Welcome back!

We hope everyone is ready to wrap up this month’s theme after a refreshing weekend! We’ve reached the end of the marketing funnel and now we’re ready to close the loop to keep on fueling the funnel. Nailing retention and advocacy ensures you have a constant stream of new potential customers flowing through the top layers.

Let’s dive in! 🏃‍♂️🚀

News

Tools + Productivity

Strategy

Loyalty

Retaining existing customers is way cheaper than hunting for new ones — just think about all the effort and money invested into ads and different content forms at the awareness and consideration stages.

In fact, it can take 5-20 times the amount of resources for businesses to get a new customer than to keep an existing one.

Maintaining high loyalty rates means getting the most value out of each hard-earned customer and maximizing your ROI. Returning customers usually spend 67% more than first-timers.

The most obvious way to keep customers hooked is by rewarding them for repeat purchases through loyalty and rewards programs. Chipotle has mastered the loyalty program game with lots of tempting options on which to spend reward points.

This almost recreates the thrill of spending your hard-earned Chuck-e-cheese tickets on candy and prizes (even though the cost of playing the games is higher).

These reward programs are a form of gamification, a potent strategy for driving consistent re-purchases.

Helpful reminders that your brand exists, whether through emails containing discounts, valuable content, or product updates, can strengthen a customer’s relationship with the brand.

Similarly, a regular newsletter (like this one) with a mix of helpful information and incentives for additional purchases can be a more inviting way for customers to stay connected.

Emphasizing company values and brand identity in engagement outreach tactics can increase customers’ emotional affinities with the brand, shifting the relationship beyond just being transactional.

Asking for feedback frequently makes customers feel like they have a say in the direction of product innovations, and actually implementing common feedback makes these customers feel heard and valued (reinforcing brand loyalty).

No green messages, please

In 2022, Apple’s Net Promoter Score (NPS) score was an impressive 72, compared to an industry average of 54.

To recap, NPS is a metric for measuring customer satisfaction or loyalty calculated by asking customers to rate their likelihood of recommending a product to someone ("On a scale of 1-10, how likely are you to recommend this company?”).

One success factor is Apple’s high-quality customer service — the company helps relieve purchase anxiety with its’ extensive warranty offerings and a large network of retail stores to fix problems in person.

If that’s not convenient, customers can go to Apple’s support page where other users can offer solutions.

Providing omnichannel support like this makes being an Apple customer feel like an end-to-end experience.

The ease and convenience of connecting your different Apple products (your Apple iPhone, watch, AirPods, MacBook, pencil, and iPad, for example) drives customers to make additional purchases to get the most out of the product line.

What’s more, since the company is constantly innovating, not having the best version of an Apple product gives users FOMO and inspires repeat purchases.

That’s how people get locked into Apple’s ecosystem of integrated products (you’ve already spent a ton of money on this product or that, so you might as well get the Apple version of any new product you need to get the most out of the interconnected ecosystem).

Finally, offering a high-quality product to begin with is probably the greatest contributor to customer satisfaction. The attention to detail in Apple’s product design is hard to match.

Did you know the Apple Pencil’s weight is distributed so that no matter which way it’s placed, it rolls over to display the word “pencil?”

This attention to detail makes Apple products feel hard to replace, an essential quality for any brand trying to hold on to customers.

Apple’s detail-oriented approach applies to the whole customer experience, with packaging designers testing prototype boxes to deliver the best sensory experience.

INFJ

Building customer loyalty can sometimes translate into the same customers advocating for your brand to others, even if “advocate” (INFJ) isn’t their Myers-Briggs type.

If you can secure this phase, you’ll have constant fuel for your funnel as more leads are drawn in from customers themselves.

What’s more, referred customers move faster down the funnel since the advocating customer likely communicated the problem it solved (awareness) and why it’s better than other options on the market (consideration).

If you can seal the funnel with advocacy, ad spending to cast a wide net for leads doesn’t have to be so high. Referral programs incentivize this form of lead generation for cheaper.

Earlier in the article we mentioned how communicating your values in marketing outreach is key to maintaining customer loyalty, but this specific technique can be even more important for driving advocacy.

That’s because if customers feel good about being associated with your brand, they’ll be more likely to flaunt it or share it.

You’d probably be more proud to wear and recommend a brand-labeled jacket from a company known for sustainability (like Patagonia) instead of a clothing company known for unsustainable and unethical practices (like Shein).

Put simply, some purchases bring embarrassment, and others bring about a sense of pride with feel-good factors like sustainability or social impact (like Hyundai’s Hope on Wheels initiative to help fight childhood cancer).

Key Metrics

To track improvements in customer loyalty and advocacy, keep track of the following metrics:

Your Customer Retention Rate: CRR = [(Number of customers at the end of the period — new customers gained during this period)/starting customers] X 100

Consistently looking at this rate and aiming to maximize it helps gauge how effective strategies to increase retention are.

The repeat purchase rate, or simply the percentage of customers making repeat purchases, is similar but better suited for brands offering one-and-done sorts of products.

On the flip side, minimizing your churn rate is another way to track improvements.

Churn rate = (Customers Lost)/Total Customer X 100

For quantifying the long-term benefit of each lead secured, look at the Customer Lifetime Value, or:

CLV = (Average) Purchase Value X Purchase Frequency X Customer Lifespan

Compared to your customer retention cost and customer acquisition cost, this metric determines the true net value each customer provides.

Looking Ahead

Now that we’ve gone over the full-funnel marketing strategy from awareness to conversion to advocacy, you’re ready to refine and strengthen your own brand’s marketing funnel.

Stay tuned for next week’s edition, where we’ll start a brand new theme for September!

the Marketing Funnel
Week 1: Awareness (TOFU)
Week 2: Consideration (MOFU)
Week 3: Conversion (BOFU)
Week 4: Retention & Advocacy (This week!)

Stay tuned!

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