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Retention marketing: How you can proactively improve retention

With 80% of future profits coming from 20% of existing customers, the importance of retention marketing is undeniable. By increasing the retention rate by just 5%, it's possible to increase the bottom line by up to 95%.

Successful retention is the key to business growth and financial stability, especially for SaaS companies. Retained customer profitability tends to increase over their lifecycle with the company. To keep customers coming back, working on a stellar experience is insufficient. It's vital to implement high-quality retention marketing strategies.

What is retention marketing?

Retention marketing is a strategy aimed at your existing customers. The goal of retention marketing tactics is to inspire your existing customers to continue doing business with your company.

Subscription businesses put a heavy emphasis on designing high-quality customer retention marketing campaigns since they promote business growth and reduce churn.

Focusing on retention marketing increases the customer lifetime value (LTV), which results in long-term profitability instead of short-term acquisition gains. While this type of marketing is hardly the only strategy your team should be using for promotion, it's an integral part of an efficient marketing campaign.

There is no SaaS success without retention marketing

Retention is the key to a subscription company's survival. No matter how many new customers you acquire, a poor approach to retaining them can result in substantial losses. Efficient retention marketing for a SaaS company can:

Enable high growth

With proper implementation of retention marketing strategies, you can make sure your existing clients continue doing business with your company. This, in turn, reduces the churn rate. For a SaaS company, holding on to subscribers is equal to stable revenue.

Raise LTV

A customer's LTV can grow exponentially when you keep them with the company for a long period. The longer they stay, the more likely they are to continue using your product for years.

That's why for a SaaS company, investing in retention is more profitable than investing in acquisition.

Minimize churn

As you start investing time and money in customer retention marketing, you'll notice a gradual decrease in churn rates.

Top-notch retention marketing tactics keep customers interested in long-term collaboration, thus minimizing their desire to leave.

Lower CAC

When you keep as many customers as possible, your CAC (Customer Acquisition Cost) goes down. You simply don't have to worry about generating thousands of leads to convert several customers that may not stay with your product.

If the majority of converted prospects continue working with your company for years, you don't need to invest in maximizing your lead generation strategies aimed at decreasing the churn rate.

Increase brand awareness

Loyal customers tend to become your brand ambassadors. By working on retention, you are investing in word-of-the-mouth marketing, which is powerful.

The power of retention: an example

The power of retention for SaaS companies is hard to underestimate. The difference between a one-month user and a three-year subscriber is tremendous. The LTV grows exponentially with each year you retain a customer. Retention marketing strategies have an impressive ROI.

Many companies underestimate the power of retention and focus on acquisition instead. They struggle with churn rates and try to decrease them by investing more money in the acquisition. This vicious cycle can only be broken by a smart approach to retention.

Let's look at the numbers:

Let's say a company has 100,000 customers at the beginning of the year. Here are their numbers per month:

  • Churn rate: 2%
  • Retention Rate: 98%
  • Acquisition Rate: 1%

With the above numbers, by the end of the year, you'd have 88,424 customers. A net loss of over 11,000 or 11% of your customer base.

If you kept retention at 100%, the number of customers at the end of the year would be 112,683. That's an impressive 12.6% gain.

Retention marketing won't work without a value-based product

The key to successful retention marketing is a value-based product. There must be a reason for customers to continue subscribing to your services. As soon as they understand the value of staying with the company, your retention rates will naturally increase.

Your product should enable customers to be successful in whatever they are trying to accomplish. You need to show the value of using your product for many years to come.

Popular mediums for retention marketing

Mediums for retention marketing are similar to what you are using for your acquisition marketing efforts. While some may be more efficient than others, it's the quality of content that keeps the existing customers interested in your message.

  • On-page — you can create banners on the pages most frequented by your existing customers.
  • Email — Email is one of the most popular retention marketing mediums. You can send out personalized offers and reminders to show customers the value of staying on board.
  • Content — creating educational and entertaining content for your existing customers can reinforce their desire to keep their subscriptions.
  • Social media — by interacting with existing customers on social media, you can keep reminding them about the value of your product.
  • Retargeting — you can use paid search ads to retarget customers, who unsubscribed or didn't stay past the free trial period.

While designing your customer retention marketing strategy, take full advantage of all available mediums.

9 time-tested customer retention marketing strategies that drive loyalty

Whether you already have some retention marketing strategies in place or just starting out, you can take advantage of these time-tested methods.

1. Use referral programs

Turn your existing customers into brand ambassadors. By implementing a referral program, you don't just generate leads, you increase your existing customers' satisfaction.

Your customers will be honest with their friends and associates, hence a referral program is your customer telling their friends and associates “I trust this business and I will continue to use them, I think you should too.” This creates two main benefits:

  1. New customers
  2. More confident current customers

2. Invest in customer success

If you want the customer to continue using your product, it should enable their success. Besides increasing the value of the product itself, consider implementing a customer success program.

Offer your subscribers the necessary documentation, high-quality support, access to a knowledge base, and the like to help them use your product in the most beneficial way possible.

3. Ask for opinions regularly

The easiest way to find out what your customers are happy or unhappy about, is by asking. Arrange regular surveys (questionnaires, feedback opportunities) to find out what works and what doesn't, so you can adjust your offer to suit your customers better. You can also use this feedback to create data-driven blogs and educational materials.

Besides gaining valuable information, you'll show how much you care for your customers' opinions, thus increasing their loyalty.

4. Share customer success stories

Your customers want to see how others achieve success through your software. Sharing success stories shows that it's possible to gain value by using your product. Meanwhile, making these stories public increases the loyalty of customers whose success you share.

5. Improve the onboard process

Retention starts during onboarding. By educating customers about your brand and helping them start using your product quickly, it allows you to make the first impression that can last a lifetime.

Consider creating short interactive tutorials to simplify onboarding. They can use customer success programs to learn about the rest of the features later.

6. Focus on customer service

More than 70% of customers continue working with the company because they like customer service reps. Provide multiple support channels to ensure full customer satisfaction. Keep in mind that eight out of 10 customers are willing to pay for stellar customer service.

Likewise, take care of your customer support team. With the nature of their job, they meet flustered customers on a daily basis. This can take a toll on their physical and mental health. Check on them constantly and express your appreciation whenever possible.

7. Keep customers informed

Make sure to keep customers informed about new features, policy changes, upcoming offers, new partnerships, important company milestones, and more. This can help them feel as if they are a part of the family.

8. Upsell

Besides increasing your profits, timely upselling deepen your relationship with existing customers, raises the value a customer receives, and increases the LTV. Upselling isn't just a way to make money, it's often integral to customer satisfaction and loyalty.

9. Offer freebies

Free features, free training, free customer support options. Whatever free offers you can come up with work for keeping customers with the company. Try to make these offers targeted and personalized for each subscriber.

7 best practices of retention marketing

While working out your customer retention marketing strategies, keep these best practices in mind. They can help build customer loyalty while increasing the company's profitability.

  1. Personalize when you can — personalization makes customers feel special and cared for while enabling their success with your product.
  2. Know your retention rate — if you don't know it yet, calculate your retention rate. It can help you track your retention marketing progress.
  3. Be available for help — use all available customer service channels like chatbots, social media, email, FAQ sections, knowledge base, etc. Customers should know how and where to find you when needed, preferably 24/7.
  4. Build a community — a community (blog, social media) can help you collect valuable feedback and show customers that they are being heard.
  5. Educate your customers — provide existing customers with educational materials about your brand and the product to position yourself as the industry leader.
  6. Communicate frequently — make sure to communicate regularly so customers don't feel abandoned. You don't need to keep making offers. Follow-ups, thank you's, surveys, season's greetings, and the like work just as well.
  7. Measure LTV — by measuring a customer's LTV, you can figure out how much profit they bring to your company, thus demonstrating the ROI of retention marketing.

Aim your customer retention marketing tactics at showing customers how valuable you are to them. But don't forget to demonstrate how valuable they are to your company as well.

Retain customers automatically, 100% ROI guarantee

Customer retention marketing is a set of complex tactics. With ProfitWell Retain, you can retain customers automatically to increase the company's profitability and gain endless opportunities for growth and scaling.

Top-notch retention software can automate your retention marketing efforts, reduce churn, and raise customer satisfaction rates.


High-quality retention marketing is the key to a SaaS company's success. The ability to retain paying subscribers for many years allows the company to reduce marketing costs while increasing profits.

Customer retention marketing has an impressive ROI. By implementing top-notch retention marketing strategies, you can improve the company's bottom line.

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