7 Retention Marketing Tactics for Smart Post-Holiday Wins


7 Retention Marketing Tactics for Smart Post-Holiday Wins 

Feeling good about the recent holiday season? Hopefully, you executed a strong marketing and merchandising strategy, optimized your marketing budget, managed your inventory, rolled with any shipping issues, and acquired a bunch of new customers. Time to close the books on holiday 2021, right?  Wait! Don’t sit back with your matcha latte and put your feet up quite yet. 

It’s time for a little “regifting.” If new customers are a “gift,” you can regift them to yourself and your business by getting them to buy again—the sooner the better. What’s the secret? A focus on retention marketing strategies, powered by the valuable customer data that holiday eCommerce shoppers just supplied you with. 

Making sure to reconnect with customers soon after the holidays can be a quick win for additional revenue—and serve to nurture the start of long-term customer relationships. Retention efforts can provide value to customers who may appreciate personalized recommendations, offers, lifestyle content, and more. 

What is retention marketing?

It sounds simple: strategies and tactics to keep existing customers coming back to buy again. But it often requires a marketing mind shift to implement. Retention marketing is about long-term relationship building. Therefore, it goes beyond having to develop different creative for campaigns. A focus on repeat buyers can also impact big decisions you make around customer experience, promotions, customer support, return policies, and more.  

Why should you invest in retention marketing?

Customer retention efforts are key for increasing customer lifetime value (LTV), which keeps your eCommerce business healthy and profitable. Converting existing customers to purchase again is cheaper (lower cost per order/CPO) than convincing new customers to buy. You need this buffer to cover customer acquisition costs (CAC) for advertising, etc., which are forever increasing. 

Also, retaining existing customers is more profitable than acquiring new ones: returning customers tend to spend more than first-time buyers. In fact, the majority of your business likely is coming from existing customers (studies show roughly 65%), so it really pays to show them some love.

Therefore, post-holiday, it’s smart to make the most of your recently acquired holiday data with retention marketing to try and keep these new customers around for the long term. 

Optimizing customer retention 

How do you know how much you can spend on retaining customers and still be profitable? Do the math to determine your customer retention cost. This is a great data point to guide your ongoing retention marketing efforts:  

Also, optimizing retention marketing has everything to do with personalization. You’re rich with data—demographic, behavioral, and zero-party data. So, segment! (We’ll give you some segmenting inspiration in the next section.) 

Your retention marketing efforts should be tailored with messages, offers, promotions, and products that are built to resonate with specific audiences who are more likely to convert.

7 retention marketing tactics to bring holiday shoppers back

How can you get more from your data? Leverage it to fuel the following tactics: 

  1. Segment discount-code shoppers versus non-discount-code shoppers: If you’re just getting started with segmentation, an effective yet simple way to segment customers and boost your overall profitability is to group customers who have purchased with or without a discount code. 

    While discounts can be compelling, not all customers need them to be convinced to buy, so you don’t need to offer promo codes and sales to everyone, especially the customers who have purchased from you in the past without one. 

    Keep your margins healthy! Once you segment, develop different campaigns for each group, and leverage all your channels with consistent offers and content. 

Want to simplify and automate your retention marketing efforts? Daasity Audiences makes it easy to build segments and push them into marketing platforms like Klaviyo, Attentive, and Facebook, where you manage your campaigns.

  1. Segment holiday shoppers: While you’d like all your customers to shop with you all year round, inevitably there will be some customers who only buy during the holiday season. They’re valuable prospects for next year’s holiday season, but you probably don’t want to spend much budget marketing to them during other times of the year.

    With that in mind, another simple, useful segment to create after the holidays is a “holiday shoppers” list. You’ll be primed and ready to market to this group in the months leading up to Black Friday/Cyber Monday next year. 

  1. Make personalized product recommendations: Another effective way to bring back customers is to segment them by product purchased and sell them more of what they’ve already bought. Or, cross-sell them complementary products to “complete the look.” This is a great tactic to boost retention and LTV after the holiday season. 

    Also, a tip for next year: apply this tactic in December to try and get a spike in sales with a promotion before your last ship date. For example, look at your November purchase data, segment customers by product purchased, and promote the same or complementary products. 

  1. Create product bundles: Hooray for bundles! Customers like them because they make shopping and gift-giving easier. You like them because bundling products can help you increase AOV + LTV and offset increased paid media costs. 

    Post-holiday is a great time to analyze your data from all your new customers to see which products they purchased together. Then, use this information to create real or virtual product bundles. Depending on your business, a simple way to start is to bundle your top-selling products together. You also can consider bundling popular products with high-margin products that don’t sell as well to move more inventory at higher profits.  

  1. Time to second purchase: Get familiar with your customers’ time to second purchase (the time between a first and second purchase) on a segment basis.

    For example, if customers who bought body wash and shampoo typically buy again within 30 days, creating a segment of similar customers and sending an offer in 25 days can be a very effective retention marketing tactic to bring them back to buy again. 

Being strategic about how you time your post-purchase communications and promotions creates a great opportunity to encourage your new customers to purchase with you again as soon as possible. 

  1. Track fulfillment and shipment in real time: The customer experience doesn’t end after the credit card goes through. A crucial factor in retention is keeping customers happy by ensuring their order arrives on time. Or, if late delivery is unavoidable, proactively manage the communications about it. 

    Staying on top of fulfillment and shipping times is particularly important during the holidays, but it’s relevant all year long. In fact, it’s critical to look at fulfillment and shipping data every day. 

    You should know how many days it takes to fulfill orders and how long it takes to ship them (these times may vary). If you track fulfillment closely and know an order is running late, using bulk SMS you should have enough lead time to enable Marketing or Customer Support to reach out to manage customer expectations. 

  1. Track inventory in real time: Customer expectations impact customer experience, and good customer experience is critical for retention. The biggest bummer for a customer? You’re out of the product they bought. Overselling a product is a sure way to disappoint customers when you can’t deliver. You also don’t want to be handing out refunds left and right. 

    Mitigating refunds can also involve extra marketing communications and sometimes high-touch customer service efforts to offer exchanges or gift cards. While “don’t oversell” seems obvious, it’s surprising how often it happens. It can be particularly dicey for businesses after the holiday rush.

    Inventory issues occur because there are multiple moving parts, including what’s going on in Merchandising and Marketing. Closely monitoring inventory enables you to identify when to stop promoting products in ads and on site or decide to raise prices. 

    Or, the opposite may be true. If something isn’t selling, you can promote it more aggressively to boost sales. Managing this well results in better customer experiences, higher sales and hopefully customers who want to shop with you again.

Measurement: Post-holiday postmortem 

After the holiday season, it's best practice to use your data to help you understand if your holiday marketing was successful in engaging and converting “the right” customers—those who will purchase again and have high LTV over time (thanks to your retention marketing strategies). 

The following are two key methods to evaluate what worked and what didn’t.

Review your ad budgets

How did your holiday marketing perform? Which campaigns and offers and on which channels were most successful? How should you evaluate marketing success? A high-level way to monitor marketing channel effectiveness (particularly while you’re in the thick of the holiday season) is to track ROAS, or return on ad spend, by channel. 

ROAS is a marketing efficiency metric that shows how much revenue is generated for every marketing dollar spent. You can monitor ROAS during the holidays to watch for any sudden changes or red flags you’ll want to address on the fly. 

View of ROAS and CPO by Vendor in the Daasity platform

That said, while ROAS is a useful high-level metric that can help you keep tabs on your well-laid marketing plans, remember that it doesn’t measure profit. After the holidays, we recommend doing a deeper dive by analyzing ROAS in conjunction with other metrics to get a clear picture of your marketing performance, including contribution margin, AOV, CPA/CPO, and conversion rate.

Use the insights gleaned from your holiday data as a guide to help inform your Q1 and Q2 strategy—what to keep doing and what to cut back or shift entirely. 

Run a cohort analysis

Beyond analyzing your topline sales and which product sold the best during the holidays, it’s critical to understand the customer lifecycle and how that impacts LTV. You can do this with a cohort analysis. A cohort analysis is different from segmentation in that it’s time-based and helps you understand the customer lifecycle. You can use a cohort analysis to compare customers’ LTV:CAC ratio, or your ROI for each dollar spent on customer acquisition. 

A straightforward way to use a cohort analysis to understand LTV:CAC is to create cohorts of “customers from time of first purchase” and compare them on a quarterly basis. 

For example, track how much Q4 2020 vs. Q4 2021 customers spend each quarter in 2022. This helps you understand if the customers you spent to acquire during the holiday season are profitable over time or if you’re just breaking even or even losing money on them. 

View of LTV:CAC ratio over time in the Daasity platform

If one cohort has higher LTV:CAC than another, dig deeper: find out whether customers are spending more, or you’re spending less to acquire them. The tougher thing to figure out is why. Look at when and what they purchased and which channel they came through to your site to glean insights.

Leverage your holiday data for higher profits

Holiday success is more than hitting revenue goals. The “gift” of data you collect from all of your new customers can be a customer retention marketing goldmine to “regift” to your business to boost revenue into the new year and beyond. Remember, be targeted! Segment your customers so you can send them more compelling, relevant offers that more effectively convert.

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