Why Paid Retention Might Be Cheaper Than You Think

Many eCommerce and retail businesses exclude current customers from paid advertising campaigns. Brands do not spend money to serve existing customers ads on Facebook, Google, and other platforms to avoid paying for conversions that might happen anyway. Instead, they choose to mainly use email as the main (or only) channel for retention marketing.

Should this practice continue? We argue that retention marketing via paid channels might be cheaper than you think.

Too many emails

When brands exclude paid digital channels from retention marketing plans, the few channels that remain are email, organic social, and perhaps direct mail. Where organic social is mainly reserved for brand building and content marketing and direct mail is few and far between, email becomes the main way to communicate with existing customers.

We can likely all name several clothing, furniture, home decor, beauty, and other brands that email us at least once a day. From announcing new product lines, sharing the latest sales and discounts, updating your rewards status, and reminding you about products you recently viewed, email becomes intrusive fast.

This can quickly become an issue if more important emails—like purchase updates, account lockouts, or expiring memberships—get lost in the shuffle. Excessive emailing can dilute brand value. What if brands reserved email for important, less frequent communications?

Switching channels

When daily emails become too intrusive, brands can make the shift to paid marketing channels, like Facebook and Google.

One strategy is to utilize custom audiences as a non-intrusive way to resurface impressions. Upload your current customer list to Facebook or Google to target those customers where they already are. You can use this channel just like you would email. Let your customers know about an upcoming sale, remind them about their favorite items, and share new products.

You can use customer lifetime value metrics to make this process work even better. With CLV, you can predict when each customer will purchase again or churn. Put together a custom audience of customers that might churn soon to remind them about your brand and entice them to make another purchase.

CLV can help you be extremely targeted with paid outreach. If you understand the journey for each of your customers, you can tailor things like discounts, content, timing, and more. For example, customize your discount offers based on the individual customer lifetime value. For someone with low CLV, it might not make sense to win them back with a 40% discount. If you’re worried about losing higher value customers, a steeper discount might be necessary.

With customer-level intelligence, you can run each campaign for a small subset of customers and only when necessary. Instead of mass targeting all of your customers with email on a daily basis, target those at risk of churn at the right time through a paid channel. You will keep costs low and reserve email for more important communications.

What about subscriptions?

A similar strategy can work for subscription-based businesses. While daily emails are less common for subscribers, you can still reserve that channel for the most important communications.

On paid social, surface campaigns about new content or products available from your brand or on your platform. Focus on upsell opportunities, like premium video content or add on products.

Again, you should understand the customer lifetime value of your subscribers. Make sure your highest value customers have easy access to the latest content, products, and benefits of the subscription. On the other hand, if you know a lower value subscriber will never purchase an add on product or premium offering, don’t waste ad dollars serving them campaigns on Facebook and Google.

Save email

Especially with more people working remotely and spending leisure time at home, it’s time to give email a break. When you switch some or all of your retention marketing efforts to paid channels like Google and Facebook, you can save money by saving your email channel.

Customers will learn that emails from your brand are important. Perhaps the email contains information about their purchase, an expiring rewards status, or major brand updates.

And, with customer lifetime value metrics, you can target the right customers at the right time on Facebook, Google, and other paid channels. It’s time to give email a much needed break.