Do you think that existing customers don’t help to generate more profits than new customers acquired by paid ads? Hold onto that thought and let’s see if your answer changes at the end of this blog.
Paid ads have become the mainstream of attracting new customers since last year and it is expected that more than $630 billion will be spent by 2024.
What does this mean? It means that digital ad space will become more competitive than ever, making it difficult to acquire new customers.
While close to 75% of executives believe acquiring new customers is more important than keeping customers around longer, given what’s going to happen in the digital ad space, it’s time to shift your focus on retention campaigns.
What are retention campaigns?
Retention campaigns are targeted towards your existing customers and their primary objective is to keep your customers engaged.
Why is it recommended to run retention campaigns?
Companies are suggested to keep engaging with their existing customers because retention campaigns will:
- Save a company’s money. It’s 5 to 25 times cheaper to retain and engage existing customers.
- Bring a company new customers Once your existing customers become loyal brand advocates, they can refer your company to new customers.
- Help to generate more profit. 92% of consumers trust recommendations from friends, colleagues, and family members that they end up spending 13.2% more on their purchases.
How to engage your existing customers?
Sky’s the limit. There is so much a company can do to engage customers but here are two examples for you to take away with.
- Give rewards for reviews and referrals:
Who doesn’t like to be rewarded for writing reviews and referring new customers? People become incentivized if they are given discounts, freebies, or points.
- Use a gamification approach:
Everybody loves to play games. Get your customers to be active within emails by implementing easy-to-play games with rewards like a free ticket to an upcoming conference or free shipping on their next purchase.
So, what do you think of the answer you initially had to the question above? Did it change? This blog isn’t saying that companies should stop spending money on paid ads, but rather show the importance of striking a good balance between paid ads and retention campaigns to achieve your company’s goal.
At Magnolia, we understand the challenges of engaging your existing customers now that we are all connected digitally and there is a lot of competition in any market. If you would like to chat about retention campaigns, we are here to help. Please reach out to us today.
By Emily Kato, Digital Marketing Associate at Magnolia Communications – a B2B demand generation full-service marketing agency headquartered in Vancouver, BC. We focus on engaging, nurturing and converting leads with PR programs, paid social ads, email marketing, and marketing technology implementation.