WatchBorn Global features stories from entrepreneurs around the globe   New episodes out now

8 tips on how to build customer retention email strategy [+ examples]

Learn how to leverage email marketing as part of your customer retention strategy in this step-by-step guide.

Customer retention rate is one of the most vital aspects of running a SaaS business. If you have a great customer acquisition program in place but are losing the old customers as fast as you are bringing in the new, you're never going to grow. Done incorrectly, email messages to customers can be annoying and serve the opposite of their intended goal. But when an email marketing strategy is done correctly, email is still one of the most efficient ways to communicate with customers and fuel company growth. This includes an email campaign to help with retention programs, so those new acquisitions will actually result in repeat purchases and growth. Let's look at what is retention marketing, what is the role of a retention email, and how a retention email strategy is set up and rolled out.

What is a retention email?

Customer retention is driven by customer satisfaction and customer engagement. A retention email is any email sent to an existing customer for the purpose of keeping them around as loyal customers. As the most common form of email marketing today, retention emails come in all different forms. The commonality though, is that they are designed to increase customer satisfaction with your product or to engage them more thoroughly with the product. Additionally, they're meant to improve customer experience, reduce customer effort, and deliver exceptional customer service. Later, we'll examine some of the forms this can take.

Here's why email marketing is an underrated retention strategy

Whether it's for acquisition or retention, email requires a certain amount of know-how to get right. A lot of businesses will approach their customer email retention strategy blindly, and as a result, they don't get the results they want. But the reality is that email can be a powerful retention tool for businesses that take the time to use it correctly. 


Customers cost more to acquire than retain

Research has shown that it takes up to five times as much money to acquire a new customer as it does to retain an existing one. Without a solid retention plan of some sort in place, you'll be throwing money away trying to replace customers that could have more affordably been retained. And of the customer retention strategies available to you, the retention email strategy is one of the more cost-effective. In fact, it has an ROI of $42 for every dollar spent. It can even be automated for a retention strategy that is not only cheap but hassle-free and effective.


Open and click-through rates can be higher

A sound retention email strategy will make heavy use of triggered emails. These are automated emails that go out in response to a user's action (or lack of action). According to a 2012 study, these reminder emails are 95% more likely to be opened than mass sent emails. In addition, triggered emails have twice the click-through rate of mass emails. Combine that with the fact that 40% of users enjoy getting email from favorite brands, and you have a fantastic opportunity to build a relationship with current customers through triggered emails.


Email allows for personalization

This is a big one. There are lots of ways to advertise now that will put your message in front of customers. You can even target those ads to your existing customers. But in order to customize your message to a specific customer, you need a more precise delivery method. Email is fantastic for this. Customers churn for all kinds of reasons, and being able to target your retention efforts to the specific threat of churn allows email to behave with surgical precision.

Furthermore, you don't want to come across like a robot. People want to be treated like human beings. Personalized emails also stand out more and are also more likely to be opened and clicked on. 


8 tips to build a customer retention email strategy that engages customers

So we've established that email can be a great tool for retention, but that it needs to be done right. Well, what does it mean to do it right? How can you be sure that your email retention strategy is a winning one? Truthfully, until you try it and refine it, you can't. But you can follow some tips that will help get you started on the right foot so the refining process goes quicker and you see results faster. 


1. Identify customers who are in limbo

A customer who isn't getting value from your product is likely to churn. This could be a paying customer who hasn't logged in for a while, or a user who hasn't made the switch to paid because they haven't engaged with your product. Whatever the reason, the user isn't benefiting from your product, so you need to send a personalized customer retention email and help them understand the value. You should already have welcoming emails and onboarding emails that help new customers learn to use your product, but if someone isn't engaging, it can be helpful to reach out to them individually with an offer to help them overcome problems.


2. Communicate product value clearly

Anytime you communicate with your customers, but especially when you communicate with one that's in limbo, you make sure to clearly convey what makes your product valuable. Let the customer know which pain points you can help them solve, what sets you apart from the competition, and most importantly, where they can find resources to help them unlock the potential of your product and get the most value from it. Always remind them of the value they're getting from your product.

3. Leverage what's working for existing customers

Your happy customers are the best referrals and source to learn what makes your product valuable. As you get feedback from users, which you should be doing regularly, pay attention to the features of your software and aspects of your business that they praise the most. This will give you a starting point for your messaging with customers who are in danger of churning. 

4. Keep a consistent cadence

The cadence of your retention email strategy isn't just about how frequently that you send out emails and follow-ups. Frequency can be part of it, but cadence also refers to why you send out emails, what types of emails, and what triggers them. Whether its regular onboarding emails designed to get the user up to speed, cart abandonment emails, or emails to reach out when they've been inactive for a while, your customers should have some idea when to expect an email from you. 


5. Get your subject line right

Your email can't aid in retention if your customer doesn't open it. Subject lines play a large role in whether an email gets opened or gets immediately deleted. Keep subject lines short. Always clearly communicate what your message will be about in the subject, and if possible, sell your product's value then as well. But never be too verbose in your subject. The subject line should be easily digestible as well as engaging. 

6. Build feedback loops

Earlier, we told you to use the positive feedback from your happy customers to guide your messaging to customers at risk of churning. Building in feedback loops is vital to understanding what makes your product valuable, but also to understanding why people churn. You should be regularly asking all customers from your email list for feedback, but those who churn can provide the most valuable feedback because they'll tell you which areas of your product or service need attention and improvement.


7. Test & iterate

Now comes the testing and refining part we talked about earlier. It's important to test and iterate, and it's part of the process. Thankfully in the world of big data, the guesswork is largely thrown out the window. Using an analytics package like Profitwell Metrics subscription analytics will let you track your churn and measure how effective your retention strategy is. You'll have hard data on what works and what doesn't, so you can make adjustments as needed. Just remember, data for retention is slow. If you change your retention email strategy today, your churn rate isn't going to plummet tomorrow, no matter how good that strategy is. Allow time for things to move and settle before making adjustments. 


8. Optimize with templates

Email marketing allows you a great deal of personalization, but you are very frequently saying the same sorts of things to multiple customers. Templates allow you to create the same basic message but personalize it to specific people or slightly varying use cases. This saves you time crafting customer retention emails but also makes it easy to refine and tweak your messaging - right from the subject line, body, and email signature, during the testing and iteration portion. Also, while creating templates make sure to add different email signatures in each template. Such email signature marketing practices can be highly effective in engaging and retaining customers.


Examples of customer retention emails that work (and why)

We could spend much more than a single blog post showing you examples of great customer retention emails. To keep things short, we've assembled three examples that we feel show the aspects that go into a winning retention email strategy. Learning from these successful companies and their approach to retention should help you in crafting your own emails. 


Asana's welcome email makes new customers feel valued 

Asana's product is all about helping teams work together. In their welcome email, they make sure to tell customers that they've not only joined their team of workers, but the Asana team as well. This first email is short, to the point, and designed to match Asana's branding perfectly. It wastes no time before introducing users to the first three steps they should take, allowing them to quickly get value out of the product without having to waste time trying to figure out how to use it.


Amazon's thank you email builds brand loyalty

Customers expect a thank you email when they place an order or otherwise engage with your eCommerce site, so this hardly feels like a retention effort at all. But a well done thank you email is absolutely a valuable retention tool that helps build customer loyalty. When you order from Amazon, you'll get a quick thank you note, branded perfectly to match the site. But at the bottom of the email, you'll see a list of products similar to what you just ordered. SaaS businesses could easily adopt this to show off different features, or perhaps a tips-and-tricks section. The point is for the thank you email to keep the customer engaged.


Zapiers' customer re-engagement email reminds users of their trial expiration

Users often sign up for a free trial and lose track of time. When that happens, the trial may end without them realizing it. Even worse, by the time you send out a reminder that the trial is going to expire soon, they might not have been reminded quick enough to have a solid chance at trying the product out. Zapier understands this, so not only do they resort to customer retention emails to remind customers of an expiring trial, but they offer to extend it if the customer needs more time. This costs them nothing and can be a great way to avoid losing a customer. 


Use Profitwell Retain to automatically reduce churn

Profitwell Retain, by Paddle, is a risk-free way to reduce churn because you only pay for performance. Using powerful algorithms combined with Profitwell's vast experience, Retain is the perfect complement to a good retention email strategy.


Localize your retention messaging

We live in a global economy, and as such you have customers all over the world. Not all of those customers speak English as their native language. Customers prefer to read emails in their native language. So much so that you can increase your recovery rate by 5-10% with localized churn recovery messaging. With Retain, the translation is done for you automatically. 


Save deals with 1:1 personalization

We gave you some simple ways to detect customers in limbo earlier, but Retain's powerful algorithms supercharge your early churn detection. With retain, you'll be able to identify at-risk customers and take action before they churn. 


Win back customers with targeted offers

Retain will automatically send customer retention emails to reach out to recently churned customers with targeted offers designed to win them back. By leveraging the power of data, Retain will intelligently go to work to win back customers for you, increasing churn recovery by 10-15%.

Take the headache out of growing your software business

We handle your payments, tax, subscription management and more, so you can focus on growing your software and subscription business.

Get started todayTalk to an expert

Customer retention emails FAQs

What makes a good customer retention email strategy?

Customers churn because they aren't finding value in your product. A good customer retention email will sell them on the value. This could be by informing the customer of features they may not know about, or by teaching them how to more effectively use the product.


How do you retain customers who want to leave?

Customers leave for many reasons. Listening to feedback about why your past customers have churned and working to improve those situations helps. To keep customers in immediate danger of churning, use customer retention emails to reach out and make sure you are doing all you can to help them get the most from your product. Sometimes, a special discount or targeted offer will help customers decide to stay.


Can you win back old customers through email?

Yes! Email is a great way to win back old customers. Even if a customer has cancelled, they may still have access to your product for a period of time, and that is an opportunity to win them back. Reaching out to them and reminding them of this and of the value your product provides can make the difference. 

Additionally, you could reach out to those who have cancelled completely with updates or improvements you've made to your product. And if you've collected customer feedback properly, a personalized email with a solution to their specific problem, is a great way to open the conversation and possibly gain their interest again.


How long should you wait before re-engaging churned customers through email?

This depends on the email. A "sorry to see you go" email can act as an immediate retention effort if you offer to help the customer with whatever issue is causing them to churn. But you shouldn't wait too long; however, you do want to make sure you understand why they left to be able to deliver a strong and valuable re-engagement email. Generally, one to two months is long enough. As mentioned above, you should send a retention email to past customers when you add new features, which may increase the value they see in your product. 

Related reading