smallBy David Standing, mybizadvisor

Most business owners know that it’s easier to sell to an existing customer than find a new one. Research conducted by the Harvard Business School has shown that business owners can increase their profits by 25% to 95% when they increase customer retention rates by just 5%. If you want to give your profits a boost – and let’s face it who doesn’t?! – I have outlined below how you can use digital marketing, in this instance email, to improve your customer retention.

Your immediate reaction might be that email marketing isn’t for you. Let’s start by looking at why this is such an effective way of improving customer retention. After all, it’s a communication method used by thousands of businesses of all shapes and sizes. So why is it so popular?

  1. The costs of sending an email to all your customers is much lower than say sending them a direct mail campaign. That’s not to say that direct mail doesn’t have a role to play in customer retention, but email is much cheaper.
  2. It is also much quicker to implement. Once you’re set up, you can send an email in a matter of minutes. There aren’t many other marketing communication methods which are faster.
  3. If you get the message right, you may also find your emails being shared by your subscribers to family and friends. After all, these are your fans and they can help you acquire new customers.
  4. Lastly email marketing is measureable. We’ll talk about this in more detail later but in a world where results and return on investment are key, email marketing rules! In 2011 the Direct Marketing Association estimated that the average return on investment for an email marketing campaign was £40 for every £1 spent. And if you sell high ticket items then you can reasonably expect to see a better return than this.

So whether you already use email marketing or would like to get started, here are my 7 steps to ensure that you get the best return for your efforts.

Step 1. Data – in order to send emails to your customers you obviously need their email address! But the more data that you can collect the more personalised, and therefore effective, you can make your emails. So consider how you can collect data such as first name, gender, date of birth, previous purchases and telephone number.

Depending on the products or services that you sell you may collect certain data at the point of purchase anyway. So make sure this gets added to their record in your Customer Relations System (CRM) – more on this in Step 3. Over time think about how you can add to this so you have complete, accurate and relevant data of every customer.

Step 2. Legal – Many people worry about the legal aspects of email marketing. This will vary depending on where you are. This information is based on English Law so please seek advice if you are not governed by this.

Under English Law, email marketing is covered by a number of rules, the main ones being The Privacy and Electronic Communications (EC Directive) Regulations 2003 and the Data Protection Act 1998.

Generally speaking however as long as you use common sense you will be fine!

  • Ask your customer’s permission to email them. See Step 4 on how best to handle this. Whilst this isn’t a legal requirement, it really is good practise.
  • Include an opt-out option on all emails. Most reputable CRM providers ensure that you do this by default anyway.
  • Don’t include very sensitive private information such as medical conditions
  • Make it clear who is sending the email – again this is a prerequisite of any reputable CRM provider

Step 3. Systems – Whilst it is possible to send multiple emails from most email accounts, using a professional CRM system is advisable. Depending on the number of records that you have many are low cost and indeed some are free. Mail Chimp for example is one of the best known and is super simple to use and if you have less than 2000 records is free. Do a little research and you’ll soon find the best system for you.

The benefits of a professional system are:

  • The ability to produce attractive emails using the system’s predesigned templates and to personalise these. The more specific and personal you can make your emails the better response you will get.
  • The ability to schedule emails to be sent ahead of time. This means you can prepare your email at a time that suits you and set it to be sent at the best time.
  • The ability to see how your customers are reacting to your email – who has opened it, clicked on any links you’ve included, forwarded it and so forth.
  • As outlined in Step 2, these systems help with some of the legal aspects of email marketing such as ensuring you have an opt-in/out option in every email. They will automatically update the customer’s record should they chose to opt out so you can’t inadvertently email them in the future.

Step 4. Give them a reason – as previously mentioned, the best way to ensure that your customer opens your email is to ask for their permission to add them to your list. Give some thought as to how you’re going to do this. Simply saying you’ll send them a regular newsletter is a little dull. If however you say you’ll be sending privileged offers, invitations to exclusive events and so forth then they are much more likely to agree and more importantly open the email when it arrives in their inbox.

Step 5. Type of messages – so now you’re set up and ready to go, you’ve got your data and have a professional CRM system, it’s time to plan your email campaign. Take time to brainstorm a good mix of message that you can send. The key with email marketing is consistency; sending a medium length email regularly is much better than a long one sporadically. So plan the next six to eight weeks making sure that you deliver valuable information and content.

Remember that you’re aiming to build customer retention so aim for a mix of what’s happening in your business, information that’s relevant to their purchase, special offers that may be available ahead of the general market, competitions, case studies on customers…. You get the idea!

Step 6. Timing – Test sending emails at various times and days of the week to see when you get the best open rates. This is important to get right so that you get the best return for your efforts. For example many selling business-to-business find sending emails at 5am Tuesday get the best open and response rates.

Step 7. Analysis – Schedule time to review your email stats. By looking at what they have responded to you will learn lots about your customers. This research will help you shape not only your email communications going forward but also other aspects of your business.

I hope that this has shown how email can provide an effective marketing channel when it comes to increasing customer retention. Use these steps to get started, and you will see an increase in customer happiness – which will lead to more retained customers.


David Standing is one of the founders of mybizadvisor, helping businesses grow by showing them how to take advantage of the world of digital marketing.

If you would like a free, 30 minute call on your email marketing, whether you’re just getting started or already have a plan in place please visit I’d be delighted to help you – and don’t worry there is no hard sell, just good honest advice!