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How To Use Personalized Marketing To Improve Customer Retention

by Arthur Zuckerman

Did it ever happen to you that you were talking about a particular product or brand, and the next minute, you saw an ad for the same?

Welcome to the realm of personalized marketing. This is not focused on creating triggers for sales but on creating an experience that will make customers return repeatedly.

There is a reason why brands follow Vilfredo Pareto’s 80/20 rule. By understanding 20% of your user base, you can lay the roadmap for increased sales from returning customers.

Long thing cut short — Acquiring a new customer will cost a brand 5 times more than retaining a customer that can continue giving business.

How do Personalization and Customer Retention Go Hand-in-Hand?

Imagine going into a hotel for the second time, and while checking in, they say, ‘We see last time you ordered a hypoallergic pillow. We’ll send it up for you right away to your room’.

One-to-one personalization or personalized marketing is the key to retaining customers, irrespective of your domain.

When the front desk person looks upon the information associated with your name from the last booking and automatically responds to your needs, it gives a sense of fulfillment. You, as a customer, feel delighted and valued. This feeling transcends into trust, making you return to the same hotel chain every time you book.

While the above instance is more individualistic, personalized marketing is designed for a wide range of customers with a broader message.

Benefits of Personalized Marketing

Personalized marketing aims to establish a trust factor with valued customers. With a tailored experience across all marketing channels, brands form relationships that align with the customer’s choice, lifestyle, location, and interests.

There are various forms of setting personalized marketing in motion. The most prevalent ones are through –

In fact, research revealed almost 83% of consumers agreed that good loyalty programs influence their buying decisions from time to time.

The most crucial benefit of personalized marketing is that it helps retain customers effectively. This personalized marketing has added benefits as follows:

1. Improve customer lifetime value

CLV is measured as the total business a customer brings to the table throughout its association with the brand. It helps brands align marketing and sales strategies for customers with high CLV, the most important being personalization.

Personalized messaging improves customer satisfaction and loyalty, which leads to increased engagement and repeated purchases. This automatically increases the CLV of that customer. Other methodologies include offering personalized recommendations and offers that can increase the purchase value each time.

2. Increase loyal customers

Personalization is a great way to convert your first-time users into loyal customers. It helps in standing out in the competition and build trust with customers. This includes understanding user behavior, taking feedback seriously, rewarding customers with exclusive offers, and offering cross-selling opportunities.

One way to do this is by offering different options, features, or packages that suit different segments. When you offer customized options with first-hand personalizations, including the customer name or preferences from the last buying details, it transcends into brand loyalty.

Another way is taking the help of a customer service virtual assistant, who will manage all the customer-centric tasks for you.

3. Improve ROI metrics

Personalization is not just about customer experience. It also helps in backend strategies by helping you pinpoint the major ROI metrics you must track.

Every marketing and sales campaign is tied to an ROI metric. When implementing personalized messaging, it is essential to see if it has a positive impact on the following metrics:

  • Average revenue per user
  • Click through rate
  • Conversion rate
  • Customer lifetime value
  • Churn rate

For example, Chris Masanto, CEO and co-founder at PetLab Co. says, “When working on our personalized marketing strategies with retention in mind, we place a large focus on improving our ROI metrics. By analyzing and optimizing the return on investment, we can allocate resources more efficiently toward personalized campaigns that truly resonate with our audience. This ensures that our efforts are cost-effective and deliver tailored content that nurtures customer relationships. As a result, not only do we aim to retain more customers, but we also hope to foster loyalty and advocacy, leading to a sustainable and profitable customer base over the long term.”

Tips to personalize brand messaging to retain users

Overall, personalization and customer retention go hand-in-hand. Mathematically, customer retention is calculated as follows:

(Total no. of customers at the end of the period – New customers acquired) / Total no. of customers at the start of the period

Let us now look into the tried and tested tips and tricks to use personalization for customer retention.

1. Amplify onboarding experience

Nailing the onboarding experience for your customers is your first step in your customer retention strategy. Your onboarding messaging helps users know how exactly your product or services will serve their individual needs.

For instance, a project manager will have different goals for an onboarding tool than a freelance content writer. To personalize the onboarding flow, implement a welcome survey to learn about the user, preferences and needs to place them in the appropriate segment for future marketing campaigns.

For example, Salesforce asks for the job title of a new user signing up for a free trial to personalize the onboarding flow.

2. Use generative AI platforms for hyper-personalization

Take personalization to the next strata with generative AI tools that implement data analysis techniques. This gives you a deep understanding of user behavior and needs, helping you acquire behavioral data to create highly contextual messaging.

Generative AI puts data analytics and machine learning algorithms in the forefront that help analyze user behavior from past purchases, browsing patterns, and social media activities. This information is used to accurately decipher or predict user’s needs and preferences with potential future actions.

For instance, YouTube’s recommendation engine helps recommend videos based on previous viewing and channels you subscribe to. Similarly, Amazon shows related products or frequently bought together.

In short, you predict user behavior before it happens and tailor personalized messages at the right time to trigger or aid that action. It isn’t surprising that almost 41% of B2B brands want to invest in AI to personalize customer experience.

3. Build trust through transparency

When a customer makes a purchase, it does not mean they trust you. It takes time for your customers to start trusting you. While trust is an important factor influencing buying decisions, it is also not a one-size-fits-all tactic.

Transparency is a key contributor to building trust. If you are hiding policies and rules, it will hamper the trust factor. Your customers want you to be transparent. For instance, if your pricing plans exclude certain features, ensure it is mentioned on your pricing page. If there are any added conditions, mention them on your website so there are no discrepancies and friction in the user journey.

Another way to build trust is through communication. Listen to your users and engage with them to create brand recall and trust, much like Trello does on social media. It need not always be about the product or brand. Sometimes, a little conversation on nothing goes a long way.

4. Offer personalized experience across all channels

Omnichannel messaging is crucial for retail companies but positively impacts B2B brands. Accounting for all devices and platforms helps build a seamless customer interaction experience. One method is to use the same messaging across all channels without running into duplicate issues or getting penalized by search engines and social channels. The trick is maintaining a consistent brand voice instead of using the same phrase everywhere.

Another way is to tie user behavior across all channels and devices to offer a seamless experience. An example of how this is done is Google Chrome. Google is a champion of omnichannel messaging, and it is reflected in its browser, Chrome.

Users logged into Chrome have their browsing history, account, and activities automatically synced into every device. So much so that users can even access tabs on the phone app that they left open on the desktop. As a result, Chrome holds the majority market share in the browser industry.

5. Implement a customer feedback loop

It is hard to devise personalized messaging if you don’t know how your customers feel about you. Customer feedback is a vital part of the retention program. It provides a system to collect and analyze customer reviews and surveys.

There are several ways to implement a feedback loop –

  • Run Net Promoter Score Surveys
  • Encourage customers to participate in user testing and focus groups
  • Encourage customers to give feedback and win coupons or exclusive discounts on their next purchase

Your goal is to understand if your product or services cater to your target customers’ needs. To do this effectively, you can personalize the surveys for each segment.

For instance, using the onboarding information on the job role of your users, you can create segments for engineers, designers, marketers, and product managers. Then, you send product review surveys to engineers with questions about your product’s development and design. Similarly, marketers can receive surveys on how your product helps capture leads or enable marketing collaborations.

This gives you detailed insight into the usability of your product across different customer profiles and helps you improve your product.

6. Educate customers through personalized content

Creating educational content for your customers is a long-term plan but worth it. This initiative includes creating self-help content for customers to refer to while using your product or services.

Educational content helps customers locate solutions independently and resolve issues quickly. It is always better than reaching out to the support team. However, educating customers does not always mean creating a knowledge base that revolves around help docs. It also includes content that goes beyond your products and services.

For instance, Hubspot Academy courses cover generic customer support, sales, and marketing topics. It helps Hubspot users discover ways to use the tool in everyday workflow.

Last-minute Tips

Start building a customer retention strategy that is worth your time and resources. Add to these, some more strategies must go hand-in-hand with these.

  • Apologize when you make mistakes. However careful you are, this might just happen, and it’s okay. Owning your mistake and apologizing can neutralize the effect of that error and lessen the risk of losing valued customers.
  • Inspire your customers. While personalized messaging is the way to retain customers, it is also about giving your customers a reason to continue being associated with you that goes beyond profit and loss. Don’t do it to fake it, but do it because you care about a good cause.
  • Exceed expectations. Nothing is better than surprising your customers with an added gift or benefit they won’t forget. Such gestures induce long-term trust and brand loyalty that remain undeterred through time.

Wrapping Up

It is important to note that not every strategy or tip will perfectly fit the bill. But as long as you keep your customers at the forefront of your retention program, you will have happy customers who’ll love to come back to you every single time.

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