There is a long-standing notion that it costs five times more to get a new customer than to keep one. This, however, is a little misleading.
While the cost of acquiring a new customer is indeed higher than retaining an existing one, companies focused solely on the 5X benchmark risk missing what matters most: how to engage with customers in a way that consistently delivers value.
Instead, deciding how much to spend on acquisition and retention is better judged by overall customer lifetime value (CLV), which represents the total revenue expected from a single customer. It’s calculated by multiplying the average purchase value, purchase frequency, and customer lifespan.
CLVs vary between customers and companies. As opposed to applying a blanket “spend 5 times more” rule, businesses that evaluate the full potential of their customers can better allocate resources and demonstrate ROI—ultimately driving growth by increasing the value of their existing customers.
Improving CLV starts, naturally, with an excellent customer experience that engages customers before, during, and after the buying process. This ensures your company remains top-of-mind. Post-purchase CX strategies, in particular, are critical for finding a balance between the cost of acquiring new business and retaining current customers. Tools like personalization and business text messaging can be easily deployed after purchase to create exceptional customer experiences that boost lifetime value. Let’s explore some common, field-tested customer retention strategies.
Customer retention strategies
Brands use a variety of strategies to enhance the post-purchase customer experience and retain customers. These include:
- Customer surveys: Surveys give customers a voice in how to improve your company
- Loyalty program: Customer accumulates points and rewards based on specific interactions with your brand.
- Emails: Engaging emails build an ongoing relationship with existing customers before and after purchase.
- Discounts and rewards: Surprise rewards or discounts to existing customers build goodwill and encourage re-purchase.
One strategy, however, stands out from the crowd: personalization.
How personalization solves this problem and better reaches customers
Regardless of channel, today’s customers expect and demand personalized communication. According to McKinsey, 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen. Personalized messaging doesn’t just meet expectations—it drives results. A study by Twilio Segment found that businesses using advanced personalization see a 40% increase in revenue compared to those that don’t.
Customers emotionally connect to your company when interactions are tailored to them, motivating them to continue doing business with you. But perhaps most telling is that 62% of consumers now expect companies to anticipate their needs, according to Salesforce’s State of the Connected Customer report.
So, how do you meet these heightened expectations and do more?
Personalization + business texting = retention
Emerging as a top-tier customer retention strategy, business texting combines the power of personalization with the convenience of a customer’s preferred communication channel.
Given the ubiquity of smartphones, it’s unsurprising that 74% of consumers say they are more likely to engage with a business if they can message them directly. And with open and response rates as high as 98% and 45%, respectively, no other medium comes close to texting in its reach.
This makes post-purchase texts a particularly powerful tool to show appreciation in an engaging, personalized way—creating a memorable customer experience worth coming back to. Some of the most effective ways to use personalized post-purchase texts include:
- Purchase confirmations – Texts confirming and thanking customers for their purchase make them feel valued and reassure them their order has been received.
- Shipping notifications – Personalized shipping and delivery texts keep customers updated on their order and reduce unnecessary service calls.
- Upselling – Inform customers of new and upgraded products and services, personalized according to previous purchasing habits.
- Cross-selling - Based on their personal data, texts can recommend items related to their interests and purchasing habits.
- Feedback - Text messages can ask customers for feedback on their purchases, letting them feel cared for and that their opinion is important.
- Loyalty programs – Keep customers in the loop on loyalty programs by informing them of benefits, point accumulation, flash sales, discounts and rewards.
Statflo’s Role in Personalized Messaging
Statflo’s business texting platform enables telecom professionals to effortlessly deliver personalized customer experiences that boost retention and drive revenue. Chat Starters and bulk messaging make it easy users to personalize every conversation and spend time on curating follow up messages.
For example, Atlantic Wireless, a Statflo client, used personalized texting to drive customer loyalty and engagement with personalized post-purchase follow up messages. This approach not only strengthened customer relationships but also drove measurable increases in repeat business. Read more about their success in our case study here.
Post-purchase texts, post profits
Sending a post-purchase text is just one of many occasions where you can leverage the combined power of personalization and texting.
Personalized texts can be strategically deployed along any number of critical points across the customer journey to create a better experience and drive your marketing strategy to better business outcomes by improving both customer retention and lifetime value.
In a marketing world characterized by increasing competition and tools, post-purchase texts are the solid, proven foundation upon which your business can build a better customer experience – for life!
To learn more about how Statflo can help your company monetize CX with personalization, check out our blog or request a demo now.
