How to Effectively Improve Customer Retention with Email

Great customer retention is one of the core metrics responsible for revenue and product growth post-product-market fit. As Customer Acquisition costs continually rise — retaining a customer today is essential to sustain healthy margins. So customer retention has to be heavily prioritized to keep the business viable.

But retaining customers isn’t a cakewalk. Churning customers often care the least about your product and are really difficult to convince to stay. This is why engaging customers who’re at the risk of churning is one of the most effective ways to retain them. This helps in avoiding cancellations and consequent churn.

And while there might be various ways to materialize this principle — email happens to be the most effective, and cost-efficient channel for it. 

Email marketing isn’t new by any means — and its merits are very well known. It’s the most cost-efficient acquisition channel not just in B2B, but B2C use cases as well. David Newman the author of Do-It Marketing says— “email is the only platform that helps deliver valuable, personalized touches at scale, all with relative ease.

Let’s learn how the benefits of emails translate into ROI for customer retention.

Why use emails as a retention channel

Email as a channel offers the most flexibility to marketers and businesses since it’s an audience and platform you get to truly own. This isn’t the case with other marketing channels, which provide momentary access to their audiences to generate engagement. 

Hence, adopting email marketing gives you the freedom to reach out to your customers throughout their lifecycle, at a fractional cost per touch. This gives you room to strategically engage your customers so as to retain them for longer.

Email is one of the best engaging channels, across all industries and not just a few. Using email as your marketing and onboarding channel enables you to nurture more leads. This improves conversions across the funnel and consequently helps you retain more customers.

Alternative channels for customer communication like phone, chat messenger and direct mail pale in comparison. Hence emails are the go-to choice for marketers and product managers who want to engage with customers to retain them.

Next, let’s explore the strategies that’ll help enable you to make the most out of emails as a retention channel. 

8 Effective Strategies To Boost Retention Using Emails

1. Prioritize adoption and reuse through onboarding sequences

When you start reaching out to your newly registered customers to help them understand the product better, prioritize product adoption and reuse. One of the leading reasons behind customer churn happens to be customers’ perception or need of your products’ value. Or lack thereof. To ensure your product delivers on the value that customers signed up for — guide them through your product in a way they could use it to the fullest extent. The first step in optimizing your onboarding process is to define your activation point.

Help them understand your product features and how to use them through a series of trigger-based emails. These triggers can be set to go off while the customer accesses certain product pages and features.

This email from Wix is great. A trigger is set off when the user schedules their first campaign which delivers an email with best practices and tips to improve results. If the users start generating more value from their campaigns, they’re likely to send more of them and stay for longer.

2. Segment your audience based on engagement 

There’ll always be sizable segments of unengaged users and customers when you send out email campaigns. There are ones who haven’t opened most of your emails due to their busy schedules, and they exist within each of your email lists. This lack of engagement could be attributed to the email content being irrelevant for certain users, email deliverability issues, etc. 

Over time, if you keep reaching out to users who aren’t engaging with your emails, your ESP takes that as a signal for spammy or marketing activity. This severely hurts your email deliverability. Similarly, you run the risk of agitating the same users into reporting your emails as spam This phenomenon also degrades the product experience for your unengaged email audiences — which isn’t great if customer retention is a priority.

Clean your email lists of contacts that haven’t engaged with your content in a while. Only send them essential communication, apart from a couple of marketing emails and updates. You can also try cycling them through other relevant lists in your audience, to see if they can be re-engaged with new content. This will help you keep your deliverability and engagement rates healthy, which in turn contribute to a better product experience.

3. Be candid and personalize heavily

Over 306 billion emails were sent and received each day worldwide in 2020 — and this has led users to learn and ignore emails that might not be relevant, or don’t catch their attention. This is similar to Banner Blindness where visitors learn to ignore advertisements on websites, i.e. turning blind to content that’s irrelevant. 

When you reach out to your users, chances are, your emails are being ignored since your content might not be of immediate importance to them. One way to overcome this is by personalizing your email content as per your audiences’ preferences and attention. If you’re collecting data on your users’ product engagement and usage, use them as part of your email content. This makes your emails more targeted and relevant, delivers more value to your users and improves product engagement.

These emails can easily be personalized by using automated email campaign tools that have personalization and targeting built-in. Such campaigns can help you send your outreach emails at scale. And by adopting it as part of your customer journey, you can both improve marketing and sales yield while reducing churn and payment failure rates at the same time.

The above example from Netflix is a great example of this approach. Based on subscribers’ viewing data and trends, they’ve sent content recommendations for subscribers to keep watching Netflix. Subject lines reflect the candid nature of the email, making it easier for Netflix to grab the subscribers’ attention. Both these strategies help Netflix engage the subscriber better, so they can keep watching new content and stay subscribed to it.

4. Reward users on hitting milestones and benchmarks

As discussed in one of the earlier points, users’ perception of value is essential to keep them engaged with your product and retain them for longer. And lack of value perception can be attributed to factors like poor customer onboarding and user experience, not being able to translate features into benefits, etc. The latter part is important (and tricky) since features today are commoditized. Lack of benefits associated with your products can lead users to try out competing products, and eventually, churn.

One way to solve this is by reaching out to users who’re actually engaging with your product, and making improvements while using it. Reach out to users on hitting milestones and benchmarks, signaling progress towards their goals and achievements. This can make your product feel more valuable, and promote users to spend more time with it in order to get further ahead and make more progress.

In the above example, Starbucks sends an email congratulating users on earning bonuses that can be redeemed for drinks. This not only reminds the user of the Starbucks loyalty program but also promotes product usage. And in this case, they accomplish that by rewarding users to spend more with Starbucks.

5. Conduct customer success outreach

While using your product, your customers’ experience can vary based on your product and the outcome it provides. Some customers might have a great experience and might be happy, and vice-versa with a few others. So when the product experience and outcomes don’t match your customers’ expectations, they’re likely to cancel and churn. 

This is where customer success outreach comes in. If your customers are getting stuck and not able to make the most of your product, find a way to engage with them right then. Collect passive or active customer feedback, make sense of what your users are saying. Direct their insights to the appropriate team (product, development, customer success) so you can create better experiences over time. By getting a hold of them early in the process that eventually leads to cancellation, you can avoid churns, or at the very least delay them. 

Set up events and triggers that signal such instances, i.e. users getting stuck, or products not delivering an expected outcome. And when they do happen, you can have automated emails triggered to go out to your users. This way, they can get the support they need before they decide to stop paying for your product.

6. Share case studies and research

Users might sign up for your product for a variety of reasons at varying levels of intent. So there’ll be a chunk of users who might sign up for the product for the sake of evaluation and stop engaging once they find it unfit. Naturally, these customers are least likely to convert touchless, unless they’re nurtured.  

Sharing case studies and customer stories is one of the best ways to nurture such users. Case studies are categorized as sales enablement content. They help customers understand the product better in a couple of ways. Firstly, it gives your leads a better perspective on your product and how it could fit their use case, and then it also provides them with social proof. 

Sales enablement content works across the sales funnel — and is equally impactful on trial users and unengaged paid users. Sharing such content tailored to the users’ needs can go to great lengths in improving customer trust, improve onboarding performance and product engagement.

The email of Hubspot is a great example. They reach out to a new trial user who’s not active and add tips to help them make the most out of the tool. Apart from that, they’ve also asked to reply to the email as a call to action for the outreach, so users can get their queries answered. This practice enables users to explore and make the most of their trials while keeping them engaged with the product. This consequently reduces trial drop-offs and improves retention.

7. Build a private newsletter exclusive for loyal users

Once your product or business is in the product-market fit, you’ll see a steady inflow of leads and conversions, but also constant churn. There’ll always be users who wouldn’t find the product to be a good fit for their use, or find your competitors to offer better value. So apart from your product’s lack of functional features, lack of differentiation can also lead to your new users looking for alternatives.

One way to differentiate your product would be to add another layer of value — in the form of exclusive content. If your business is built on a narrative (eg., inbound marketing w.r.t. Hubspot), build a newsletter based on it, exclusive for your loyal and engaged users. Private newsletters have a lot of perceived value, and bundling them with your product makes it difficult for users to cancel. Apart from making your product valuable and differentiated, it also rewards your users to stay engaged with your product. This builds a retention flywheel for your product that compounds in impact.

8. Engage at churn touchpoints

As we discussed in several of the strategies above — a user will inevitably churn if their expectations with the product aren’t being met. They can also churn if their priorities changed over time, or your product no longer serves their uses. Since subscription and contract cancellations in Software and services businesses are touchless most of the time, avoiding churn on cancellation becomes tricky. Your customers have the power to stop paying you and do so without any intimidation. 

To retain users at such instances, reach out to them when they cancel, looking for reasons that might have led to the cancellation. This will not only give you an insight into user behavior and priorities, but also enable you to help them solve their problems, and retain them. There’ll always be customers who’d rather stay with you if you were to help them with their priorities and use cases instead of switching to alternatives. And by reaching out to them at the cancellation and churn touchpoints, you’re making it easier for them to derive more value out of your product. As a result, you get to retain a few of the users who’d have originally churned. 

You can also keep such users on a sequence of sales and discounts-related communication, and give them opportunities to get back onto your product. By sending out offers and billing discounts, you’re making it easier for your churned customers to convert, in case your ideal customers are price-conscious.

Be Quick To Reach Out & Provide Value

When it comes to retention and churn — your users’ expectations from the product and the resulting outcomes they generate matter a lot. And oftentimes, we can’t control those from our end. Hence, being quick in reacting to cancellations and other events leading to it is key in helping retain such churning users.

There is no real replacement for product value for your customers. So over the long term, keep a track of your ideal customers’ priorities and use cases. When you adapt to your customers’ priorities, you’re more likely to retain them. In the short term, offer instant and seamless customer success and support that help customers bring expected outcomes out of your product. Together these strategies fuel your retention and will ensure your customers don’t leave you unless they absolutely had to.