Whether you are just starting out or looking to expand your reach, customer retention is a crucial part of making sure that you achieve sustainable success. It’s easy to focus on gaining new customers, especially when you are just beginning to market your brand. But if these customers don’t stay with your company for long, you won’t have gained much.
Retention efforts also happen to be cheaper than acquisition efforts, while increasing your retention rate by just 5% improves your profits between 25% and 95%. And while you have a number of options available to focus on this KPI (indeed, we’ve covered some on this very blog), you should consider affiliate marketing to improve your customer retention.
What is Affiliate Marketing?
A way for a company to sell its products by signing up individuals or companies (“affiliates”) who market the company’s products for a commission.
In other words, it’s involving key members of your audience to help you spread the word about your product and increase sign ups.
Generally, affiliate marketing is considered an acquisition technique: offer your customers the ability to earn an incentive by encouraging their peers to sign up, and you will increase your customer base. But in reality, the same strategy can also significantly benefit your customer retention efforts – if you know how to take advantage of the existing concepts.
Affiliate Techniques to Emphasize Retention
First, a note of caution: if possible, you do not want to engage in sales efforts with your existing customers through incentives. Instead, you should focus on that customer becoming an affiliate marketer on your behalf, spreading the word about your brand and encouraging their peers to sign up.
When engaging in that effort, focus on creating affiliates who may still be on the fence about your brand, and need extra convincing to return for more. Now, you can treat your affiliate marketing efforts as a type of loyalty program: by providing incentives to your existing customers for signing up new ones, you encourage them not only to help you increase your customer base, but also increase their engagement with you.
To achieve that goal, be sure to develop specialized communications for your affiliates. To effectively help you not only increase your acquisition but also your retention efforts, they need to have the motivation necessary to do just that. Provide educational content, along with internal updates that make them feel more closely connected to your brand.
Connecting Your CRM with the Process
If you engage with your audience without using a Customer Relationship Management platform, you may be worried that the above techniques require in-depth segmentation and technical knowledge to succeed. Fortunately, through effective use of a CRM, that is far from the case.
First, you need to find the right customers to engage as affiliates. As mentioned above, finding the sweet spot between existing customers who have just signed up and who are already loyal to your brand is crucial. Thanks to list management and segmentation options, your CRM will enable you to do just that.
Second, you need effective communication to your affiliates. Every good CRM comes with integrated email capabilities that allow you to not only send individual messages to your contacts, but set up automated communications to the above segmented lists. In other words, you can spend initial time to create your designed affiliate communications, before sitting back and watching the system do the work for you.
Of course, both of the above steps require a CRM system that can actually do the work for you. Especially for small businesses, finding a solution that matches your budget as well as your needs can be difficult. But if you are looking for a platform that can help you improve your customer retention, through affiliate marketing and otherwise, contact us.