customer retention strategies

These top customer retention strategies are optimal for CPG brands

Customer retention strategies are a high-priority for brands as the cost is significantly less to maintain a consumer’s loyalty than it is to attract a new consumer. In fact, one study notes it costs five times as much to acquire a new customer than it does to sell to an existing one. Keeping customers loyal is relatively easy. The challenge lies in getting those customers to become loyal in the first place.

Customer retention strategies differ from the strategies needed to gain new customers, as the customer is already aware of a product. Instead, the brand must build on that existing relationship. By connecting with consumers as they reach significant life milestones, encouraging them to share their experiences, and incentivizing ongoing purchases in the shopping aisle, brands can maintain consumer loyalty while gaining a higher marketing ROI.

Marketing Based on Life Events

Often, the best way to gain loyalty from a customer is to approach them when they’re first in the market for a new type of product. Consider a diaper company, for example. The company’s target demographic will be parents—but their ideal goal should be connecting with new parents who are not yet loyal to a specific brand. In this strategy, the brand acts as a guide because new parents will be less familiar with what kinds of diapers they’ll need, and which brands are on the market.

Marketing to consumers based on important life events is the best way to retain them, as it creates a relationship based on trust when the consumer needs it the most. In fact, life-event marketing is so powerful that consumer credit agency Experian provides a marketing list for brands based on three crucial life events, including:

  • New parent: Targeting new parents is an active area of opportunity for brands that sell supplies for babies, as well as for those that sell items which new parents may need more, such as cleaning supplies.  
  • New homeowner: When someone buys a home for the first time, it’s likely they won’t have all the little items that weren’t necessary essentials when renting. This opportunity is particularly powerful for those who sell home maintenance and landscaping items, as renters typically don’t need to keep these supplies on hand, and will not be familiar with what to purchase.
  • New mover: CPG brands typically overlook new movers, but they can be very valuable in gaining attention for local offerings. New movers may be entering communities for the first time where they’re not familiar with the climate, available stores, or local events. A welcome to the neighborhood packet can be a great way to share deals and other information about products.

Gaining the attention of consumers during these transitional periods can be enough to spur loyalty which will pay dividends in the years to come. There are many more opportunities which brands should consider, aside from the three that Experian offers. Brands should use their unique selling points to encourage ongoing purchases and loyalty.

Leveraging Social Proof

customer retention strategies for CPG brandsSocial proof is a psychological phenomenon in which brands can use word-of-mouth to drive product sales. Individuals often adopt the behaviors of others—whether they’re making purchases, participating in trends, or following a celebrity—and this can be a powerful way to gain loyalty.

To boost CPG advertising, brands should consider using contracts with influencers to get them to endorse products. This endorsement can both spread awareness of a brand’s products and solidify the relationship a brand has with existing consumers. The most significant benefit is social proof builds on itself. Individuals discussing a brand in a favorable light leads others to also participate in the conversation. This word-of-mouth strategy drives ongoing sales and encourages retention.

Rewarding Loyalty in Customer Retention Strategies

Another powerful way to retain customers is to offer them incentives for their continued loyalty. This is an approach leveraged by Starbucks with its top-rated loyalty program. The program provides rewards for every dollar spent and increases rewards after reaching a certain dollar amount. The app ensures those who make the most purchases, and who have shown continuous loyalty, receive the most incentives. This strategy encourages spending while rewarding customers and improving the consumer/brand relationship.  

Customer retention strategies mostly revolve around offering the customer an incentive for staying loyal to a brand.

Of course, one of the major problems with any rewards program is gaining adoption and retention. As consumers typically use retail-based rewards programs when shopping in a store, this strategy can be a challenge for CPG brands. One way to manage this is to use shopping apps to offer loyalty-based rewards to consumers. Using an app like Shopkick, for example, allows a brand to benefit from a rewards program without having to build and retain its own audience. Shopkick helps brands build loyalty and affinity using their own content and marketing message, but without the responsibility of building out a brand-specific app.

Customer retention strategies mostly revolve around offering the customer an incentive for staying loyal to a brand. Brands can reward consumers for making purchases, assist them as they reach new life milestones, and allow them to participate in a discussion about products with others in their communities. These strategies are also simple to support using third-party apps, which allow brands to take advantage of an existing audience while limiting the challenge of retention.

Shopkick’s partners use our app to supplement their offerings to their loyal customers by providing a gamified, innovative program for shoppers to enjoy in the store. For more information on our app and the features it can offer your customers, contact us.

Image source sirtravelalot



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Dima Volovik

EVP of Product and Engineering

Dima Volovik is the EVP of Product and Engineering at Trax Retail — Shopkick.

Dima Volovik is the accomplished product and engineering leader who led teams to deliver innovative and commercially successful e-commerce products, marketplaces, and enterprise solutions for Amazon, Comcast, Fandango, and Universal Music. Before joining Trax, Dima was the Director at Amazon, where he led product development and Engineering for Amazon Appstore and Amazon Prime Video, CTO at Fandango, and Paciolan, head of technology at Golf Channel/Golf Now, and Global VP of Direct to Consumer Technology at Universal Music Group. Dima’s expertise includes developing consumer products, marketplaces, and enterprise solutions.

Dima grew up in Baku, Azerbaijan, where he received his MS in Electrical Engineering from Azerbaijan Oil Academy, and he currently resides in Los Angeles, California, with his family.