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Mechanics of Personalized and Automated Offers in Retention Marketing

Digital Marketing
July 10, 2024
5 mins
Content

Svitlana Fursa, Head of the Retention Marketing Department at Promodo, explains how to increase customer loyalty through retention marketing channels and how personalized offers encourage users to buy more. 

What Problems Does Retention Marketing Solve?

Retention marketing entails continuous communication with potential and existing customers through the most convenient channels like email, Viber, SMS, and mobile pushes among other channels of direct communication with users. Our goal is to keep the business audience engaged and increase the frequency of their purchases and customer LTV.

The main tasks of retention marketing: 

1. ‍Boost repeat purchases. When there is sound communication, users develop brand loyalty and are ready to buy from you again.

2. Increase the conversion rate of users attracted through other channels. A user may come from contextual advertising though haven’t bought anything right away. This is where retention marketing will come in handy: a pop-up with an offer to subscribe to the newsletter for a discount. This will allow you to keep in touch with customers in the future and send them offers.

3. Upsells. Retention marketing is a great way to suggest buying supplementary products, as well as more expensive categories or products to increase your customer's lifetime value (LTV).

4. ‍Reviews and NPS. Retention channels let you get feedback from customers you’ll further use to improve products and marketing strategies. Make sure you ask them how have they felt about your service. Did call center managers do their job well? Is your product of high quality? And whether they are ready to recommend you to their friends.

Retention Marketing Essentials
Core Aspects of Retention Marketing

Personalization and Automation — Trends in Retention Marketing 

Personalization

Personalization assumes the creation of a relevant offer based on a user's preferences, previous purchases, views, shopping cart experience, etc. 

80% of users are more likely to make a purchase when brands offer customers a personalized experience and well-designed offers. Personalization reduces customer acquisition cost (CAC) by up to 50%, increases revenues by 5-15%, and improves marketing ROI by 10-30%. 

Let’s view two examples to explain how it works: 

Imagine that an electronics store is running a week-long promotion - a 10% discount on all smartphone accessories. This comes as an incredible offer for customers who have recently purchased a smartphone or browsed accessories on the website but never made a purchase. You may seek your target audience for such discounts even deeper. 

"Congratulations! We’ve noticed that you were recently looking for a new phone case. We would like to help you with your choice with our recommendations and a personalized 10% discount.

To improve the effect of a personalized offer, it is vital to know when it’s best to send it to the customer. It is essential to spot the right moment - analyze how long it takes to wait after the previous activity, a purchase, or a site visit. Spot the most appropriate day and time to do it.  

Automation 

Only 9% of market leaders believe that their ESPs are well integrated with other marketing channels. What does this mean? Email marketers are still not using automation to its fullest potential. 

‍Marketing automation helps you set up campaigns once so that all scenarios work automatically. But you need to invest time and resources. Consider user activity and costs, and check out for the most cost-effective solution. 

How to Create a Personalized Offer?

Don't solely focus on the purchased product while making a relevant offer. You should consider the following criteria:

Was it the first user’s purchase and they just got to know your brand? Or was it their 10th  purchase already and they’ve been with you for a long time? Does the user know who you are and what your loyalty program is? Leverage this background knowledge to shape your content.

What was the average cheque of all purchases? How much revenue has the customer brought in? Use this information to choose the right price segment and communication channels. By understanding how much revenue the user has already brought in, you’ll understand how much you may invest in encouraging your customers to make repeat purchases.

What is the lag between purchases? We understand that there are patterns for how often users make purchases - 3 months, six months, etc. This depends on various factors - the products you offer, the product range, and your pricing policy among others. We recommend tracking this data in your corporate CRM.

By understanding how much revenue you’ve generated from a customer, you’ll know how much you may invest in making them buy more from you.

When we’ve spotted the factors that impact the offer, we need to understand your customer’s activity, i.e. where they view your messages, how they respond, and where they make purchases. Based on this data, select the best channel for further communication.

Personalizing Customer Offer
Making a Personalized Offer

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Types of Personalized Offers in Retention Marketing

Relevant Offer Based on a Previous Purchase 

Offers based on previous purchases
Making Customers Buy More

Work mechanics are as follows: a user has purchased a dress on your website. In a few hours, you make an upsell offering them accessories that will match the dress. The products should match each other. Then you may further extend this chain and offer the customer products from other categories that may also fit their choice.

This is how you keep communicating with your customers and manage the average cheque and revenue. 

Relevant Offer To Boost Effectiveness 

To increase efficiency, consider how inclined a customer is to a particular type of reward. Check out whether it is important for them to be in trend and buy new products. In this case, you need to change the communication - emphasize that "this is the top brand-new product that has never been seen before."  

Another customer may want to buy at a good price: at a discount or with a personalized offer. In this case, apply your loyalty program and promo codes.

The FOMO effect positively impacts ad campaigns by increasing the conversion rate (CVR). Time-limited offers. A promo code valid for one day only or within the next three days will best motivate customers who intend to buy from you.

How to Automate Retention Marketing Mechanics

There are lots of ideas you can realize, so be sure to opt for the finest options. 

Automate everything that works well for you so you won’t have to waste time on it anymore. 

Almost everything in digital marketing is prone to automation: from usual transactional messages like ‘order accepted/delivered/leave a review’ to suggesting individual offers to customers. 

Automating Communications with Customers

The most automated conversion chains are behavioral chains. They are built on user behavioral patterns: the products they have viewed and bought, and the best-fit offers you may suggest.  

This also includes upselling and cross-selling strategies that will help you increase CRV and LTV. Leverage loyalty programs that will remind your customers about the use of accumulated points. 

You do not have to set up automated campaigns for each client manually. Today, multiple systems process customer data. Make the very best use to automate your in-house department's work. At Promodo we cooperate with Creatio, a no-code platform for workflow automation and CRM.

Types of Automated Campaigns in Retention Marketing

Abandoned Cart 

This is the most popular trigger chain: an email or email series sent to a user who has put items in the cart but has not made a purchase. Our task is to get the user back on site and make them buy as much as possible. 

Abandoned Carts
Trigger Chain

When a user does not complete a purchase within a certain time, i.e. 30-60 minutes, the system records it as an abandoned cart. That's why we can set up an automated campaign that sends the first reminder email shortly after the abandoned cart is detected. Therein, we write that "the product is still waiting in the cart" and wait. If the order is completed, in a few days, we connect a relevant offer with other products of the business; if the user ignores it, we continue communication through personalized incentives, discounts, or special offers.

I suggest involving more communication channels and experimenting with different titles, images, price placements, etc. My experience shows that social media messages work well whenever you show your product in the cart. An image like "You left the product" or a call to action (CTA) to complete the purchase will also work well. Svitlana Fursa, Head of the Retention Marketing Department at Promodo

AI-Suggestions for the Next Purchase

Recommendations based on previous purchases, a customer’s browsing experience, and user behavior patterns are all important here. If a customer has made a purchase, artificial intelligence will analyze user behavior who have bought the same product and generate a list of what they have viewed after the purchase. 

While the machine learning tool generates recommendations for individual customers, you may use them while segmenting your customer base. 

Cusomer Base Segmentation with AI
AI to Segment Customer Base

Let's Craft Your Best-Fit Retention Marketing Strategy!
Promodo Marketers Are Here to Automate Your Business
Written by
Dayana Danyliuk

Journalist at Promodo


For over 4 years, I have been working as a journalist in the communications and marketing industry. I help brands communicate effectively through written content, engage with market experts, and create professional materials on topics related to business and marketing, sharing insights on working with marketing tools.

Published:
July 10, 2024
Updated:
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