Marketers and sales leaders across B2B and B2C sectors are under immense pressure to grow their businesses. The big question is how, and the answer is likely right in front of you. Research shows that when it comes to increasing revenue, your current customers are actually the most valuable to your business. According to research from Gartner, 80 percent of your future revenue will come from 20 percent of your existing customers.
Of course, this trend doesn’t mean you shouldn’t raise brand awareness and seek out new customers. Instead, you should aim to both drive leads and nurture current customers. One of the best ways to do the latter is creating a campaign to specifically increase customer retention through subscription renewals. Here are seven ways to start 2017 strong by increasing your Q1 renewals using direct mail automation:
1. Personalize your messaging
Unlike customers who are brand new to your business, you know your existing customers pretty well. By using the customer data you’ve collected, segment your renewal list into different categories based on customer needs. For longtime subscribers, you could offer different tiers of "anniversary" deals based on how long they’ve subscribed. A customer that has been a year-long subscriber could receive a free edition of your magazine, for example, as a gift. While a five-year subscriber could receive something more substantial, like a t-shirt or coffee mug, when they renew. This rewards customers for their loyalty and shows your appreciation.
2. Re-engage churn-risk customers
Targeting customers who are at-risk of churning is a core part of any renewal campaign. To prevent churn, use customer data to anticipate which customers are the most likely to churn. Metrics such as the number of support tickets they’ve submitted and how long it’s been since they last made a purchase can indicate how engaged they are with your brand. If you expect a customer to churn, send them a special deal or service that will be likely to re-engage them.
3. Increase renewals with segmentation
Automate your direct mail renewal campaign with segmented lists to prevent losing customers because of a small detail, like an expiring credit card or change of address, fell through the cracks. Most credit cards will expire every three years, which means that up to 3 percent of your customers’ cards will expire each month. It’s standard to collect credit card expiration date data, so you probably already have this information. Create a direct mail list that is segmented by card expiration dates to automate sending out a renewal reminder when a customer’s card is about to expire. Additionally, you can use direct mail to find out if a customer has moved. If a mailer you send out is bounced back to you, create a trigger that will then email the customer to remind them to update their address. This way you can prevent losing customers to small details.
4. Sweeten the deal
An impactful way to motivate customers to renew their subscription is by mailing them an offer for a special deal. All too often new customers are offered discounted rates for signing up, but longtime customers are saddled with increased rates. If offering them a discount isn’t possible, try giving them a free gift for renewing instead, like a fridge magnet or tote bag. With a little motivation, they’ll be less likely to let their subscription expire.
5. Highlight relevant upgrades
An impactful way to reward loyal customers and drive renewals is offering upgrades. Send existing customers a postcard or brochure that highlights the benefits of upgrading their account. If you want to take this strategy a step further, offer existing customers exclusive access to new upgrades and features available before they’re released more broadly. This gives customers the opportunity to more deeply connect with your brand.
6. Share what’s to come
A foolproof way to get customers to renew their subscription is sharing a sneak peek of what new products and services to expect from your brand in the coming year. Generate excitement around what you have planned so that they won’t want to miss out. You could try mailing customers a catalog of future products, a newsletter that details what you have planned, or even just a simple postcard that lists new services. Once customers know what they’ll be missing if they don’t renew, they’ll be sure to continue their subscription.
7. Instill a sense of urgency
Creating a sense of urgency to drive renewals is a great way to enter the new year with solid customer retention metrics. Using the tactics we just listed, such as offering existing customers a discount for renewing or a special upgrade, in tandem with a deadline, can motivate customers to renew their subscription quickly or risk losing the deal. For example, you could mail customers a postcard that offers them 25 percent off of their subscription if they renew within the next 30 days.
Customer retention is easier with automation
While a main focus of marketers is driving new customer acquisition, marketing to the customers you already have is proven to be more likely to impact revenue. These best practices will help you get started using direct mail to drive customer renewals in the new year — but they don’t have to take up all of your time. Direct mail automation gives marketers a way to execute customer retention campaigns at scale.
With Lob, for example, marketers have the ability to run their direct mail campaigns with the same advantages and ease they experience with email marketing automation. You can digitally segment and personalize direct mail without ever needing to fold, stuff, seal, and envelope. If you’re interested in learning more, this this guide on the Lob blog includes a helpful breakdown on how automation makes direct mail easier and more effective.
As marketers increasingly use new tools to personalize their campaigns at scale, don’t let your direct mail channel get left behind in lieu of email or advertising. There are tools available that can help you save time and deepen the relationship with customers — at scale — with direct mail. It’s never too late to upgrade and evolve your direct mail strategy.