marketing automation, such as MailChimp, ActiveCampaign, and Infusionsoft by Keap

Basically, marketing automation is a way to make your marketing activities easier, better, and more efficient by using technology. 

Related Reading: Best Marketing Automation Software 2020

Why is Customer Retention Important?

You might be wondering what the point of reading this blog is. Well, we’ll be the first to tell you that customer retention is incredibly important. Why? Because retaining customers are an effective way to make sales and grow your business. If you don’t believe us, just look at what the numbers say:

Now do you see why customer retention matters?

Calculating My Customer Retention Rate

To calculate your customer retention rate, you need the following:

  1. The number of total customers at the end of a period of time (E)
  2. The number of new customers that you acquired over that time period (N)
  3. The number of customers at the start of that time period (S) 

Customer Retention Rate = [(E – N) / S] x 100 

Use the formula above to calculate your customer retention rate over a certain period of time. By multiplying by 100, you’ll get a percent as your final number.

How to Use Automation to Increase Customer Retention

Okay, so now you know what marketing automation is and you understand why customer retention is so important…let’s put two and two together. The rest of this article will discuss the simple ways to use automation to increase customer retention. Once your automation system is set up, it is easy to maintain and will streamline your business operations, which can increase customer retention. 

The main ways that automation increases customer retention are by:

  1. Keeping customers informed
  2. Helping to build loyalty programs
  3. Helping personalize your customers’ experience

To achieve these goals, you can use marketing automation software and strategies. Here are four automation tactics that will help you increase your customer retention rate:

  1. Tiered Loyalty Programs
  2. Email Automation
  3. Lead Scoring
  4. Automated Customer Feedback Collection

Tiered Loyalty Programs

Loyalty programs are an excellent way to reward top customers, and are equally beneficial for customer acquisition and customer retention. In fact, 92% of consumers think that loyalty programs are important to their purchasing decisions, and over half of American consumers join loyalty programs of brands they buy from frequently. This tells us that not only do the majority of customers want loyalty programs, they also do engage with them. 

A tiered loyalty program is a loyalty program that rewards customers on certain metrics such as the amount spent or the number of purchases. The more the customer engages in the specified metrics, the faster the customer advances to the next tier. The higher the tier the more rewards and benefits the customer enjoys. This method allows you to reward your top customers and encourage your other customers to want to reach a higher tier. 

Rewards can include:

  • Discounts
  • Exclusive offers
  • Early access to new products or sales
  • Free shipping
  • Free products

The best part? Once you set up and automate your loyalty program, you won’t have to lift a finger. That’s the great thing about automation: While you do need to invest time (and money) in at the beginning, once it’s set up, you’re good to go.

Email Automation

Another way that marketing automation can increase your customer retention rate is through email marketing. 

Email campaigns are a great way to make sales, nurture customers, and ensure repeat customers. 

Did you know… 

  • Welcome emails with offers can boost revenue by 30% per email (Invesp)
  • Over 59% of marketers say that email is their biggest source of ROI. (HubSpot)
  • Consumers who purchase products through email spend 138% more than those that don’t receive email offers. (WordStream)

Aside from those impressive statistics, automated emails are an essential part of building a complete sales funnel. Sales funnels are effective ways to generate leads and turn those leads into sales, as well as re-engage current customers. (Psst…can you tell that we love sales funnels at Evolve Global Marketing?) 

Emails increase customer retention, but nobody has time to manually send out emails. That’s why you should automate them. Luckily, there are a lot of different marketing automation software you can use for email automation, ranging in price, difficulty, and capability. 

Some options are:

  • ActiveCampaign – For powerful tagging, lead scoring and CRM integrations
  • GetResponse – For advanced list management
  • Drip – Intuitive and flexible workflows
  • Sendinblue – For affordable automations
  • Benchmark – Simple and easy-to-set-up automations
  • Omnisend – For automated ecommerce campaigns
  • MailerLite – Simple automations and landing pages
  • MailChimp – For a wide variety of triggered campaigns

Pick your poison and start automating, ASAP!

Lead Scoring

Lead scoring is the act of ranking prospects against a pre-determined set of criteria to help determine which will be most valuable. The higher the lead score, the more qualified the lead. The more qualified the lead, the higher priority for outreach. This is important because with lead scoring you can have an increased conversion rate, less time wasted on dead-end leads, and a higher lead ROI. 

The most important part to setting up lead scoring is determining what shifts a customer from interest in your product or service to intent to purchase. Once that factor is determined, it can be set-up as a trigger and those particular customers will be assigned to a salesperson or sent an automated email. As you already know, email marketing is a great way to increase customer retention; lead scoring helps your brand target leads more accurately, therefore saving you time and effort.  

Similar to the other three tactics we’re discussing here, setting up lead scoring involves technical skill and automation capability. If you’re not sure how to do it yourself, we recommend hiring someone to do it for you – lead scoring only works if you do it properly, so make sure you do it right. 

Automated Customer Feedback Collection

Customer feedback is an essential part of doing business. You need it to learn how to change and grow to better fit your customers’ needs and your customers need a way of communicating with you. It might be even more important than you thought, however. 

Here’s what the numbers say about customer feedback:

  • Companies that lead in customer experience outperform laggards by nearly 80% (Qualtrics).
  • 84% of companies that work to improve their customer experience report an increase in their revenue (Prnewswire).
  • 73% of consumers say a good experience is key in influencing their brand loyalties (PWC).

When to seek feedback:

  • You don’t want to overwhelm your customers by asking for feedback too often. 
  • Have check-in points that make sense.  
  • For example, check-in with your regular customers every three to four months and seek their feedback through automated emails. Additionally, seek feedback from your customers after their first purchase or if they have not purchased anything in six months to a year depending on your product/service. 

Implementing feedback:

  • Once a customer responds to your feedback email, send an automated ‘thank you’ email.
  • Assign an employee to reach out to customers and give a personalized response. 
  • This method allows you to address any concerns directly and make the customers feel heard. In turn, this will build brand loyalty and increase customer retention. 

You can automate these communication points so that you don’t actually have to do anything manually when collecting the feedback. These feedback check-ins are essential to retaining your customers, and automation makes it simple. 

There are just a few ideas of how to use automation to increase customer retention. Once an automation system is set up, it isn’t complicated to maintain and expand to other areas of your business. And of course, if you need help figuring it all out, you know where to find us. Happy automating!

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About Evolve Global Marketing

Based out of San Diego, CA
T: +1-619-738-4388
E: hello@evolveglobalmarketing.com

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