Retention marketing is all about keeping your customers coming back for more. However, if you are not getting the right customers in the first place, even the best retention marketing efforts could be in vain.
Getting quality customers into the top of the funnel will naturally improve your customer retention metrics and boost long term profitability.
This means attracting customers who are likely to be interested in your product or service and who are likely to be satisfied with it.
If you do not get quality customers into the top of the funnel, no amount of retention tactics will work. Businesses today are trying the same thing over and over again on customers who are not interested in more of your product or service or who are not satisfied with it. And when the most common marketing tactics rely on finding customers who look the most like your current customer base - you are just perpetuating the cycle.
We’ll take one of our customers for example. We looked at 125,000 new customers they acquired, predicted the LTV those customers would generate over the next 90 days and bucketed them from highest to lowest LTV. Those customers then received the exact same set of 25 emails in a campaign spread out over 90 days. At the end of the period we looked at how much revenue was actually generated from this cohort and the results were startling:
As you can see in the chart above, the customers we predicted would perform best outperformed the rest of the cohort by a large margin. The real takeaway here is customers who look the same and get treated similarly will end up behaving very differently - if you can figure out which ones will look and act like the customers on the right, you can dramatically boost your business’s results.
Please don’t misinterpret us - retention marketing is still incredibly important for growing your business. Great customers you acquire won’t automatically start repurchasing from you regularly (unless you get really lucky on product-market fit!). But getting better customers in the door will make your retention marketing efforts and results really sing.
There are a few things you can do to get quality customers into the top of the funnel:
Target your marketing efforts to the right people. This means understanding your target audience is really your highest performing customers and seeing what they are looking for. Tools like Angler AI take advantage of artificial intelligence to help marketers of all sizes accelerate this process.
Reassess your product offering - are you delivering real value to your customer base and folks who should love what you provide?
Improve customer service. This will help you keep customers happy and coming back for more.