This week I’m coming to you with another loop: retention loops. You might be wondering. ‘Why is this girl obsessed with loops?’
Listen, right now I’m on a loop kick for several reasons.
I’m seeing too many brands unprofitably run ads.
I’m seeing too many brands, with great (innovative!) products spam their email lists with over the top discounts, which scream desperation, btw.
I’m seeing too many founders and marketers make critical mistakes in their strategy by not listening to their customer base.
It all makes me wanna cry but instead I’m gonna save my tears and write this blog post.
Most people get retention loops wrong. They’ll tie it to a specific tactic or hack. They’ll listen to a random podcast of a founder speak about an app they swear transformed their business overnight. Or worse, they’ll read an article about loyalty programs and implement it only to find that their customers don’t ‘give a flying flip about collecting points to ‘save’ on their next order.
Your short-sighted way of viewing retention loops is causing you to miss the point and by extension, the money. Retention loops, when executed well, increase customer loyalty, boost customer lifetime value, and ultimately drive revenue growth for your business.
PERIODT.
How do retention loops defer from growth or acquisition loops? An acquisition loop is designed to get new customers rolling through your funnel by sharing your brand with others to unlock a built-in benefit within your product. A retention loop does not focus on getting new customers into the funnel; its a strategy that encourages customers to continue purchasing your products or services over time.
Nail it the first time
After the customer places their first order, they’ll see an email/ad/sms and they’ll continue to ask the age old question: “What’s in it (again) for me?”
If they loved their first experience with your product or service, the second time they’re confronted with the decision to buy from you again will be easier to answer and that’ll mean more sales for you.
But if their first experience was ‘Meh’ or terrible, no amount of effort in your retention strategy will move the needle. The first step to nailing your retention strategy is: deliver an EXCELLENT first customer experience. Experience is a bit broad, but it encompasses everything from product to packaging to shipping. Product use experience, product education, and product results (if your product has a longer activation period) are also key to nailing your customers first experience.
Find the link
The best brands know how to infuse their products into their customers daily lives. This goes in many ways but some clever ways I’ve seen brands master this is:
- Making their product a high quality and fast consumable product (Less than two-week activation period!). Think Glamnetic and Billie
- Exceptional branding: This brand has successfully aligned themselves with their customers core personalities and desires. Think Glossier and Apple
- Product linking: Brands who expertly design products to be more powerful or effective with an accompanying accessory, attachments or software update. Think Cadence and Bandolier
- Social good stacking: These are brands that sell high quality products with a customer promise that there is a charitable cause their purchase dollars will help fund. Think Cuddle+kind and Ethique
If your brand does neither of these things, retention loops are harder, but their still possible. Again, the best way to achieve this is to study your customers. Their behaviors will lead you down the right path.
Your product’s key benefit
Find the key benefit to your product, marry it to your customer’s behavior pattern and boom, you’ve got a killer retention loop. Think of it this way: If you sell office products, and you know your customer base loves your product quality but they complain that they have an issue with keeping the supplies in the stock for their office, I would build a retention loop that focuses on solving this problem continuously.
Maybe I’d:
- Create a subscription service that lets customers automatically set their replenishment cycles
- Instruct customer service team to call or email customers when they’re due for another order
- Make replenishment orders easier by offering a special replenishment discount
- Create a discount reward program that slashes their replenishment costs by order size
If you have a fashion brand and your looking to build in a retention loop other than the out-of-the-box loyalty programs a million other brands do, I’d find an opportunity to innovate through:
- A built-in donation program that encourages customers to decide whether they want to return a product that will go to a person in need, as opposed to back to the warehouse.
- Promotes sustainability by offering a recycling program that encourages customers to send gently used clothing back to the brand and resell it as a ‘pre-loved’ item at a lower price.
- A size exchange program so effortless that it encourages a customer to exchange a high priced style for a different size 1-2 times within a 3 year period to accommodate body changes.
Open the floodgates
Innovate authentically to meet the needs of your customers and make it easier for them to access your brand again and again and again through clever retention loops. Whether they’re inherently built in or manufactured, retention loops, like acquisition loops are there to lessen your reliance on ads or other expensive retention channels. It makes your brand accessible to returning customers. Nail the first experience, enhance the connection and reemphasize your product’s key benefit to make retention go much further than you could ever imagine.
