What if 1/3 of your churned customers…stayed?
33% of customers churn because they don't feel a personal connection with a brand (Annex Cloud). Since increasing your retention rate by just 5% can boost profits by up to 75%, losing 33% of your customers due to lack of personalization is a costly mistake. But you're here to change that.
This course will guide you through using the intelligence section of Klaviyo Advanced KDP or Marketing Analytics to build a retention strategy that not only improves your customer relationships, but also directly impacts your bottom line.
Let’s start with a baseline: calculate your retention rate
Before diving into advanced strategies, it's crucial to know where you stand. Follow these steps to calculate your current retention rate. This will serve as your benchmark throughout the course.
Step 1
Create a segment of customers who purchased last year AND within the last 6 months.
Step 2
Create a segment of customers who purchased from your store last year.
Step 3
Use the formula to your right for retention rate: Segment 1/Segment 2 x 100 = retention rate
Now that you have your baseline, let's explore how the intelligence section of Klaviyo Advanced KDP or Marketing Analytics can help you build a retention strategy that drives results in the next 30 days and beyond.
What your retention strategy can look like in real life
To see this in action, follow Alice’s journey from being a new customer to becoming a Champion, all powered by the intelligence section of Klaviyo Advanced KDP or Marketing Analytics. You'll see how automated strategies can personalize the experience for not only Alice, but each customer group.
If these groups don't yet make sense, that is okay. The goal is to show you how dynamic your strategy can be with the intelligence section of Klaviyo Advanced KDP or Marketing Analytics. Throughout this course, you will get a deeper understanding of what these groupings mean and how you can optimize your marketing strategy with the intelligence section of Klaviyo Advanced KDP or Marketing Analytics.
Meet Alice: the adventurous foodie
Alice is always on the lookout for new culinary experiences, and her friends love her for it. She discovered Bola’s Baked Goods, a local bakery expanding nationwide, with a targeted Meta ad. Bola’s ran a lookalike campaign from Meta off their Champion segment that they identified in their RFM analysis report, which reached Alice thanks to her adventurous palate and sweet tooth.
Alice was hooked and ordered a Funfetti cake for her next dinner party.
The challenge: keeping Alice engaged
Alice’s first purchase was a hit, and Bola’s post-purchase flow encouraged her to buy the chocolate ganache cake for her mom’s birthday, which Bola’s identified as the most popular second purchase after the funfetti cake using the product analysis dashboard.
Looking at their RFM analysis, Alice went from being a Recent customer to a Loyal customer. She was well on her way to becoming a Champion, and Bola’s wanted to keep her engaged.
Analyzing the drop-off with insights
After Alice’s second purchase, she was on the hunt for the next big thing, and put Bola’s on the backburner. Bola noticed this pattern in their entire customer base. Leveraging Klaviyo's conversion overview dashboard, Bola's saw that not many customers converted more than 2x within a 1-year period.
Hoping to reverse the trend of losing engagement during a critical point of the customer journey, Bola’s ran a funnel analysis of where Loyal customers, like Alice, drop off. The analysis showed that while Loyal customers were opening emails and clicking into the site, they weren’t making that crucial third purchase.
Personalizing the "Loyal" and "Champion" experience with loyalty points
Bola's realized they needed to experiment with the onsite experience for Loyal customers to reduce drop-off. With Klaviyo Advanced KDP*, they used the group membership API to create a personalized website experience for Loyal customers, replacing the cake image with cake pops to highlight products that aren't tied to a special occasion, as well as sending an invitation to their loyalty program. This strategy led to more repeat customers and incremental revenue gains. However, Alice wasn't swayed by loyalty points.
*Group membership API is not available in Klaviyo Marketing Analytics.
Personalizing the re-engagement strategy
Alice fell from Loyal status and became an At Risk customer. This change triggered a flow that Bola's created to reach customers at key inflection points before they churn. Alice received an email with a discount to one of Bola's subscription boxes. Out of three options, Alice was enticed by the ‘foodie’ box: this box was a monthly curation of brand-new products that Bola’s shares exclusively with their subscribers before offering to their full customer base.
As a foodie, Alice enthusiastically signed up. This personalized approach rekindled her interest, putting her back on track to becoming a Champion customer.
What does this look like at scale?
Not every customer is just like Alice, and not every journey will look like Alice’s. Customer retention can be complex, and being able to recreate a personalized journey at scale requires a data-driven approach. By leveraging Klaviyo Advanced KDP, Bola’s Baked Goods was able to turn insights into personalized actions that resonated deeply with their customers. Imagine the impact this could have on your brand.