While the standard subscribe-and-save model may not suit every business, one successful retention strategy is actually built on the subscription business model, i.e. selling your products or services on a recurring basis. At the end of the day, your goal is to generate repeat customers who continually come back to your business for their needs, and what better way to do that than to make your business subscription-first?
Nowadays most DTC brands understand this, and as a result, we are seeing more and more brands make three common tactics standard components of their customer retention strategy.
Key takeaways
- Customer retention is all about keeping customers satisfied & engaged.
- Think about innovative ways to iterate on existing tried-and-true strategies.
What is customer retention anyway?
Customer retention is a metric that businesses use to measure their ability to keep their customers shopping with them. There are countless benefits to driving repeat business for brands, such as offsetting customer acquisition costs (which are continuously rising) and generating higher customer satisfaction.
Customer retention strategies and examples
For this blog, we examine Dae Hair, a haircare brand boasting almost 200,000 followers on Instagram, 80,0000 followers on TikTok, and products on the shelves of multinational beauty retailer Sephora.
Since launching in 2020, Dae Hair has already cultivated a devoted cult following, thanks in part to their use of three surefire customer retention tactics:
- Surprise-and-delight
- Personalized loyalty programs
- Customer community engagement
Surprise and delight your existing customers
Surprise-and-delight tactics in customer retention involve unexpectedly delighting customers through personalized gestures, experiences, or gifts. By adding moments of delight into the customer journey, businesses can enhance satisfaction, loyalty, and advocacy, ultimately driving long-term retention and revenue growth.
Personalized gifts tailored to individual preferences, handwritten notes expressing genuine appreciation, or exclusive experiences like VIP access to events can leave a lasting impact on customers. Dae Hair did just this when they invited local customers to try out a product that hadn’t even launched yet, giving them exclusive access and facetime on their social media.
Of course, to effectively integrate surprise and delight tactics into existing customer touchpoints, businesses should adopt a strategic approach. This involves:
- Analyzing customer data to identify opportune moments for surprise, such as birthdays or milestone anniversaries, and personalizing gestures accordingly. For example, for Dae’s campaign, understanding their local customer demographic was crucial in sending out invitations to the right members of their customer base.
- Leveraging automation and technology to streamline the delivery of surprise and delight, ensuring consistency and scalability across touchpoints.
Incorporating surprise and delight tactics into customer retention strategies not only enhances the overall customer experience but also strengthens the emotional connection between customers and brands.
This is one tactic that can be implemented as part of a larger loyalty program, which we’ll go into next.
Reward your loyal customers with personalized loyalty programs
Personalized loyalty programs are tailored schemes designed to reward customers based on their unique preferences, behaviors, and purchasing patterns. By offering personalized incentives, businesses foster deeper connections with their clientele, resulting in increased customer satisfaction, loyalty, and lifetime value.
Successful customer retention strategies are built on the effective use of customer data. By leveraging advanced analytics tools and techniques, businesses can glean valuable insights into customer preferences and behaviors, enabling them to personalize offers with precision and relevance.
Dae Hair’s reward program incentivizes customers to take certain actions to generate points that could then be exchanged for perks like discounts and new products:
This is strategic in encouraging loyalty to the brand (making repeat purchases, increasing exposure to their brand via other channels like social media) and in creating more touchpoints to collect data around loyal customers (taking a survey, the number of purchases they make, etc.)
Furthermore, they make it clear that the perks only get better the more that they spend and engage with the brand by leveraging different tiers of loyalty:
Create an engaging customer community
The customer retention strategies we’ve discussed so far are all components of this final one: creating an engaging customer community.
These communities transcend transactions, serving as hubs where customers can engage, share experiences, and build relationships with both the brand and fellow consumers. By cultivating a sense of belonging and camaraderie, businesses can elevate customer retention to new heights, transforming one-time buyers into loyal advocates.
As you might expect, building a thriving customer community also requires a deliberate and strategic approach. Businesses can leverage various channels, including online forums, social media groups, and exclusive events, to facilitate interaction and foster a sense of belonging among customers.
By creating spaces where customers can connect, share insights, and feel valued, brands can cultivate a loyal following that transcends mere transactions.
Plus, actively listening to community feedback and incorporating user-generated content can further enhance engagement and deepen the sense of community ownership. Through these strategies, businesses can lay the foundation for enduring customer relationships built on trust, loyalty, and shared values.
The added value of customer community: user-generated content
User-generated content (UGC) plays a pivotal role in fostering community engagement and amplifying brand advocacy. By encouraging customers to share their experiences, opinions, and creative expressions, businesses can create a sense of authenticity that resonates with fellow consumers.
Whether in the form of testimonials, reviews, or user-generated media, UGC serves as a powerful tool for showcasing the real-world impact of products and services, building social proof, and inspiring trust among potential customers. By incorporating UGC into community spaces and marketing initiatives, brands can amplify their reach, deepen customer relationships, and solidify their position as trusted industry leaders.
Dae Hair has creative UGC campaigns down to a T. One example of this is in their spring campaign, where they launched a 13-day creative challenge to encourage customers to take part in nature and share on their social media. While this campaign doesn’t necessarily target the products they sell, it has the potential to increase brand reach because of a reduced barrier to entry (customers don’t even need Dae products to participate), making it even easier for customers to share.
It also caters well to customers who began as fans of the brand’s co-founder Amber Fillerup Clark, whose own personal brand embodies the creative challenge and overall aesthetic of Dae Hair.
Elevating the shopper journey to increase customer retention
Customer retention emerges as a vital driver of sustainable growth and profitability in today’s market. These innovative approaches not only enhance customer satisfaction and loyalty but also cultivate lasting connections between customers and brands. Dae Hair has done exactly what our 2023 Year in Review reported beauty and wellness brands are doing best: riding the momentum of the routine economy.
