Retention Email Marketing: 7 Techniques to Reduce Churn Rate

07 October 2019Reading time: 6 min.

Retention is not merely a strategy to apply only when the “churn rate” rises into the danger zone, but an activity that should be carried out continuously: here are 7 email campaigns you can use to be perceived as useful and by the customer’s side.

Every company has revolving doors: thenumber of customers acquired alwayscorresponds (naturally) to the number of customerswho leave.

This last fact has a very specific name:it’s called churn rate, and it is noless important than the number of new customers in terms of ROI or turnover.

We are dedicating today’s blog post to churn rate, putting some tactics to counteract it on the table through email channels. Let’s start with some basic notions.

What is churn rate?

Churn raterefers to the customer abandonment rate.This is a certain percentage that compares the customers who have stopped aservice with those who have chosen and confirmed it.

Understandingthat it’s impossible for this percentage to be zero, as a certain number ofabandonments is only natural, thechurn rate helps us understand the dynamics between new entries and exits sothat a company can always have the ratio under control.

All you needis a simple formula to calculatechurn rate: take the total number of customers lost in a period of time anddivide them by the total number of customers your company has.

(Customers at the beginning of the month – Customers at the end of the month)/Customers at the beginning of the month

Counteracting churn rate: retention activity

Definingretention as loyalty may beincorrect, but it explains the concept rather well.

We can saythat the churn rate is inverselyproportional to the retention rate, or the confirmation of your service bythose who have already chosen it.

Customer retention is the set of activities implemented by a company to retain its customers over time, therefore reducing desertions to a minimum. In the broadest and most general sense, it indicates the maintenance of continuous relationships of exchange with customers over the long term.

The effectiveness of a sales strategy addressed to an acquired customer is 60-70%, while the effectiveness of a strategy addressed to a new customer is 5-20% (source: Invesp Consulting).

In pursuing the goal of retention, a company can use different techniques and tools. In this blog post, we’ll focus on a particular channel you can use to apply a very effective retention activity: email.

7 Retention Email Marketing Tactics

Through retention email marketing,companies can engage their customersand strengthen their relationship with the brand, offering usefulness and added value.

Let’s look at some retention techniquesapplied to email marketing.

1. Create and send useful content

How can you convince the customer of thequality of your product/service and induce him or her to stay with you? The  sinequa non condition is that they know howto take advantage of the full potential of the product available to them.

The more customers know and understand theproduct, the more they will appreciate the features, consider them useful and,consequently, be willing to renew theirloyalty.

2. Invite customers to webinars and courses

Especiallyfor companies operating in the software field, webinars, online or classroomcourses are fundamental tools they can use to increase customer engagement, offer useful things, and cultivatebrand identity.

In additionto providing useful information about the product, the goal is to increase theperception of the company as reliable andavailable to meet customers’ needs.Here’s an example from Teachable…

3. Send recap emails about the customer’s activity

Let customers know how they are using the product/service and what results they are obtaining: this is a great way to make them feel like you are by their side, improving their perception of usefulness and reliability.  

This is avery interesting option which consists in sending customers an email summarizing some data on their useof the product/service. Every brand can provide numbers and information basedon its business model, as long as they are relevant to the recipient.

Spotify does this very well in periodic emails which include figures andinformation related to listening on the platform:

4. Design a product newsletter

From a focuson the customer, we move more towards a focus on the product: one option topursue is that of a more editorialnewsletter you can use to communicate important, hot off the press news to customers (if they happened tomiss it), anything coming up in the near future, and any other kind of usefulor possibly entertaining information.

Here are the macro-themes around which a product newsletter could be detailed on a quarterly basis:

  • What’s new
  • What’s next
  • Ongoing projects
  • Upcoming events
  • Reading tips.

5. Take advantage of the potential of milestone emails

Perhaps the name may mean nothing to you, but Milestones are those emails that celebrate some kind of result, a recurring event, or an “anniversary” between the customer and the company. This is another precious opportunity that helps the user feel like you’re by their side.

Need an example? Check out this Uber email celebrating the thirdanniversary of customers and the brand.

6. Engage inactive customers

Since a certain churn rate is natural, sois a certain rate of inactivity:this means that as days and weeks pass, some customers stop interacting with and using the service or product. In manycases, inactivity is the precursor of abandonment.

It therefore becomes essential to manage toreactivate these dormant customers.How? With targeted emails that communicate closeness and know how to trigger an action by the customer, withuseful content or the request to get in touch with the company to solve anyproblems that prevent use.

Here’s an example of a reactivation email:

7. To support retention: onboarding, new launches, cross-selling, and upselling

Marketing objectives are not always parallel, but they often intersect, and in this sense we have included various activities as final techniques: onboarding, launches, cross-selling and upselling. While they all perform different tasks, they also contribute to the goal of retention.

For example,take the following email: this is the launch of a new service, but at the sametime, it has the function of re-initiatinga conversation with the customer, showing a greater depth of the offer:

Cross-selling and upselling work in thesame way: both are techniques that will make the customer understand that thecompany’s solutions go far beyond what they imagine.

In summary

As you will have understood, retentionmeans using targeted strategies thatare able to highlight the good choices made by the customer.

With this post, we wanted to explain to youhow retention activities are not simple accessory strategies to be implementedonly when the churn rate rises into the danger zone; on the contrary, they are activities to be carried out continuously.

Our advice is to develop a retention email marketing strategy, defining a set of campaigns and then checking their effectiveness. You can start today by requesting a free MailUp trial: you’ll have the platform available for 30 days to create, send, and track your campaigns.

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This article was written by

Andrea Serventi

Andrea Serventi

Editor

I was born in 1986 in Milan, where I graduated in Modern Literature and started writing for online newspapers, magazines and TV news programs. Having now converted to marketing and the digital world, I am a Content Editor at MailUp: I read, listen, collect ideas, and write about what email marketing is and how to use it strategically.

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