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What is a retention email, and how do you use it?
7 min read

What is a retention email, and how do you use it?

In any business, finding new customers is a costly and time consuming process. No matter what strategy you use, you’re always going to have to spend a lot of money and time to not only find these new customers, but getting them to buy something, too.
What is a retention email, and how do you use it?

In any business, finding new customers is a costly and time consuming process. No matter what strategy you use, you’re always going to have to spend a lot of money and time to not only find these new customers, but getting them to buy something, too.

In the long run, retaining current customers is by far the most effective way to keep business stable. And that, of course, is where retention emails come in.

But what does a good retention email look like? What’s the angle? In truth, there are lots of angles, strategies, and ways that you can go about sending a retention email. But don’t freak out. Today, we’re going to go over all the nitty gritty details.


What exactly is a retention email?

The best way to start any sort of topic is to give it a definition. So what exactly is a retention email?

Well, it says it right in the name. A retention email is an email designed to keep current customers. It’s aimed directly at their needs, and brings value to your product or service on a regular basis.

time-is-money

But with that said, I’m a firm believer in examples. And as much as everything above rings true, it’s quite vague. Maybe this will shed a little light on the situation. Retention emails typically have at least 1 of the following goals in mind when sent:

  • Re-engagement
    A re-engagement email is aimed at customers that are already familiar with your brand. These are the customers that simply lost interest, which is why sending this style of retention email is fairly important.

  • Help drive your product value
    Part of retaining a customer is reminding them of why they signed up in the first place. Sending them an update email every once in a while can really help any customer understand the value of what they’re getting.

  • Highlight their value in your brand
    Everyone likes to know that they’re appreciated. One of the most personal and sincere emails a customer. A customer that feels appreciated is a customer that is retained.


Why are retention emails so important?

We’ve already listed a few ways you can use retention emails to help your brand, but the truth is that their value goes a little bit deeper than that. Numbers are always impressive, so here are a few statistics that might actually surprise you:

  • Acquiring a new customer can cost up to 7x more than retaining an existing one. Now that’s a lot of dough.

  • On average, you have a 60-70% chance to sell to an existing customer and you only have a 5-20% chance to sell to a new one.

  • With just a 5% increase in customer retention, profits can see as much as a 95% growth. Believe it or not, somewhere around 65% of your profits come from existing customers.

  • On average, it costs 16x more to bring a new customer to the same level as an existing one. This is, of course, after you’ve already acquired them as a customer.

Statistically speaking, retention emails are the best way to not only keep a steady profit margin, but to also increase profits regularly.


Who do you need to send a retention email to?

I’m certain that after reading those numbers above, you’re itching to learn more. After all, we all love profit, don’t we?

box-of-money

But all of this raises the question: Who should we be sending these retention emails to? This is a very valid question, but the truth is that the answer can and most likely will vary.

There are many variables that you can base your retention email campaigns on. If it’s a re-engagement email, your criteria might be that the customer hasn’t bought anything or used your online services for a certain period of time.

The key here is that you don’t want to flood people’s inboxes. As helpful as it would be to retain them, it would come off as unprofessional if you send them too many emails. As a rule of thumb, you should probably only reach out in a re-engagement email twice over the course of 2 weeks. This of course is after the customer has passed your predetermined period of inactivity.

As for the other 2 categories we mentioned (Driving your brand value/reminding the customer of their value), those emails are totally up to you. If you notice that your customers are reacting well to your appreciation emails, then by all means, send them regularly.

Although, no matter what, you’re going to want to segment your email list so that you can be sure that you’re sending the right emails to the right people at the right time. Let’s talk more about that.


Does email list segmentation help retention emails?

The short answer to the giant question above is yes. But, we’re not all about the short answer, are we? Absolutely not!

In email marketing, regardless of the campaign, email list segmentation is vital. Why, you might ask? Simply because not all customers are the same. Everyone comes from a different background, has different interests, and thinks differently.

woman-thinking

A segmented list will allow you to categorize customers and users based on criteria. These criteria will help you engage them in the most efficient way possible. Therefore, if you have an online tool that just released a new feature that’s aimed towards business owners, you probably wouldn’t want to send it to school teachers.

Or, let’s say that your brand just created a physical product that really helps college students. It wouldn’t do much good to send a retention email showcasing your new product to people out of the typical college age range.

List segmentation is absolutely vital for any email list. It will not only help you increase those profit numbers, but it will also help you decrease overall spending.


Retention email examples

We’ve talked about the goals of a retention email, but what are some real examples? What kind of email classifies as a retention email? It’s kind of a long list, but it’s definitely worth remembering:

  • Welcome emails
    Most people associate retention emails with something that happens long after a customer signs up. But remember as we discussed before, one of the goals of a retention email is to highlight the value of the customer. A welcome email is the first step in that regard.

  • Thank you emails
    Again, one of the goals of a retention email is to drive value. What better way to let the customer know that they’re valued than with a thank you?

  • Reminder emails
    Remind emails can range anywhere from sales reminders to cart abandonment emails. Simply reminding them of what’s going on can turn into an additional sale.

  • Milestone emails
    This is a very simple email strategy that can really drive customer value. Something like reminding them of a sign-up anniversary is a quick and easy way to let them know how far they’ve come with your brand.

  • Reward emails
    Everyone... I repeat, everyone loves a good reward. That’s exactly why you see all these credit card companies giving cash-back rewards when people spend a certain amount of money. The key is to reward them in such a way that they’re encouraged to continue being your customer.

  • Update emails
    Update emails are simple, but they let the customer know about any new major updates coming to your business. These emails can be tricky, as a lot of customers might not care as much as others.

  • Feedback emails
    Feedback emails accomplish 2 major objectives. For one, the customer feels valued by giving input towards the brand that they’ve come to be familiar with. Secondly, it gives you valuable insight on what the customers who know your brand and use your products really want.

  • Interactive emails
    This style of retention email covers a wide range, but it’s worth mentioning. Emails where you call upon customers to interact with your brand a little more have been proven to be quite successful. By interaction, I mean sending polls, surveys, videos, and other things outside the normal realm of emails.

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Now don’t get me wrong, this list can go on and on, and will grow even more as time goes on and email marketing advances. This is just a small little taste of the ways that you can help retain customers and drive value, sales, and customer satisfaction as a whole.


The conclusion

With all of that said, what have we learned about retention emails? We learned about their importance and value, we learned about their major goals, and of course, we learned how all of that manifests into an email.

To summarize, retention emails are a major cornerstone to the foundation of your email marketing strategy. They help remind customers of their value, drive sales, and maintain that ever important profit margin.

profit-margin

Keep in mind, however, that not everyone wants to be retained. As terrible as it is to lose a customer, it’s also inevitable. In order to maximize on your retention rates, you will most certainly need to do some A/B testing, as every customer is different.

All-in-all, retention emails should be at the top of your list of things to do as an email marketer. If they’re not something that you’re already investing a lot of time into, consider switching things up a little bit and focusing on them for a while. As the statistics suggest, I can pretty much guarantee that you will see improvements.