This is Chapter 3 in a blog series. If you're new to the series, please read the first part and second part, before you proceed to read this.
In our last article, we discussed the importance of focused and differentiated strategy and how to use them. We also discussed three marketing tactics that would give a firm an edge over the others. We will now delve deeper and try to understand and implement those tactics by some real-life examples.
1. Retention Marketing
Retention of current customers is just as critical for companies struggling to achieve growth as bringing new customers into the door. The good news is that marketing campaigns for customer loyalty are often less costly than new customer acquisition programs. According to a Bain & Company report, the rise in customer retention rates by just 5% increases profits by 25% to 95%. Moreover, according to an eConsultancy study, 82% of companies believe that retention is more natural to conduct than acquisition.
Now, how to retain customers and gain maximum from them? The key is to keep them satisfied, and hence increasing their lifetime value. A company can achieve this by offering its customers an experience that is individually tailored. Providing tailor-made offers and promotions elevates the entire shopping experience of a consumer, which increases the brand's goodwill. The longer you can retain customer engagement, the more data you can generate, which translates into more useful campaign insights. Simply put, the longer you can keep clients, the easier it is for you to understand them and provide them with service. This will foster long-term brand loyalty. Earlier, the cost has been the biggest hurdle in the adoption of new technologies which would help the firms by doing an in-depth analysis of customer behaviors. Only powerhouses like Amazon used to be able to afford to support an in-house data scientist unit, but this is no longer the case. Retention Marketing's growing awareness has led to third-party vendors providing the data analysis needed to drive a personalized and a more customer-centered approach.
One way to get customers back to your company is by getting them to fall in love with your brand. It leads to a more profound sense of loyalty when consumers feel a connection with your brand, vision, and purpose. Share the brand story honestly and express your beliefs clearly so that consumers can get to know you and trust you.
Case: One real-life example is the Starbucks Rewards program, which rewards.
customers with stars (points) that they can then use to get Starbucks beverages, food,
and other items. Loyalty programs are so popular that most consumers are familiar
with the system and are enrolled in it very quickly if they choose. Because they are so
popular, however, consumers are also flooded with a loyalty program, so the most
engaging has a higher success ratio.
2. Co-Op Campaign
A Co-Op Campaign is an exclusive, joint promotional campaign supporting mutual marketing objectives. Brands will make a bigger splash than they would alone as they pool their dollars by co-marketing. Partnerships with other brands often support marketers through high-quality ads to show the importance of their region. The use of co-op ads reduces not only the cost of your newspapers but also your ad creation and creative costs. An example of cooperative advertising is the ads funded by shopping districts or centres in the shopping centre from each retailer. Such ads are often used for back-to-school sales in local newspapers, Diwali, Eid, Christmas, Mother's Day, Father's Day, etc.
Let’s understand it through a small case : For small businesses, who want to build a circular for an upcoming event — say Diwali. There will be many other such businesses that are all based in the same cities, in the same shopping plaza. Now, to create and print big advertisements none of these companies might have much cash on hand. But all of them can benefit from cooperative ads in this situation. They can together pool their resources and share the cost of a big campaign.
Some real-life examples -
Case 1: Between the cosmetics company Bonne Belle and Dr Pepper, the longest collaboration of this kind started in 1975. Bonne Belle successfully formed a partnership to produce Dr Pepper flavoured lip balm after the launch of the flavoured lip balm line Lip Smacker in 1973. This lip balm flavour still exists and is thriving today.
Case 2: You might have heard of Casper - it's an online mattress and bedding company that sells mattresses in a box. Casper mattress unboxing videos have become a hit on YouTube. However, given the 100-day return policy of the company, some shoppers may still hesitate to purchase a mattress without first getting the chance to roll it around. Enter a high-end furniture company called West Elm. Casper and West Elm collaborated so shoppers could try the luxurious mattress before buying — and so West Elm would be able to advertise their chic bedroom furniture. This is an example of a co-branding relationship that is mutually beneficial. This helped both brands reach a wider group of shoppers— after all, Casper is not selling furniture, and West Elm is not selling mattresses. It also offers options for shoppers— to try a mattress before they buy, or to imagine what it would be like to sleep in a bed frame.