Retain Customers to Grow Your Business

It's more important than ever for your business to retain the customers it has. The way people shop has fundamentally transformed in recent years, so your customer retention strategies must also evolve.

In this article, we explore strategies marketing and advertising professionals can use for customer retention and ways Facebook can help to improve performance.

Reading time: 4 mins

The value of customer retention

The last few years have introduced a wave of new shoppers to the digital marketplace. To keep those shoppers as customers for the long term, it is critical for advertisers to understand and evaluate how to approach customer retention.

The cost of customer churn

A failure to retain your customers can hurt your bottom line. A high customer churn rate also affects your customer lifetime value and creates pressure to acquire a greater number of new customers to replace those you’ve lost.

Conversely, investments in customer retention may help:

  decrease your churn rate.

  lift your customer lifetime value.

  improve your conversion rate.

Your retention strategy helps nurture customers into a long-term relationship with your brand, which in turn supports the long-term growth of your business.

Remarketing and the customer lifecycle

When you put the customer at the center of your retention strategy, you're better positioned to engage them with relevant experiences across their customer journey.

Let’s look at how you can remarket to customers at different stages of their lifecycle.

  Trialists

Trialists are customers who have engaged with you but haven’t yet purchased.

In the short term, remarketing to trialists can encourage customers to make an initial purchase when they’ve expressed interest in a product.

For example, a new customer has left a tshirt in their cart at an apparel store. The brand sends them a reminder with a discount offer to encourage a purchase.

   Lapsed

Lapsed customers have purchased from you but haven’t returned.

In the middle term, remarketing to lapsed customers facilitates repeat or complementary purchases.

For example, a customer has purchased organic chilli flakes from an artisanal grocer. The advertiser shares a recipe that calls for the chilli flakes along with a garlic-infused olive oil.

   Loyalists

Loyalists are customers who continue to return to you.

Long term, the targeting of existing customers can foster ongoing purchases more often, loyalty and a deeper connection between them and your business.

For example, a makeup brand invites loyal customers to a VIP online launch for a new eyeshadow range before it officially becomes available in stores.

When you look at your existing customers in this way, you can better meet their needs by providing a relevant experience.

Relevant ad experiences that data can power

Consumers now expect a balance of privacy and personalization, and your retention strategy should reflect this.

The advertising industry has continuously evolved to meet these expectations and provide people with greater transparency and control over how companies use customer data. These changes have and will continue to reduce visibility into the actions people take on websites or mobile apps.

Fortunately, personalized advertising doesn't need to compete with the expectations people have for their privacy. The two can coexist. Businesses can implement solutions and strategies to meet these privacy expectations and continue to reach people with the right message at the right time.

Dynamic ads for retargeting are an effective way to create relevant ad experiences at scale.

In a Conversion Lift study of 15 global ecommerce and retail advertisers, we found that when advertisers used dynamic ads for retargeting on lapsed customers, on average, they saw a 31% lift in buyers and a 24% lift in purchase conversions.*

*Among 15 global ecommerce and retail advertisers [APAC (N=8), EMEA (N=2), and NOAM (N=5)] in Q4 2020 and Q1 2021, in a single-cell Conversion Lift study, we found that when advertisers used DART (Dynamic Ads with Retargeting) on lapsed customers, on average, they saw a 31% lift in buyers, and 24% lift in purchase conversions.

Improve retention performance with Facebook

These three key principles can help improve retention performance with Facebook.

Connect the data sources
Data sources include the information you share with us about your customers through the Facebook pixel, Conversions API, Facebook SDK or offline conversions.

Increase liquidity
Liquidity provides flexibility to your campaigns across factors like placements, audiences and budgets, so machine learning can do the heavy lifting. Facebook offers this liquidity through campaign options such as Campaign Budget Optimization and Automatic Placements.

Creative is critical
Creative should be in line with how and where customers consume digital content. Don’t simply repurpose your acquisition marketing for retention. Tailor your campaign creative to customer intent.

Best practices for retention strategy

Consider opportunities to implement these best practices in your retention strategy.

   Test new channels
To improve your reach, explore new channels beyond your owned channels or traditional media. Consider opportunities to connect with customers where they already spend their time.

   Consider your offer
Pay attention to the action you want your customer to take. What are you offering to entice them to take this step?

   Remarket to your customer lifecycle
Identify your trialists and lapsed and loyalist customers, then tailor your remarketing to where they are in the customer lifecycle.

   Be more customer-centric
Meet your customer needs for privacy and personalization. Dynamic ads for retargeting can help you achieve personalization at scale.

How to develop retention strategies

The following setup outlines ecommerce campaign best practices. We recommend implementing this setup to support your retention strategy.

Get started
We created a toolkit to help you implement, optimize and accelerate your retention strategy.

To get started download the toolkit here.

To learn more, explore these resources on Blueprint:

Dynamic ads

Connecting the data

Liquidity

Creative