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"The purpose of a business is to create a customer who creates customers." — Shiv Singh
In the ever-evolving business landscape, where customer relationships are the grounds of success, one word stands tall: retention. Satisfied customers don't just return, they bring lots of newcomers with them, all without any acquisition cost.
Bummer, a renowned D2C apparel brand leveraged this powerful tool to grow their ROI 22X in just 4 months without any Customer Acquisition cost!! Let's dive deep into how Bummer crossed such milestones in so little time!
What positive outcome comes to your mind when you think of retention?
For most of us, it's the great customer experience and the positive word of mouth. Let’s explore some other reasons that state- “retention should be your business’s number one priority”:
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After looking at how retention benefits a business we think that aren't all businesses doing it? The answer is yes, they are but how are their retention efforts different from bummer’s that they don't achieve the same results? Let’s have a look:
To help you not make the above-mentioned mistakes, we have a step-by-step guide for you to build your retention charter.
Let’s discuss these three stages in detail to see what practices are best done at each stage:
Whenever customers come to your website they look at your product multiple times before making a purchase. Now, they may view products like appliances or sofas at least 5-6 times before making a purchase. On the other hand, for a t-shirt, they may visit for a maximum of 2-3 times before the purchase. Therefore, a lot can be done during this period to ensure a repeat purchase from the customer.
This stage starts after the customer has made the purchase, at this stage, they are making a switch from a product they are already using. Your retention communication is what makes all the difference here, the customer may completely switch to your product or may go back to the one they were using.
This is the time your customer is trying out the product, at this stage, you have to ensure that they use your product for at least 8-14 days to make them form a habit. This stage is crucial as it determines whether the customer is coming back to you or not.
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All the above steps require one simple thing- Nurturing the customer. Now, how much you nurture a customer directly depends on the type of product you are selling.
Consider an expensive and long-lasting product like a sofa which we generally purchase say once in 5 years. For this kind of product with a pretty high AOV (Average Order Value), you might have to nurture the customers pre-acquisition to convince them to buy from you.
Post-acquisition you can reduce your nurturing efforts as for a product like this the customer generally forms a habit over time.
On the contrary, let us see a product with a low AOV like apparel that a brand like Bummer sells. For this kind of product that a customer buys say once every month you need to put in medium-level efforts pre-acquisition. However, you need to take the nurturing up a notch post-acquisition.
High efforts for the in-adoption stage are required for these products because you need to tell the customers why they need to switch from their usual brand to yours. Highlight your USPs, engage with them to cross-sell or upsell, and ensure that they use your product at least 8-14 times for them to form a habit.
This is how you can choose the appropriate nurturing level for your customers at different stages of retention, depending on the frequency of purchase, and the average order volume.
Now, let’s understand how Bummer got a 60% uplift in their revenue in just 4 months with a case study.
Sanmaya Biswal, Growth Manager at Bummer joined Bummer 4 months back, and since then their revenue from repeat customers has been soaring!
When we asked him what’s his secret, he told us the secret sauce to his retention strategy which he calls his - Sandwich Campaign Management Method.
Let’s see what this strategy is all about.
Bummer Got 22X ROI from just one Launch Campaign with 0 CAC while launching a new category using existing customers all from its secret sandwich strategy. This strategy consists of three layers, the top, the middle, and the bottom layer. Take a look at what these layers comprise:
This is the beginning of the campaign, at this stage three main things are to be done:
Note- However, that is not necessary, you can send the same message blast to everyone except the customers who have made a purchase in the last 14 days and whose order is not delivered, as they may return the product already in transit to get a cheaper price.
Say you send the first blast on SMS the customer is notified but doesn't engage as they get busy or distracted. But, upon getting another notification on another channel like WhatsApp after some time they will be reminded of the campaign and may make a purchase.
This is a crucial stage of this strategy as this is what brings the boost in your ROI. This stage is where you make customer segments to send them personalized campaign messages according to the interaction they have had with your business.
These are the main divisions- The Positive Variable, The Negative Variable, and Exclusion can be defined based on:
Now you can send personalized messages based on these segments.
Say a customer who has purchased a certain category of products but has not made a purchase in the last 3 months then you can send a message to them saying something like-
It has been a long since they visited you and give them an offer to lure them into buying.
Your goal is to maintain the Positive Variable customers as loyal customers and to turn the Negative Variable into loyal ones.
This stage marks the end of the campaign and here we focus on three channels with different response times. This stage is required mainly to create FOMO among the customers and to push them to buy from you. This is how you will send the messages via different channels:
Note that all these channels are aimed at creating a sense of FOMO and making the customer buy from the sale.
Now after completing the campaign journey let’s see how and what metrics are to be measured to see how successful the campaign is for you.
Different channels require different metrics to be measured, let’s see what are they:
In conclusion, customer retention and effective retention strategies are crucial in today's competitive business world. It's important to remember that retaining customers is an ongoing effort that demands dedication and adaptability. Stay connected with customer feedback, industry trends, and new technologies as you work on your retention strategies for long-term success.
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