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The Complete Guide to E-Commerce Retention Marketing

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In August 1994, a man by the name of Dan Kohn made the first-ever online transaction by selling a CD of Sting’s Ten Summoner’s Tales to a friend in Philadelphia. 

Since then, e-commerce has come a long way and continues to grow as more shoppers turn to devices and computers as the primary tools for discovering and buying new products. As the industry has grown, so have the marketing strategies used by e-commerce businesses to promote products, tell their brand stories, and retain customers. 

Whether you’re starting fresh and want to learn about the basics of e-commerce marketing or you’re ready to execute a robust marketing effort, this content piece is for you. 

We’ll dive into all the key elements of the buyer’s journey from the first website visit and capturing information to nurturing loyal customers, encouraging reviews and referring friends, and much more.

Chapter 1: Retention Marketing 101

Historically, e-commerce marketing has focused on driving in new customers. However, several factors contribute to a changing approach. Due to rising competition and advertising costs, data privacy, first- and third-party data, and third-party platforms, retention marketing has become one of the most important e-commerce marketing strategies.

But what is retention marketing and why is it useful? Here's a deep dive with everything you'll need to know, including strategy, tips, and even downloadable templates.

What Is E-Commerce Retention Marketing? AdobeStock_465918935 [Converted]

Retention marketing is a strategy that markets to existing customers to foster a strong brand-customer relationship and create a cycle of repeat purchases. 

Unlike customer acquisition, the goal of retention marketing isn’t to increase the number of customers but rather to:

  • Increase the customer return rates and reengage past customers
  • Decrease the customer churn rate by keeping them in the buying cycle
  • Increase purchase frequency and keep the customers in the buying cycle more often
  • Increase activity in loyalty programs, reviews, user-generated content, and referrals

Although customer acquisition is the better route for new and growing businesses, businesses with a solid customer base should focus their efforts on retention marketing. However, new businesses still should build the basics of email capture and email marketing. There are pop-up templates from our partner Justuno, plus pre-built emails from our downloadable guide and in Klaviyo, that new stores can just "turn on" to improve retention.

With a robust retention marketing strategy, companies can benefit from:

  • Increased conversion: With effective email and SMS popups, 7-15 percent of people who don't buy from a marketing campaign are willing to exchange their email address or phone number. Email and SMS will convert much cheaper than remarketing ads.
  • Increased profits: It’s worth it to keep customers around. Only a 5 percent increase in customer retention can increase company revenue by 95 percent, in some cases.
  • An easier base to sell to: Brands have an easier time selling to existing customers compared to finding new customers.
  • Increased likelihood of returning customers: Satisfied customers are more likely to return to purchase your product again.
  • Lower costs to retain customers: Across the board, it’s more expensive to gain a new customer than it is to keep one around.
  • Existing customers are more likely to spend more: In fact, according to research, existing customers spend 31 percent more than new customers.
  • Existing customers become advocates for your brand: A happy customer is more likely to recommend your products to a friend or family member looking for a similar product.

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What Strategies Should Be Used? 

Now that we have a solid understanding of the benefits, let’s talk about how to build a loyal customer base. Here are a handful of tested retention strategies and marketing tactics to use to retain past and current customers:

1. Grow email and SMS lists

As we’ll dig into later on, email and SMS marketing are two of the most important strategies in any type of e-commerce marketing effort. Whether you’re going for customer acquisition or retention, growing an email and SMS contact list is the first step in communication with your customers. 

You can grow this list by collecting contact information:

  • During quizzes to guide people who are confused about which product is best for them
  • On website pop-ups 
  • During checkout
  • Through email campaigns or automation (to receive phone numbers)
  • On landing pages
  • Through forms embedded on the website

We'll provide more extensive strategies and examples in Chapter 2: Scaling Your Email and SMS Lists.

2. Zero- and first-party data

First- and zero-party data is Customer-First Data because it takes into account whether people want to engage with brands through explicit consent:

  • Zero-party data is information offered voluntarily, such as email or personal preferences.
  • First-party data is information observed, such as purchase history, email engagement, customer support, and demographics.

3. Advocacy and brand storytelling

When it comes to retention marketing, your brand story is just as important as any discount that you provide. Advocacy focuses on getting your current customers to talk about your product to friends, family, and their social media followers. You can capitalize on many things in marketing, including positive experiences. 

Advocacy tactics might include

  • For non-buyers on the edge, telling the story behind the brand can build trust and push people over the edge to buy for the first time
  • Purchase objections from first-time buyers who have many reservations about buying, such as shipping time, seeing a lack of reviews or bad reviews, researching competitors, or something more specific to a brand such as product features; part of your email/SMS and customer support strategies should be to overcome these objections after the person's first visit
  • Two-sided referral programs that grant a reward to the person making a referral that is tied to repeat purchase or continued use of the product
  • Referring to a friend, which endorses your brand and encourages existing customers to continue using your service with a coupon or discount
  • Social endorsements that encourage customers to openly make endorsements of your product to increase customer retention

4. Personalization

Personalization is a necessary ingredient in a great shopping experience. In fact, customers have come to expect personalization when they’re being marketed to. But personalization isn’t just about dropping in the customer’s name into the email or text message—it’s about knowing exactly where they are in the buyer’s journey.

For example, for someone who is visiting your website for the first time, you probably don’t want to inundate them with deals. They might not even know what your product is yet. Instead, your website needs to be interesting and informative. Leave the big deals for people who are ready for them, such as repeat customers. 

We'll provide more specific examples of personalization for each stage of the buyer’s journey in Chapter 3: Advanced Email Strategy.

AdobeStock_495010746 [Converted]5. Exceptional customer service 

Buyers don’t just come back for the product; they come back if they feel like the overall experience was a success. A part of this formula is exceptional customer service. From personalized confirmation texts or emails to immediate responses through chatbots, showing you’re available to customers whenever they need you contributes to whether or not they will return. It contributes to the initial conversion purchase as well.

6. Reactivate unengaged customers

Some customers will inevitably stop engaging with your brand, but that doesn’t mean you should simply let them go. 

To wrangle unengaged customers back in, you’ll need to identify the specific segment of customers that are about to leave or have left already. Additionally, you’ll need to figure out why they left in the first place. 

One of the most successful channels for reactivation is through an email campaign. Two things to keep in mind when sending these emails out:

  • Include specific dollar incentives: In fact, by including a specific dollar amount saved in the subject line, you can see better conversion than including the percent off. 
  • Send sooner rather than later: Reactivation campaigns are more effective if they’re sent soon after evidence of less activity. 

7. VIP and loyalty programs 

Exclusivity is a huge driver for retention. People want to feel special, and you can tap into that by creating a “club” or membership that offers exclusive deals and access to products before anyone else. 

Loyalty programs are also useful. Think about a sandwich or coffee shop that offers cards that can be punched with each purchase. The next time you want lunch or a boost, where do you think you’ll go? Loyalty programs are an easy way to keep your business at the top of your customers’ minds. 

8. Subscription programs

Subscription programs aren’t new, but they’re a tried-and-true way to keep customers around. One of the most well-known examples of a successful subscription program is Amazon Prime, which offers two-day shipping, unlimited streaming through Amazon Video, and many more benefits by purchasing a yearly subscription. 

In 2022, many brands are adding brand or community subscriptions for $5-$10 per month to give exclusive access to coupons, new products, online events, and closed communities.

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When Should Retention Marketing Strategies Be Used?

As you formulate a retention marketing plan, you’ll need to categorize your campaigns. After all, your customers are at different stages of the buying journey, and you need to meet them there.

Here’s where you’ll need to put your tactics into action: 

  • Onboarding campaigns: Here, you’ll welcome and nurture new customers and clients by delighting them with content, first-time buyer deals, and a newsletter. Consider this your first impression: It’s an important factor in keeping the customers coming back. 
  • Active customer campaigns: Don’t ignore first-time customers. If you can get them to come back a second time, they’ll likely buy again and again. Connect with them, educate them, and reward them for staying loyal to your brand. 
  • Lapsing customer campaigns: For those who appear to be on their way out of the buyer’s cycle, create an incentive for them to stay, such as discount coupons, free trial offers, and useful content. 
  • Reengagement campaigns: Lost customers are those who have taken a step further from lapsing customers and have opted out of communications or a paid subscription. Set up an email nurture campaign that provides incentives similar to those provided to lapsing customers. 

Which Metrics Should Be Measured?AdobeStock_291650679 [Converted]

Now that you have a list of potential campaigns, you’ll want to know how to measure success. In order to do so, let’s take a look at some of the metrics you’ll need to track to know what’s working and what needs to be changed:

  • Customer churn rate
  • Revenue churn rate
  • Repeat purchase rate
  • Return website visitor
  • Customer lifetime value
  • Net promoter score
  • Overall increase in conversion rate for first-time customers 

For more information on metrics, check out Chapter 5: Tracking ROI and Getting Results. 

What Are Retention Marketing Best Practices?

Finally, as you start to craft your customer retention strategies, keep the following best practices in mind.

Always track customer churn rate

But also make sure to do something about it! Although many people want to consider churn rate as a common part of doing business, it doesn’t mean that strategies shouldn’t be built in to decrease churn numbers. It’s not a statistic; it's a problem to solve. 

Collect customer data

Who are your customers? What is the problem they’re seeking to solve? You can answer these questions by building personas that are based on real customers. Collect information on who they are, how they act, and how and where they want to be communicated with. We’ll get more into how to collect contact information in the next section. 

Put customer data to use

Once you have your customer data, how will you put it to good use? Create a strategic marketing and retention marketing plan built on segmented lists, customer characteristics, and brand habits. 

Targeting can also help you use demographic and psychographic information that shows what type of content, offers, and messaging to send. This type of segmentation can engage the audience based on brand engagement and purchase history.

Provide excellent brand experience

It doesn’t matter what product you have, if a customer has a negative experience with your brand, they’ll move on to your competitor. Be sure you’re delivering on promises, personalizing the process, and putting enough resources and efforts into customer service. 

Focus on the right customers

Attracting the right customers starts at the acquisition stage. Most importantly, they need what you sell and align with your values. Make sure you attract the right customers by creating a detailed buyer persona that defines who you want in your purchase funnel. 

Keep up brand visibility

Where does your audience spend time? Which social platforms? Communicate with them there. Look for opportunities to serve as a guest blogger on a site that promotes your brand name in front of your target audience. Be sure to do plenty of SEO research to find out which keywords you should be targeting. 

Focus on early engagement

As soon as a customer makes a purchase, stay at the top of their mind by following up with a new customer automated email and a consistent presence through helpful information, such as email drip series, newsletters, and product announcements.

Create fun marketing content

How are you delighting your customers outside of your product? Getting customers to return to your brand should be done by providing customer loyalty programs, rewards and prizes, and plenty of content that is educational and fun.

Collect zero- and first-party data through surveys, quizzes, and preferences 

Be sure you’re hearing from your customers directly. Sending surveys is one of the best ways to understand how you can better serve and retain customers by prompting them to tell you what they like, want, and need. Also, be sure to ask them to share their experience with you so that you can improve processes, products, and services. 

Create preference pages

Customer lifetime value depends on the engagement of the customer. One way of ensuring that you’re engaging with your customers in the right way is by encouraging subscribers to update their preferences, even if they have not yet purchased. With updated preferences, customers are less likely to churn, more likely to purchase more frequently, and more likely to spend more per purchase. 

Build product quizzes

Product quizzes are one of the most fun and new ways to gather data from website visitors. Through a pop-up, ask visitors questions to discover why they are shopping with you today. You can ask a variety of questions related to their goals, relevant details that would help you recommend the best product for them, their phone number and email address, and more.

Chapter 2: Scaling Your Email and SMS Lists

Email and SMS messages are two of the most commonly used and effective channels to communicate with a customer base. Before you can do that, you need a contact collection strategy.

This isn’t just important for the sake of connecting with current customers. Ninety-five percent of site visitors bounce or don’t purchase, yet around 8-15 percent of them are likely to buy in the future. If a brand doesn’t optimize collecting emails and phone numbers, this is a massive missed opportunity.

Brands should collect new visitors’ information to later warm them up to the brand, overcome purchase objections, and drive purchases.

5 Strategies for Collecting Contact InformationAdobeStock_320492896 [Converted]

Before we jump into the strategies, let’s talk a bit about consent. To connect with a customer via email or SMS, you need to gain permission for the information to be used for marketing purposes:

  • With SMS, users need to physically check a box that provides consent.
  • With email, users need to opt-in, but marketers can also use external tools such as GetEmails which allow marketers to gather information from customers’ IP addresses.

When it comes to strategies for collecting data, marketers will refer to two different approaches: zero- and first-party data. We’ve already touched on these terms in the previous chapter, but here’s a bit more about each:

  • Zero-party data is data that a customer intentionally shares with a brand. This information is accurate and you don’t have to worry about concerns over how the data was collected. The one downside to this is that customers have come to expect that they will receive something of value, such as a coupon, in exchange for their information.
  • First-party data is data that a company collects from its own channels and sources, such as websites, SMS, email, and more. Although this data is unique because it belongs to your company, it requires a lot of time and effort to collect this information, and you need a good quantity for it to be valuable.

With that, let’s jump into contact collection strategies: 

1. Pop-ups on a website

Pop-ups are one of the most common modes of contact collection. Customers are often more comfortable providing their email address before their phone number, so lead with this prompt first. Plus, out of every strategy, email drives the most revenue

Once they enter their email address, you can follow up by asking for their phone number or providing an incentive, such as a discount code, for them to enter more information. Or to really incentivize them, provide VIP access or early access to new products. 

A pop-up is also a great opportunity for a quiz. Not only is it fun and interactive, but it also helps gather data on the buyer or potential buyer so that you can personalize your product recommendations and segment your SMS and email flows. 

2. During checkout

Checkout is another effective way to acquire information. Most of the time, this is required for the customer to receive confirmation of purchase. From there, you can store the contact information for later. As the customer goes through the checkout process, be sure to include a box that includes specific information that outlines compliance and consent to be marketed to. 

3. Email campaigns or automation

Email lists tend to be quite a bit bigger than SMS lists for the reason stated above: People are usually more comfortable providing their email address before their phone number. However, SMS messages have a 95 percent open rate, which makes it an important list to grow. 

That’s where email campaigns come in. You can prompt people on your email list to provide their phone numbers by offering:

  • Access to deals before anyone else
  • Deals or discount codes 
  • Content that’s only available through SMS messages

For new customer flows, you can encourage sign-ups through email automation. In these sequences, encourage the customer to sign up for SMS to get additional notifications concerning deliveries, coupons, or a VIP experience. 

4. Landing pages

Landing pages offer gated content that requires contact information to unlock the content. This way, you’re providing useful information to customers while bringing them into your marketing cycle. This not only contributes to list growth but also helps build the company brand. You can also include a form embedded on a product page that provides an incentive, such as a discount on an item on the product page, in exchange for their phone number. 

5. Promote through social channels 

Cross-promotion is an excellent way to get contact information. An easy way to do this is by using social media content across channels to promote email or SMS subscriber updates. Facebook pages are a particularly useful approach to this method. By using the Facebook Messenger bot connected to the Facebook page, you can send a call to action (CTA) that prompts an SMS contact. 

Chapter 3: Advanced Email Strategy

Simply put, email is king. For clients at SmartBug Media®, it drives 37 percent of total sales. We even have clients seeing over 60 percent of their sales from Klaviyo

The screenshot above shows a client with 72 percent revenue from Klaviyo. 

In this chapter, we dive into the expansive world of hyper-personalized customer journeys, from the first brand welcome to the prediction of second and third purchases to full loyalty.

19 Types of Automated Email Flows

Automated email flows, also known as email automation, involve the process of setting up an email campaign sent to subscribers based on a trigger or an elapsed period of time. Here are 19 common and advanced automated email flows

1. Welcome emails

As part of a series of onboarding emails, a welcome email is the first email communication the shopper receives. Usually, the communication is a subscription confirmation or a post-purchase email. 

2. Cart abandonment

Cart abandonment is incredibly common. Whether the shopper gets distracted or finds a better price, cart abandonment emails can look like reminders, incentives, cart expiration notifications, or promotions of similar products. 

3. Browse abandonment

Browse abandonment emails are automatically sent to an email subscriber who viewed products on your website but never placed the item in their shopping cart. This is a great opportunity to capitalize on shopper intent.

4. Purchase confirmation: New versus returning customerAdobeStock_509971062 [Converted]

The purchase confirmation email is sent by the e-commerce company as soon as the customer has completed the transaction. This serves as a receipt, detailing the transaction number, item, and expected delivery date. 

For new customers, this is a great opportunity to offer a certain amount off on the next purchase. For returning customers, you might offer a rewards program or provide points if they are already a part one. 

5. Cross-sell

A cross-sell email suggests other items from a product catalog based on the visitor’s browsing, cart, or past purchases. Cross-selling is usually time-based and can take place in a newsletter, a post-purchase email, or an abandoned cart email.

6. Subscription and churn flows

Depending on the product, some companies have subscriptions for customers to make repeat purchases. Marketers can send content that’s related to the product, such as instructions on how to use the product, to keep them engaged. 

Churn is when a customer ends their subscription. Marketers can create automated emails asking why they canceled or rerouting the customer to a customer service agent to keep them from churning.

7. Shipping confirmation

A shipping confirmation email simply notifies the customer that an order has been shipped and includes an estimated time of arrival. 

8. Replenishment series

A replenishment email reminds a customer to make the next purchase of a product that is likely running low or almost gone. Some subscription services let the customer know that a new product is on its way.

9. Back in stock

A back-in-stock email notifies a customer that a high-demand product is back in stock and is available for purchase again. 

10. Wish list sale

A wish list is a collection of products that a customer digitally saves, signifying interest in the product with an immediate intent to purchase. This is a great way to reduce shopping cart abandonment and sell to the customer at a later time. Notifying a customer of a wish list sale lets the customer know that the product can now be purchased at a lower price. 

11. Instructional flows

An instructional email educates a customer on how to use, clean, or assemble a recently purchased product, helping cut down on inquiries for customer services and reduce poor product adoption. 

12. Product review

Sending a positive product review about an item that the customer either browsed or abandoned while still in their cart is a great way to encourage a purchase. 

13. Birthday emails

Birthday emails are one of the most effective types of email to send. According to research from Experian, emails have a 481 percent higher transaction rate compared to promotional emails, plus they generate 342 percent more revenue and 179 percent higher click rates than promotional emails. 

14. Purchase anniversary

A purchase anniversary email reminds the customer of a purchase they made a year prior to the email. In this email, marketers will encourage a repurchase or purchase of a similar product.

15. Predictive purchase

A predictive purchase email borrows from principles of predictive marketing, which is a strategy that utilizes historical behavioral data to predict future behavior. This type of email usually provides a list of suggested products.

16. Custom-performing flows by product or category

Any flow with a high amount of traffic can reveal high-selling products. In order to capitalize on these products, marketers can make custom flows for the product, such as content that provides the benefits of its use, purchase objections, or tailored customer reviews. 

17. Custom flows for high-performing holidays or sales

The holidays are major selling points in the year for e-commerce customers. Knowing which items will be promoted during a specific holiday, these emails can be automated based on customized buying preferences, segmented customers, and tracking and rewarding top customers. 

We recommend that key automated flows be rebranded for big promotions. Imagine signing up for a newsletter on Christmas and getting a holiday-themed series. With this strategy, we see conversion rates double compared to generic flows.

The flows typically redesigned for big events are the welcome series, abandoned cart, browse abandonment, and new customer series. For established brands, building a second or even third purchase series with larger discounts or specials will encourage upsells during the event.

18. Marketing campaign flows 

A marketing campaign flow is a set of stages that a campaign leads a potential customer through. For example, a potential customer might click on an ad that targets specific pain points, which leads to a landing page and a prompt to sign up for email. From there, the person would be served content specifically tailored to their journey from an ad or marketing campaign. With this strategy, brands see much higher click and conversion rates.

19. Advanced integration flows

Advanced integration flows utilize a number of different strategies, including loyalty programs, customer support, forms and collecting data, physical mail, influencers, and more. 

For our SmartBug clients, we build custom flows for quizzes in order to:

  • Redirect people based on customer service responses
  • Gather influencer data and collaborations
  • Increase engagement with loyalty and reward programs
  • Send shipping and upsell emails
  • Help reduce returns and much more

SmartBug partners will benefit from many technology integrations that work well with Klaviyo, including Justuno, ReCharge, Gorgias, Okendo, Stamped.io, Octane AI, Wonderment, Gatsby, AfterShip, Zendesk, Jebbit, Clyde, LoyaltyLion, PostPilot, Glew, GetEmails, and many more.

6 Types of Email Campaigns to SendAdobeStock_495426044 [Converted]

The other type of email e-commerce marketers will send is created specifically for a larger event. Rather than being triggered by a certain behavior, these emails are sent out to subscribers to provide them with information about a new product, piece of content, or event. 

 

Here’s more on the six most common types of email campaigns:

1. Sales and promotions

Promoting a sale or certain product is one of the most common types of emails and is an excellent way to boost sales and generate leads. These emails can also look different depending on the time of year. For example, many businesses hold sales during the holiday season or during the Fourth of July. Sales are often temporary and create a sense of urgency to purchase.

2. Product announcements

A product announcement includes the name and image of the product, the launch date, and the primary benefits of the new product. One of the main strategies with this email is the sense of exclusivity it creates. Customers want to be “in the know” before anyone else, so encourage them to take advantage of the product before it’s made public.

3. Surveys

Data can provide a wealth of information about the success of your marketing strategy, product, and so many other things. By surveying your customers, you have a chance to ask how to improve, learn about what is and isn’t working, discover what products are missing from the inventory—the list goes on. Plus, this is a chance to interact with the customer, and these chances aren’t as frequent as in in-person stores. 

4. Content promotion 

Email campaigns can also promote content, such as blog posts and e-books, as well as your social media pages. With this campaign, you’re using your email list to drive traffic to other pages and boost your company’s domain authority on Google. This also provides another way for your audience to interact with your brand. 

Content can remain contained within the email rather than redirecting to another page. Keeping the customer on the email can drive clicks to products displayed within the copy. 

5. Lifestyle content

Rather than selling, the goal of a lifestyle campaign is to build excitement and drive interest, education, and entertainment. Although the main goal isn’t to sell, this type of campaign tends to drive sales and generate leads by inspiring followers. 

Email sequences usually look like blog posts but tend to be much shorter. The goal is to build trust between the brand and the customer and to develop the brand-customer relationship. Alternatively, the email campaign can link to a landing page, external content, or suggested products, as long as the products aren’t the focus. 

6. Live or online events

When promoting an event, you want to reach out to customers through channels that your audience is most likely to see. By sending them the information through email or SMS message, you can increase the numbers at an in-person event or live event that takes place on a video platform or social media page.

Chapter 4: Advanced SMS Strategy

Did you know that 95 percent of text messages are read and responded to within three minutes of being received? We live in a fast-paced world where most people carry their phones with them just about everywhere they go. So why not reach them there?

For e-commerce marketers, SMS is no longer an option—it’s a must-have. In fact, for every e-commerce brand, there is a subset of its audience that prefers SMS to other channels of communication. Not only that, but SMS can also be treated as “exclusive” to encourage sign-ups from VIPs, discount hunters, and consumers waiting for new releases. 

Although it’s much more difficult to obtain a phone number for marketing, once a brand does get the phone number and executes its marketing strategy well, this channel is guaranteed to perform.

Two Primary SMS Marketing StrategiesAdobeStock_518473241 [Converted] 4

When developing an SMS marketing strategy, there are two main pieces to include:

  • A campaign is a manually built strategy that sends text messages to a list at a specified time.
  • An automated message is behavior-based and triggered after a purchase, sign-up, or abandoned cart. 

SMS campaigns are a key strategy for driving additional sales. The campaign can take place before the holidays or promote a flash sale or new product launch. They also tend to reach a wider audience as opposed to a more segmented, personalized campaign. SMS campaigns are very similar to email campaigns; however, the messages are often shorter and redirect to a landing page. 

Automated text messages are a great way to nurture the customer after they have purchased an item. They can also reengage the customer after the customer has selected a product but decided against the purchase. 

9 Types of SMS Message Automated Flows 

You might recognize a few of these campaigns from the email campaign section. However, SMS differs from email in a number of ways. An SMS message is competing with apps, email, and any of the other features of a smartphone, so the message needs to capture attention, spark interest, and encourage a click—all within the 160-character limit of a single text message.

1. Abandoned cart

Working in tandem with the abandoned cart email, sending an SMS text message can serve as a last reminder before the cart expires. You never want to overburden the customer—or, worse, annoy them—so the content between the channels should vary. 

2. Browse abandonment

SMS browse abandonment messages are a great way to reengage shoppers with timely, personalized, and conversational messaging that encourages them to return to your website, either for the products they were browsing or for a similar product that might be better suited to their needs. Browse abandonment messages can offer financial incentives through a discount, showcase similar items, or ask questions that prompt the shopper to tell you more about what they’re looking for. 

3. Customer win-back

Inevitably, customers will drift away from some brands that they have bought from before. In order to win back a customer, a text message can provide a personalized discount offer on similar products that has a time limit to create a sense of urgency.

4. Post-purchase

This type of message is sent to a customer after a purchase. However, with the right content, these messages also serve a practical purpose by helping you build stronger relationships that contribute to an increase in customer loyalty.

5. New subscriber

It’s a big deal for a customer to provide their phone number and permission to use it. With this message, you can reward the customer by providing them with a discount.

6. Customer care

Customers desire access to customer service whenever and wherever they choose. Setting up a chatbot is a great way to automate this service. However, customers should always have the option of chatting with a live agent. 

7. Conversational flows

A conversational flow allows you to ask customers a series of questions and provide them with keywords to text back. From there, the answer triggers a sequence of automated replies and recommended products that align with their personal preferences. This is a great way to have an engaging conversation while collecting valuable insight that helps to further personalize their experience. 

8. Holiday flows

Whether it’s Black Friday, the December holidays, or Valentine’s Day, the holidays are some of the most important, profitable events for e-commerce companies. Let subscribers know about sales and how they can take advantage of those sales before anyone else does. 

9. Transactional

A transactional message is used by a business to relay transactional information, such as order status, delivery, notifications, and more. Automated shipping and delivery texts perform very well. They often perform better than email for upsells, reviews, and loyalty programs.

Chapter 5: Tracking ROI and Getting Results

Savvy marketers can only optimize their systems and customers' experiences if data is used to make intelligent decisions. 

In this chapter, we’ll go over the metrics that you should track in order to understand the success of your retention marketing and email and SMS marketing results. 

14 Retention Marketing Metrics to Track AdobeStock_423731206 [Converted]

Retaining customers is vital to the success of your company. Not only is it cheaper to cultivate loyalty than it is to acquire new customers, but loyal customers are also better for your bottom line. According to research reported by business.com, current customers spend 67 percent more on average than new customers. 

 

To understand the success of your retention marketing efforts, track the following metrics:

1. Customer churn rate

This metric tracks the rate at which a customer stops doing business with your company. You can measure the rate over various amounts of time, but the most useful is to measure it on an annual basis. This way you can know which times of the year provoke the most churn and strategize around that time. 

2. Customer retention rate

This metric is both the most straightforward and important metric to understand customer loyalty and repeat business generation. This metric, in addition to the metrics to follow this section, gives you a deep understanding of business performance. 

3. Revenue churn rate

This metric is the percentage of revenue lost as a result of existing customers churning. This can be useful to most e-commerce businesses but is most often measured by subscription-based businesses.

4. Existing customer revenue growth rate

This metric measures how much revenue is generated from customer success, retention, and loyalty efforts. The best way to make this rate climb is by upselling, cross-selling, and increasing purchase frequency. Typically, this metric is measured on a monthly basis. The monthly recurring revenue amount should come from existing customers only and exclude revenue generated by new customers. 

5. Net incremental revenue

Net incremental revenue measures the change in net revenue earned by the company following a promotional offer campaign. It also takes the cost associated with the offer into consideration. This metric ties marketing to larger business objectives and goals, especially increased revenue. This metric provides a clear picture of revenue minus expenses and helps executives understand marketing ROI.

6. Repeat purchase rate

This is the percentage of customers who have bought from your brand more than once. Repeat purchases allow you to see how many customers return to your business. 

7. Repeat purchase ratio

This metric is also known as the loyal customer rate and measures the percentage of customers who return to make purchases in a given period. Although it can be a strong indicator of customer loyalty, individual customer behaviors can skew the data. For example, some customers buy more during specific seasons while others make smaller purchases more frequently. To avoid data distortion, track purchasing frequency for every individual consumer and look at the overall rate of repeat purchases. 

8. Return website visitor

This metric measures the number of visitors returning to your website. You can also measure how often they visit and the pages where they bounce. Knowing this information can help you implement strategies to keep them on the page. 

9. Customer lifetime value

Customer lifetime value (CLTV) is the value given to your brand by a customer over the lifetime of business between you and the customer. This number can provide information on your retention marketing efforts and help you better understand what keeps customers around. 

10. Net Promoter Score

Your Net Promoter Score (NPS) can provide some insight into how likely a customer is to refer your business. This metric requires a survey that prompts the customer to rate recommendations on a scale from 1-10. 

11. Overall increase in conversion rate for first-time customers 

You want to know whether or not your email and SMS marketing efforts are working. The best way to do this is by tracking the conversion rate by utilizing software such as Klaviyo. This platform provides a dollar sign for each email and SMS sent to your customers. 

12. Daily, weekly, and monthly active users

When a customer begins to disengage from your brand and communications, this is usually a good predictor of churn. In order to keep users engaged with your website and content, utilize behavioral analytics that set activity benchmarks for your users. From there, monitor whether they meet them, and if they don’t, reengage with them through communication channels and incentives. 

13. Product return rate

Your product return rate is the percentage of the total units sold that have been returned. In the best-case scenario, your product return rate is as close to zero as possible. 

14. Loyal customer rate

Loyal customer rate refers to the number of customers who have made repeat purchases within a given period of time. Loyal customers are the most valuable to your business—not only do they make repeat purchases, but they are also most likely to drive referrals. 

Email Marketing Metrics to Track AdobeStock_305789923 [Converted]

There are many metrics that you can use to measure the success of your email efforts. However, due to some privacy protection policies, some metrics have become essentially obsolete. Namely, open rates and click-to-open rates are now unreliable.

Luckily, there are several other metrics that can provide good data to determine the performance of your email marketing campaigns. 

1. Sent

This metric tracks the total number of emails sent out by your email platform. Although you might send an email to a certain number of contacts, there’s a chance that the number might be lower. This is because some email addresses have bounced or the recipient has filed a spam complaint. 

2. Track received/delivered

This metric is the total number of people who successfully received your email. “Received” and “delivered” are often used interchangeably, but they mean the same thing. 

Your delivery rate is the number of emails sent divided by the number of emails received. 

3. Spam and spam rate

Spam is determined by the number of people who received an email and “reported as spam.” As soon as this happens, these people should be suppressed in order to avoid sending them any more emails. If you do, this can negatively affect your ability to get an email into legitimate users’ boxes.

Your spam rate is determined by the number of people who reported your email as spam divided by the number of people who received your email. 

4. Bounces

Bounces are the emails that were unable to be delivered due to technical issues, a non-existent address, or another issue. Bounces can be classified as:

  • Hard bounces which are permanent issues, such as closed email addresses; or
  • Soft bounces which are temporary issues, such as technical issues, that can be fixed 

Your bounce rate is the number of people who bounce divided by the total number of people who the email was sent to.

5. Clicks and click-through rate

Clicks on a CTA or a link in an email not only move the customer through the sales funnel but determine which link works best for your audience.

Your click-through rate is the total number of clicks divided by the total number of people who received an email. 

6. Conversion and conversion rate

A conversion is an action that you determine to be valuable. Depending on the goals and objectives of the email campaign, these conversions can vary. 

Your conversion rate is the percentage of people who converted divided by the number of people who received the email. 

7. Forward/share rate

This is the number of times a person clicks a forward or “share to social” button. The forward/share rate is the percentage of people who forwarded or shared your email divided by the number of people who received the email. 

8. Return on investment

Your return on investment is the amount of money all of your email automations or campaigns have made during a specific time period minus the amount of money spent to send the emails. 

9. Revenue per recipient 

This metric is determined by taking the total amount of money an email campaign, automation, or individual email has made divided by the number of people who received the email. 

10. Revenue per email 

This metric is determined by the amount of money an individual email automation or campaign has made. This metric can help you determine which emails resonate best with your audience. 

11. List growth rate 

List growth is how your email list grows or shrinks over time. As one of your most valuable assets, your list should grow over time so that you can engage contacts with personalized, segmented emails.

Your list growth rate is calculated by taking the total number of new subscribers minus the total number of people who unsubscribe, bounce, or file your email as spam divided by the total number of email addresses on your list. 

SMS Marketing Metrics to Track AdobeStock_518473241 [Converted]

Tracking SMS marketing metrics can help to inform your progress toward goals and objectives. In order to follow the success of your SMS marketing efforts, here are nine of the most common SMS metrics to track.

1. Sent

This metric measures the total number of times a message has been sent through automation or a campaign. 

2. Clicks

This metric represents the number of clicks on a link in a text message. Because text messages are quick, short forms of communication, it’s best practice to include only one link in a message. This also allows you to track the click.

To track your click rate, take the total number of clicks and divide it by the total number of text messages sent. 

3. Conversions

A conversion metric measures the total number of people who have completed the action that is valuable to your business, such as a sale, subscription, event sign-up, or any other action encouraged in the text message.

In order to find your conversion rate, take the total number of conversions divided by the total number of people who received the text message. 

4. Number of opt-ins

This is the number of people who provided consent to receive text messages through a sign-up form. 

5. Number of opt-outs

This is the number of people who took action to no longer receive text messages, usually through an unsubscribe link. 

6. Opt-in source

This is the source where you gather users’ consent to send them text messages. The usual sources include a checkout page, pop-up box on a website, paper form (usually at an in-person event), and more.

7. Resubscribers

Your resubscribers are those who opted out of a text messaging service but chose to opt back in.

8. Revenue generated

Revenue generated is the total amount of revenue that is made from people who have clicked on links in your text messages and then made a purchase. 

9. ROI

ROI is defined as the total amount of revenue generated by an SMS campaign divided by the total cost to send the text messages.

Conclusion

E-Commerce Marketing from SmartBug’s E-Commerce ExpertsAdobeStock_300095279 [Converted] copy

SmartBug’s full list growth, email, and SMS strategy has been battle-tested over the years and used time and time again to grow thousands of e-commerce businesses. 

In a partnership with us, you’ll gain strategies to capture information, build a loyal customer base, tell your brand story, and more.

Request a consultation to learn more about how SmartBug can implement an e-commerce marketing strategy that will impress and convert. 

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