Sep 10, 2020
How Home Brands Can Use Email & SMS Marketing to Improve Customer Retention
“Make new friends but keep the old. One is silver, but the other’s gold.”
This old lyric may come from the Girl Scouts, but it may as well have been written by home brand marketers.
Naturally, home brands have to think about customer acquisition — the “new friends” of the retail world — but your existing customers matter too. In fact, retention may have even more of an impact on growth than acquisition.
Just like keeping old friends, retaining existing customers means staying in touch. That’s where SMS and email marketing for home brands come in. These channels are perfectly suited to the kind of ongoing relationship that you want to have with your customers, and they’re easy to use as well.
The Value of Customer Retention
Marketers say that it costs five times more to attract a new customer than it does to retain one you already have. The exact dollar value difference varies by industry, product, and even customer, but 70% of marketers agree that retention is definitely less expensive.
Part of the reason is a customer's willingness to buy. At any given time, a marketer has a 60% to 70% chance of selling to an existing customer, compared to a 5% to 20% chance of selling to a new prospect. Those new prospects don't have any investment in the company, so it takes more time and resources to persuade them.
Existing customers also spend more. The higher average order value (AOV) drives a higher return on marketing investment. They spend about 31% more and they’re 50% more likely to try new products.
When you market to existing customers, you nurture a sense of loyalty, keeping your brand at the top of their minds so that when they need home goods, they’ll think of you.
Personalizing Your SMS and Email Marketing Efforts
Research shows that 80% of consumers are more likely to buy from brands that personalize shopper experiences. SMS and email give you multiple opportunities for personalization.
You can segment your audiences and send specific messages to customers who have browsed or bought certain products. You can even set up “drip” campaigns or flows so that people get entire sequences of related messages, each one based on how the person responded to your previous message.
Your SMS and email campaigns may go out to groups of customers, but for the person receiving the message, it feels like you’re speaking only to them. That one-on-one feeling is even stronger when you can track what messages resonate with customers and plan your future outreach accordingly.
That’s exactly what the brand GhostBed did. With help from email and SMS provider Klaviyo, GhostBed collected phone numbers from existing subscribers and emails plus phone numbers from new subscribers. The company tracked who signed up for SMS messages and who made purchases.
“In the future,” says Klaviyo, “they can use that behavior to target the right subscribers with a text message instead of an email — rather than guessing or sending the same message to the entire list.”
By messaging customers via the channels they prefer, GhostBed was able to strengthen its customer relationships and keep shoppers connected.
Email and SMS Marketing Campaign Ideas for E-Commerce Home Brands
Customer retention is also about making products and brands feel fresh. It’s less “remember us” and more “see what else we have to offer.” Especially for home brands, SMS and email marketing give you many opportunities to get this message across.
Blended Campaigns for Higher-Ticket Items More expensive items, such as couches and mattresses, are harder to sell than items with smaller price tags. People are more cautious about spending large amounts of money, and they want to be sure they make the right choice.
Blended email and SMS campaigns let you market these higher-ticket items more intensely. You can send different messages through each channel, offering more in-depth information via email and more personalized messages — “The item you looked at is on sale!”— over text. By diversifying your contact methods, you can more effectively stay in touch while the person is in research mode.
Integrating those ultra-personal SMS messages can help customers feel like VIPs, a strategy that can encourage the purchase of high-ticket items. One way to do this is to create a group of customers that have looked at or bought more expensive products, then send them exclusive offers when similar products are on sale.
According to Klaviyo, “People aren’t giving their phone number to just any brand, they’re reserving their limited phone storage for their absolute favorites, which is why you should be treating SMS subscribers like VIP customers.”
Upsells and Cross-Sells
Because repeat purchases of the same product are less common for home brands, retention-based marketing should focus on the purchase of other products.
That doesn’t mean sending the same generic emails that new prospects get to existing customers — old friends don’t want you to talk to them like they’re new acquaintances, and existing customers don’t either. They want you to use what you know about them to send personal, relevant messages.
With SMS and email marketing, you can use information about what people have bought in the past to upsell and cross-sell new items. That’s how cookware company Caraway marketed their new linens collection in 2020 with the help of Klaviyo. They sent an SMS message to their existing subscribers and, within 15 minutes, 46 subscribers had clicked and purchased.
When an existing customer makes a new purchase, you send a message about that purchase. These transactional messages, whether sent through SMS or email, give you the opportunity to cross-sell and upsell additional products.
Transactional emails have open rates of 80% to 85%, compared to the typical 20% to 25% open rates of marketing emails. People open these emails because they’re excited about receiving their new product. It’s a great opportunity to cross-sell products that would go with that item or ride the wave of spending to suggest a higher-ticket item.
When someone buys a new mattress, you could suggest a bed set to make the purchase feel even more exciting. When someone buys a couch, a matching rug or coffee table could be just the ticket. It’s all about keeping the conversation going.
Design Inspiration Messages
Email marketing and SMS are great ways to renew connections with customers and get them excited about home design. Maybe someone bought from you before and is just about to move, so they’re in the market to decorate. Or maybe they just need a change, and they want to replace that couch they bought from you.
You don’t necessarily know who these people are until you ask, and that’s where a retention campaign comes in. Email is a great foundation for a campaign like this. It’s visual - you can include many photos of how certain areas of a home are furnished and decorated with your products.
When people respond to these emails, you can use the information about how they respond to send SMS messages. If someone clicks through to a product page, you can text them a coupon code for that product category or one that’s related. If someone opens the email but doesn’t buy, a reminder text might be best.
The goal is always to maintain that reputation in customers’ minds as a knowledgeable, in-touch home brand. Just like you would with an old friend, reach out every once in a while with ideas for your next adventure together.
Going Forward: SMS and Email for Retention
As both a Shopify Plus partner and Klaviyo partner, we’re here to help your home brand integrate email and SMS marketing for optimize it for conversions and retention.
If you’re just starting to use SMS and email marketing to stay in touch with existing customers, remember: you’ve got this. There’s always room for experimentation. The important thing is to stay in touch and stay adaptable, creating new and exciting opportunities for the customer to buy.