It’s almost that time of year again – the holiday season.
While Mariah Carey is defrosting, it’s the perfect time for direct-to-consumer and eCommerce businesses to get a jump on holiday marketing campaign planning.
Here’s a staggering number to light a fire under your chair: On Black Friday 2023, eCommerce sales alone generated a whopping $9.8 billion according to Adobe Analytics.
But here’s the thing – while those numbers are impressive, customer loyalty is the real prize. It’s the backbone of your business. It’s the gift that keeps on giving.
In fact, keeping current customers happy is cheaper than trying to woo new ones. So why not focus on making your existing fan base feel like VIPs this holiday season?
This blog details why customer retention is at the heart of your holiday campaigns and ideas on how to execute campaigns that build customer retention. Let’s go!
What is Customer Retention?
Before we jump into strategy ideas, let’s do a quick refresher on the definition of a customer retention metric. Customer retention is a company’s ability to retain customers over time.
What does a high retention rate mean? It indicates your ability to keep customers happy and coming back. It’s a key indicator of customer satisfaction, product value, and overall business health.
Remember that business 101 tells us that retaining existing customers is generally cheaper than acquiring new ones, making it crucial for most businesses’ sustainable growth.
Customer retention rate is calculated using the following formula:
Customer Retention Rate = ((E-N)/S) x 100
To measure customer retention, you need to continuously monitor these metrics over time and prioritize customer retention as a core goal.
Where:
E = Number of customers at end of period
N = Number of new customers acquired during period
S = Number of customers at start of period
Let’s use the formula in an example for an online sock company. At the start of the holiday season, you had 800 customers (S). By the end of the holiday shopping season, you have 1,000 customers (E), and you acquired 300 new customers during this period (N).
Inputting these values into the formula looks like:
Customer Retention Rate = ((1000 – 300) / 800) x 100
= (700 / 800) x 100
= 0.875 x 100
= 87.5%
This final number means you retained roughly 88% of your original customers through the holiday season. Impressive! Even with a high number of retained customers, there’s always room to improve. That’s where the retention strategies we will detail in this blog come into play.
Why Customer Retention Matters During the Holiday Season
The holiday season – what we typically think of as Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Giving Tuesday, Hanukkah, Christmas Day, etc. – provides a strategic opportunity to focus on customer retention.
For both small businesses and large eCommerce or DTC companies alike, it’s a lucrative time to turn satisfied customers into loyal customers that can fuel your business growth the following year.
When the panic of holiday gift-buying sets in, and demand is high, consumers want to turn to brands they trust. That’s where you come in. By focusing on customer satisfaction, loyalty, and aligning with customer expectations now, you’re setting yourself up for a profitable holiday season in the coming months.
7 Strategies to Build Customer Retention in Your Holiday Campaigns
Ready to spread some customer retention cheer? Let’s dive into seven strategies that will have customers coming back to your business year after year.
1. Create ultra-personalized experiences
Who doesn’t love to feel special? Personalizing your marketing campaigns with customer data is a simple way to make new or returning customers feel seen and appreciated.
Tapping into first-party data, the information you collect directly from your audience through your interactions with them, creates ultra-personalized experiences. Let’s look at an example of how to use this kind of data.
Example:
Create an email using customer purchase history to send a personalized message with exclusive holiday offers. It’s like saying, “Hey, we know you love our pots and pans, so here’s a special holiday discount to use on your next purchase!”
Tailoring your holiday campaigns is a surefire way to boost customer satisfaction and retention.
2. Launch a customer retention program
Remember, customer retention isn’t just about the holiday season. Your goal is to build long-term loyalty.
With that in mind, it’s important to treat your loyal customers like the royalty they are with a customer retention program.
Example:
Entice repeat purchases with exclusive offers, discounts, or loyalty rewards in your sales and marketing campaigns. That might be early access to holiday sales, like this example from Carved, or BOGO deals on popular items. Whatever that strategy, ensure that being a repeat customer has its perks.
3. Provide award-winning customer service
A poor customer service experience could be a dealbreaker for already stressed holiday shoppers. Make sure it’s easy for customers to find and contact your support team, chatbot, or access the knowledge base or FAQs, and prepare to resolve customer support queries quickly before the holiday season rush begins.
Customers will remember when you provide a wow experience and turn a potentially negative interaction into a positive one.
Ready your team for all scenarios and have resolution processes in place to increase customer loyalty and your chances at customer retention.
Example:
Take a page out of Ritual’s book. The vitamin company is known for their health products and excellent customer service. After a misplaced delivery, they quickly responded, expedited a replacement order, and corrected the problem for future deliveries, no questions asked. That’s how you win repeat business!
4. Engage with your social media audience
Social media marketing is a wonderful opportunity to showcase your company’s personality and keep them engaged with interactive holiday season content.
Spread festive and relevant content on the social media platforms your shoppers use most to cultivate loyalty.
Example:
Encouraging customers to engage with a “12 Days of Christmas” giveaway or offer gift ideas and ask them to participate in the comments section, like this holiday campaign from Ulta Beauty.
5. Collect and implement customer feedback
The holiday season is a great time to do a wellness check with your customer base. Ask about what they love, what they don’t, and what could be better, and then use that feedback to improve your customer experience and retention strategies.
Make it easy for them to submit feedback either in-person, through online forms on your website or linked within emails, or encourage it on social media. Show your customers that their opinion matters by making visible changes based on their input.
6. Cultivate community with holiday cheer
Give your customers the warm and fuzzies by engaging with them in community-based activities that create memorable, customer-retention-inducing experiences.
This could be anything from in-store events to online experiences, like:
- Partnering with a local charity for a giving-back initiative
- Creating a hashtag that encourages user-generated content
- Holding in-store product demonstrations
- Or hosting a virtual Santa visit for your customer’s kids.
7. Prepare a post-holiday follow-up campaign
Don’t let all your hard relationship building go to waste after the holiday lights come down. Craft a thoughtful follow-up strategy to keep customers engaged year-round.
Segment audiences based on behavioral touch points to send the right email for the right action, personalizing your outreach to encourage retention. Here are a few example audiences.
- For purchases, thank them for their business during the holiday season and ask how they’re enjoying their purchases.
- For first-time customers, welcome them to your business and offer a complementary guide that tells them how to get the most of their purchase.
- For repeat customers, thank them for their continued loyalty and ask if they have any feedback.
- For cart abandoners, send them a reminder to complete the purchase with complementary item suggestions.
The possibilities are endless, but sending post-purchase emails helps keep your business top-of-mind and refine strategies for next year.
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Measuring Customer Retention Success
So you’ve got these great ideas and the creative team to make it happen, but how do you know if it’s actually working and retaining customers? Fair question. To understand the impact of your holiday marketing campaigns, it is crucial to measure customer retention success.
Keep an eye on customer retention metrics like repeat customer rates, sales performance, time between purchases, and Customer Satisfaction Score. Ask yourself questions like,
- Do you see an increase in repeat purchases?
- Are your loyal customers spending more this holiday season compared to last?
- How long does it take between the first and second purchase?
- How happy are my customers with my product, service, or overall experience?
Remember, customer retention efforts don’t end after the holidays. By laying the groundwork now, you’re setting yourself up for success throughout the year.
Conclusion
So what’s the main takeaway? Start planning your holiday campaigns now (if not earlier) to keep customer retention at the forefront of your efforts.
By using these strategies, you will make your customers feel special, set your business up for financial success post-holidays and beyond, and most importantly, build long-term customer loyalty.
And if digital advertising is a key component of your holiday marketing campaigns, try using a demand-side platform to automate your ad purchasing process, streamline operations into one system, and stretch your budget with wholesale media rates using Untitled.
Try it for free before the holiday season.
