A Beginner’s Guide to
Retention Marketing
For Online Consumer
Businesses
Why You Need An Awesome
Retention Marketing Machine
Who should read this?
Growth Hacker
Product Marketer
Marketing Agency
Employee
Retention Marketer
Campaign Manager
CRM Manager
If you are or aim to be one of these, it becomes your ultimate goal to generate more
revenue for your company. This e-book will help you with just that.
Why should you read this?
Read this if you:
Have just started with your role in a fast paced growth company
Are not sure of what marketing campaigns will work for you and why
Are unsure of how to align your campaigns and processes to achieve higher revenue and faster growth for your company
An exercise for you
Just answer these simple questions with a yes or no:
Acquiring more users and maximizing the footfall/downloads will help you alone to
grow the revenue of your company?
Sending blast emails about offers to all your users gives a boost to your revenue and
you should send them on a daily basis?
To carry out any marketing activity, do you devote 50% of your time planning it and
50% of the time executing it?
If at least one of your answers is a yes, we recommend you to read on.
For others, head directly to page 11 where you learn about different nuances of
Retention Marketing.
02
What will you learn?
Loads. Everything you need to bolster your confidence in user retention. Here is the
table of contents:
Traditional consumer marketing
Stress on customer acquisition
Current state of traditional marketing
Was the traditional way good enough?
Retention Marketing
The new marketing funnel
A customer first approach
Nuances of B2C Retention Marketing
Difference between B2B and B2C retention
Roadblocks
Overcoming these roadblocks
Key takeaways
Next steps
03
Consumer Marketing
First, what is a Consumer Business?
A Consumer Business is one that sells
directly to an individual who buys the
product for personal use and not for
resale (in short, he is the end user of the
product).
Any time someone goes to a store (brickmortar or online) to purchase a toy, shirt,
Cola
beverage, or anything else, they make that
decision as a consumer. Their decision
however can be influenced by marketing
and advertisements.
So that brings us to Marketing to a Consumer
Marketing to a consumer is all about
Cola
Cola
creating awareness and selling products
Cola
and services to individual buyers. A soft
drink advertisement on YouTube is the
company marketing their product to its
potential customers.
How were businesses marketing to their Consumers?
By promoting their product to as many users as possible. We call this general productbased marketing, which has, to date, been the most common form of marketing among
businesses.
04
Differentiate your Product while
Marketing at High Scale
Comapnies relied on the strength of their product - its features, price point or other
standout factor (aka the unique selling point - USP) that separated it from the rest of
the competition.
For example, company A produced packaged water that were available in sleek bottles.
These were easy to carry and store. All other companies at the same price point made
only standard sized bottles. To influence user’s buying preference, marketing for
company A pivotted on their variety and utility.
Have a look at the differentiating strategies of top packaged water manufacturers.
They all manufacture water, but the key lied in focusing what they did best (or
different).
Poland
Spring
Aquafina
Deja Blue
Dasani
Fiji
Smartwater
Perrier
San
Pelligrino
Voss
Bling
H2O
BOTTLE DESIGN:
Meh
Neat
TRENDINESS:
Not
Ver y
COST:
Cheap
Expensive
CONTENT:
Water
Uh, Water
All these companies manufacture water, but to succeed they had to
concentrate on their USP
05
Major Focus on Acquiring more Users
To market their product, the major focus was on creating awareness among people.
This gave the product more visibility. People who were not interested, automatically
dropped off leaving businesses with users who purchased from them. The old
marketing funnel looked like this.
This used to work for companies that targetted mass users. Eg: A company that
manufactured salt. Everyone needs salt. But will this work for an app that sells
women’s shoes? Sure, every woman needs shoes, but remember:
The intense competition in the market
Decreasing attention span of the user
User’s preference to brands which know them and care about their needs
User’s impulse of buying the best at the least price
When small or mid-sized online companies today adopted the current ‘acquisition
heavy’ approach, they ended up getting plenty of downloads, but the long-term
numbers, unfortunately, told another story.
06
Product Based Marketing will help
you get 60% of your Sales. But is that
enough?
According to a report, only 2 out of 10 users who downloaded Android apps, continued
to use it after 3 days (see graph below).
What does this say? Sure, your website or app got the expected traffic but not every
user was convinced to click “buy-now”, “subscribe”, or “sign up”. Would you say that the
users found utility in your product? Will this help you get more revenue?
Moreover, the report says that users who passed this ‘3 day phase’, at the end of 30
days, only 5% of them remained after completing their desired goal (this could be a
purchase, a subscriptiopn or a sign-up).
This was because in the old marketing funnel, companies were not paying attention to
bringing customers back. Users would find the product attractive, use it once to avail
some introductory offer, and leave within a week or month to move to a competitor or
would abandon the product itself. Users had no incentive to stay back.
07
Just Acquiring Users is not good
enough.
Users abandoning your product so soon is a bigger loss than you think:
It’s an immediate loss of revenue and hard work that was put into acquiring the
user. As a result your Customer Acquisition Costs (CAC) go up.
A lost opportunity to grow that user over time. One user gone is one user less to
contribute to your revenue, i.e. lower Customer Life Time Value (CLTV).
Companies are now reluctant to continue with this approach. They’ve realised that
keeping a user for a longer period of time will ensure he spends more over their lifetime
is the key to success.
08
How do you solve for Users not coming
back?
It’s simple. Start focussing on bringing them back to your business - instead of
concentrating on acquiring countless new customers, increase the profitability from
those you already have.
CUSTOMER ACQUISITION
Activities that drive relevant traffic
to your online properties
VS
CUSTOMER RETENTION
Activities that improve the user experience
and turn more visitors into repeat customers
USABILITY AND
USER PREFERENCE
COMMUNICATION
CHANNELS
A/B TESTING
ANALYTICS
IDENTIFYING USERS
SOCIAL MEDIA
MARKETING
& ADVERTISING
EMAIL
MARKETING
MOBILE
MARKETING
MORE VISITS
CUSTOMER
SATISFACTION
Increase in purchase frequency (how often a
typical customer buys) and conversion rate
(ratio of number of purchase to users).
SEARCH
MARKETING
USER ONBOARDING
09
Retaining an Existing Customer is
better than Acquiring a New one
The bottom line: increasing customer retention rates by 5% increases profits by
25% to 95%.
— Harvard Business Review
10
The New Marketing Funnel
The shift has led marketers to adopt a customer first approach that has made way for a
new marketing funnel.
This funnel merges pre-purchase and post-purchase stages to present a complete view
of the entire customer lifecycle. Marketers should now own the complete customer
lifecycle journey to maximize CLTV.
11
A ‘Customer First’ Approach to
Retention
For a Customer First approach, you
First identify the kind of customers that will be interested in your product/service
(Awareness)
Reach out to them and get them onboard (Engagement and Product Discovery)
Guide and lead them to a purchase (Purchase & Adoption)
Pre-empt their needs constantly
Give them reasons to come back (Retention)
Build the brand (Expansion & Advocacy)
Steps 3-6 form the core of Retention Marketing.
Retention Marketing is all about creating engaged customers that return to your
business to shop again.
12
If Retention Leads to Growth, are all
Companies using the same Strategy?
Not quite. That is because strategies and approach vary with the person you are selling
to, what you are selling, and so on.
The two kind of companies that are out there: one that sells to a business - Business
to Business (B2B) and one that sells directly to a consumer - Business to Consumer
(B2C), use different tactics to market their products/service.
The term ‘Retention Marketing’ had come into play in early 2015, when B2B companies
were using strategies to reduce their customer churn (or user abandonment). Hence, a
lot of online content majorly focusses on B2B retention.
Google Trend results for the term ‘Retention Marketing’
Avoid confusion. Make sure the right practices are implemented in your consumer
business. Acknowledge the difference between marketing to a business and marketing
to a consumer. Let me explain this with an example.
13
B2C Retention: An Example
Here is an example to give you some perspective.
Perhaps you want to head out for a beach holiday this summer. What would you do?
DAY 01:
Checking for options; Channel: desktop, website
DAY 03:
Surfing social media; Channel: phone, social media app
DAY 03:
App link in ad; Channel: phone, official app
DAY 04:
Explore options; Channel: phone, official app
DAY 04:
Signs up for offers and newsletter; Channel: phone, official app
DAY 11:
Discounts on hotels; Channel: desktop, email
DAY 11:
Tickets booked; Channel: desktop, website
14
The final purchase took
2 weeks
3 different screens and
4 communication channels
Would these tactics work for a B2B scenario? Not quite. The end users are mostly
teams. So, you need a communication channel that can be accessed collectively by the
entire. This could be a website, an email or a phone call.
Hence, while marketing to a B2B, one works hard interacting one on one, to streamline
the buying process in order to save time and money. This explains why a B2B purchase
is based more on logic and why a consumer’s purchase is typically emotionally
triggered (whether by hunger, desire, status or cost).
15
B2B vs B2C Retention
Different nuances of B2B and B2C Retention Marketing
Due to this, you need to employ different strategies and metrics to retain customers for
your company.
16
Only 21% B2C companies claim to
have a Retention Team. Why are these
numbers so low?
Consumer businesses find it difficult to implement retention. Here are few reasons
why:
Maximum marketing budget goes into acquisition of users.
75% of the users remain unknown. Without their contact information it becomes
difficult to communicate with them.
Users invariably switch between devices - mobile to desktop or vice versa.
Tracking user behaviour and timely engagement on these touch-points becomes
tricky.
Once you know how to connect with the user on all touch-points, you need to
make sure your communication is coherent. User should not feel spammed.
B2C has thousands or millions of users. To adopt a customer centric marketing
approach means abolishing the worn-out bulk emails. However, with increase in
users, these ‘one on one’ engagement strategies become difficult to scale.
User’s attention span has become much lower. One needs to constantly reinvent
ideas to interact.
7
Identifying user intent is very tricky - every user action on your portal signals his
intent. Eg: For a supermarket, the size of his shopping cart, enquiries about
a specific product etc shows his intent of making a purchase. Similarly, for an
online store, if the user searches for shoes, reads comments/reviews, makes price
comparisons, means he is more likely to make a purchase than a user who is
simply surfing items once a fortnight. Retention for B2C is all about identifying
these markers.
8
Identifying the right technology to help you fill this information gap requires effort.
To make retention marketing work for you, it’s vital to answer all these questions.
You need a way to communicate, engage, retain, and monetize your users more
successfully and with less effort.
17
Marketing Automation helps you
overcome these Roadblocks
Today, Marketing Automation, as a software aids all of this. It is a platform specifically
designed to drive engagement via many channels. A platform that lets you understand
your users, their usage patterns on a daily basis, and helps you to communicate with
them at their best moments. It helps you:
Identify users (both anonymous and known) and understand user behavior
Create a coherent marketing communication plan across multiple channels
Prevent over-communication across all channels of engagement
Automate these complex engagement workflows via a single platform
Experiment, analyze your campaigns
Scale-up successful experiments
Dedicate more time in designing and optimising campaigns than just executing
them
There’s never been a more promising time to be a marketer. In our next e-book, we will
explain how you MA can help you implement and scale your retention efforts. You can
pre-book your copy here.
18
Key Takeaways
Let’s summarise the e-book for you:
Consumer marketing was all about increasing visibility of your product/brand
The traditional ways are no longer working for current online businesses
Acquisition, without retained users was filling a leaky bucket. Customer acquisition
costs go up and CLTV goes down.
Owing to this businesses are using retention as the most important strategy for
growth.
Keeping a user for a longer period of time will ensure he spends more over their
lifetime.
This shift led to adoption of a new marketing funnel that focuses on customers.
It lays stress on communicating with the user to make him come back to your
portal/product.
Your main goal is to guide those users to become avid customers and, ultimately,
ambassadors.
Not to be confused with B2B retention where purchase is based more on logic and
why a consumer’s purchase is typically emotionally triggered
Consumer today is present on more than one device and channel. Hence, all the
modes of communication need to be utilized to get maximum impact.
But make sure the communication is coherent.
To do this, and do it well, you need a platform specifically designed to drive
engagement via many channels. A platform that lets you understand your users,
their usage patterns on a daily basis, and helps you to communicate with them at
their best moments.
19
Next Steps
To achieve retention like industry leaders Netflix, Spotify etc., you first need to identify
your users and channels of communication. We call this finding the right marketing
mix. Start by observing what the giants are doing.
Have a look at some great examples from Netflix. For each one of them below, identify
the following (we have filled the first one for you):
Channel type - website.
Message type - on-site message.
Who is it intended for - returning user. One that has an account.
Aim of the message - personalised welcome message and recommendations
based on past history.
What would it change for the company - More views, user longevity, repeat
subscriptions
20
Want to start working on your own retention strategy?
Talk to our specialists
Or learn from Journey Gallery - pre-made retention workflows for problems that are
most frequently encountered by online consumer businesses.
WebEngage is a multi-channel user engagement platform which automates
communication across users’ life-cycle. It enables you to connect with them via. Web
Messages (notification, survey and feedback), In-App Messages, Push Notifications,
Emails and Text Messages.
+1 (408) 890-2392
support@webengage.com
@Webengage
/Webengage