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Creating Effective Email Campaigns

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Creating Effective Email Campaigns

Customer retention is your ticket to profitable sales, which I explained in this post about the 80/20 rule and the lifetime of a customer. And I also discussed some key ways to earn customer loyalty, including staying in front of your customers.

Email marketing is a great way to stay in front of your customers.

But how do you create an effective email? Start with four key elements:

  1. From name: this should be the name of your business or website because that’s who they want to interact with and it avoids any deception, which is the first way to lose customers.
  2. Subject line: make it short, sweet and intriguing to allow them to quickly understand what the email is about and entice them to open it.
  3. Email content (body): can include images and text and should follow up on the subject line, outline the offer, state the benefits to the customer and include the call to action.
  4. Call to action: ask your customer to do something. What is the end goal of your email? This is what you want to tell them to do. “Shop now,” “Learn more,” “Click for details,” “Go shopping,” “Add to cart,” etc. You have to ask (or tell) if you want them to do something. Customers like to be encouraged to take action.

These four elements are the basic components of effective customer marketing: Get Interest, Get Opened, Get the Action.

Earn Customer Loyalty

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Earn Customer Loyalty

It is said in business that customer acquisition is an investment, but profitability is built on customer retention.

In other words, it typically costs you more to sell to a new customer than it does to a current one. As a result, your profits are higher when you sell to those who have already purchased from you.

Customer retention is essential to business growth.

So how do you earn customer loyalty and retain their business? Like any successful relationship, If you want customers to be loyal to you, you must be loyal to them. Your product must deliver on its promise as advertised. Once you ensure you’re fulfilling your end of the bargain, the next step is to begin your retention campaign.

Here are some tips to help you keep your current customers coming back for more:

Provide exceptional customer service

Oftentimes, customer service can be a key differentiator for companies that sell similar products. In today’s digital age it is all too common for companies to hide behind “digital walls.” This elusive practice can lead to lost sales and decreasing customer confidence. When customers have questions or problems they want them addressed — by a real human with real answers, not just a scripted list of FAQs or automated phone system. Two ways to accomplish this are through posting customer service phone numbers on your site and considering Live Chat type systems.

Stay in front of your customers

You can’t foster customer loyalty if your customers forget you exist. You must stay in contact with them on a regular basis preferably with information that ultimately benefits them in the end (remember it is about the customer, not you). Two ways to in front of them are through email and RSS feeds. The key here is to feed them information that helps them. Promotions on products, sales, etc. All of these are effective and should be a part of your communication, but don’t neglect the need to provide them with valuable content that helps better their position. This could be showing them new ways to use your product, complimentary products that may work well with the one they already have, tips from other customers, etc.

Develop customer friendly policies

If you want to keep customers happy, you must offer flexible policies. Don’t make it hard for them to return an item, get support for current, broken, or discontinued products, etc. Be flexible and understanding of their needs and above all else, make it right for them. Put these policies in place and honor them. If you don’t, your customers will run to the competitors that do, never to return again.

Consider implementing a rewards program

Loyalty or rewards programs are a great way to foster long-term relationships and repeat sales. Rewards can be managed in just about any way you can dream up, from earning discounts on future purchases to earning products at various levels. Just make sure your internal systems can handle the route you adopt.

Just about anybody can sell on the Internet. Selling profitably and doing it for sustained durations is what separates real businesses from short run fly-by-night operations. If given the chance, I’d rather build a sustained business that lasts many years than build a business that is here today gone the next. Profitability is a key element in this equation.

Why the Best Way to Increase Sales Is With Existing Customers

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Increase Sales With Existing Customers

Building a successful ecommerce business — or any business for that matter — requires you to retain customers and foster loyalty. Profitability in ecommerce is found through customer loyalty.

In a previous article, I explained the 80/20 rule and the concept of the lifetime value of each customer.

The 80/20 rule holds that 20 percent of your current customers provide 80 percent of your business.

The key is to find out who those 20 percent are and cater to their every need.

These existing customers have a value — what they’ve already spent and what they will spend over a lifetime with you.

To increase the lifetime value of a customer — and nurture your relationship with them — it’s a good idea to develop a retention program.

Here are 3 ways you can increase your customer lifetime value with your 20 percent:

  • Personalize the customer relationship and build rapport
  • Make yourself available and answer their questions
  • Deliver a monthly email follow up to improve communication and retention

You build lifetime value by nurturing your current customer base, listening to their needs, and delivering high quality customer service among other things.

Paying careful attention to your existing customers will help you build a more profitable and sustainable ecommerce business.

 

Earning Customer Loyalty

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Earning Customer Loyalty

It is said in business that customer acquisition is an investment but profitability is built on customer retention. In other words, it typically costs you more to sell to a new customer than it does to a current one. As a result, your profits are higher when you sell to those who have already purchased from you.

Customer retention is essential to business growth.

So how do you earn customer loyalty and retain their business? Like any successful relationship, If you want customers to be loyal to you, you must be loyal to them. Your product must deliver on its promise as advertised—but that is just the beginning.

Here are some tips to help you keep your current customers coming back for more:

Provide Exceptional Customer Service

Often times, customer service can be a key differentiator for companies that sell similar products. In today’s digital age it is all too common for companies to hide behind “digital walls”. Often times this elusive nature can lead to lost sales not to mention decreasing customer confidence. When customers have questions or problems they want them addressed—by a real human with real answers, not just a scripted list of FAQs or automated phone system. Two ways to accomplish this are through posting customer service phone numbers on your site and considering Live Chat type systems.

Stay in Front of Your Customers

You can’t foster customer loyalty if your customers forget you exist. You must stay in contact with them on a regular basis preferably with information that ultimately benefits them in the end (remember it about the customer, not you.) Two ways of staying in front of them are through email and RSS feeds. The key here is to feed them information that helps them. Promotions on products, sales etc… all work and should be a part of your communication but don’t neglect the need to provide them with valuable content that helps better their position.

This could be showing them new ways to use your product, complimentary products that may work well with the one they already have etc…

Develop Customer Friendly Policies

If you want to keep customers happy you must offer flexible policies. Don’t make it hard for them to return an item, get support for current, broken, or discontinued products, etc… Be flexible and understanding of their needs and above all else, make it right for them. Put these policies in place and honor them. If you don’t, your customers will run to the competitors that do never to return again.

Consider Implementing a Rewards Program

Loyalty or rewards programs are a great way to foster long term relationships and repeat sales. Rewards can be managed in just about anyway you can dream up from earning discounts on future purchases to earning products at various levels. Just make sure your internal systems can handle the route you adopt.

Just about anybody can sell on the internet. Selling profitably and doing it for sustained durations is what separates real businesses from short run fly-by-night operations. If given the chance, I’d rather build a sustained business that lasts many years than build a business that is here today gone the next. Profitability is a key element in this equation.

Your Current Customers Hold the Key to Bigger Profits

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Your Current Customers Hold the Key to Bigger Profits

If you want a sure way of increasing profits you should start looking inside your business. Shifting your sales focus from attracting new customers to enticing your proven customers to buy again is one way to increase your sales dramatically.

I’m not saying you should stop looking for new customers—not at all. However, it makes sense that your ideal prospect is one that has already converted – in other words, one of your current customers. We can also say with good certainty that the cost to generate a sale from acquiring new customers is higher than the cost of generating a sale from current customers.

Why? Because you have already spent the initial investment to gain your current customer and if retained properly, your investment to sell to them again should be far less. In other words, you put more revenue in your pocket from the sale to a current customer because the expense to persuade them to buy is less than the investment needed to win a new customer. This is how you build profit in a company.

The 80/20 Rule

The 80/20 Rule has foundations in economics and states that roughly 80 percent of your outcomes come from 20 percent of your inputs. Or in other words, 20 percent of your current customers account for 80 percent of your revenues.

Although the rule was proven using statistical analysis by a man named Pareto, they are not hard rules set in concrete and not every company will be like this. The ratio won’t be exactly 80/20, but chances are if you look at it closely, you’ll find striking similarities in your findings.

Wikipedia says this about the 80/20 rule:

The principle was suggested by management thinker Joseph M. Juran. It was named after the Italian economist Vilfredo Pareto, who observed that 80% of income in Italy was received by 20% of the Italian population. The assumption is that most of the results in any situation are determined by a small number of causes.

What does this mean for your business?

Well if it is true that 80 percent of your revenues come from 20 percent of your customers then it would be wise to invest in finding out whom that 20 percent is and make it a point to get them to buy again from you. Your bottom line should see a nice bump each time these current customers repeat purchase and the cost to get them to do so will be next to nothing.

This brings me to my final point. Each customer holds a value to your company beyond the initial sale.
Jim Rohn once said, “One good customer well taken care of could be more valuable than $10,000 worth of advertising.” What you do when you keep customers happy is build what is called Lifetime Value, and knowing what it means to your business is critical to building profits.

Customer Lifetime Value

The lifetime value (LTV) of a customer can be defined as the total amount an average customer will spend with your store over the period of time that they are your customer.

It is important to know your customers’ lifetime value so that you can make informed decisions about your marketing costs, budget, and customer acquisition strategies.

Wikipedia defines customer lifetime value as:

In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) and a new concept of “customer life cycle management” is the present value of the future cash flows attributed to the customer relationship. Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales.

For example, if your customers’ lifetime value is $400 and it cost you $50 to acquire that customer then that customer is considered to be profitable ($400 LTV – $50 CPA = $350 Profit) and obtaining similar customers would be wise.

Taking that example one step further, if your average customer purchased a product worth $40 ten times from you then their lifetime value would be $400. If it cost you $50 to acquire this customer then the customer is still considered to be profitable even though you spent more to acquire them than the average revenue generated from one sale ($400 LTV – $50 CPA = $350 Profit.)

You build lifetime value by nurturing your current customer base, listening to their needs, and delivering high-quality customer service among other things.

Here are 3 ways you can increase your customer lifetime value.

  1. Personalize the customer relationship & build rapport.
  2. Make yourself available and answer their questions.
  3. Deliver a monthly email follow-up to improve communication and retention.

In Summary

Building a successful ecommerce business—or any business for that matter, requires the ability to retain customers and foster loyalty. Profitability in ecommerce is found through customer loyalty. The 80/20 rule holds that 20 percent of your current customers provide 80 percent of your business—you need to find out who those 20 percent are and cater to their every need. Lifetime value increases by developing a retention program that nurtures the relationship between you and your customer.

Paying careful attention to these elements will help you build a more profitable and sustainable ecommerce business.

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