Retention Marketing for D2C Brands - Using Insights and Data to Drive Business Growth
Updated: May 3, 2021
To have a robust consumer retention strategy, brands need to look at a consumer behaviour out approach while using the available purchase data to form testable hypotheses. These hypotheses can be turned into marketing campaigns to be run on digital platforms.
It’s a cyclical process where consumer data, category insights and testing leads to further growth.
Consumer Data (Purchase Behaviour, Cohorts*) <> Category Insights <> Testing
The starting point is a deep understanding of the product category and it’s competitive landscape. Brands need to answer the following questions:
What is the likely frequency of purchase for it’s product category? E.x. In most Indian households tea is consumer everyday which makes it a monthly basket purchase, further segmentation among tea users can be done basis heavy, medium and light users
Is the category habit based or is it variety seeking? E.x. fashion is a highly experimental category among youth which leads to higher brand trials
What role can offers and promotions play in the category and what are the different kinds of promotions that can perform - price off, freebies, free goods, discounts on future purchases? E.x. Subscription services can offer discounts on future purchases as a way to retain customers
How is the brand positioned w.r.t to competition? Does it offer benefits to its consumers that can potentially lead to stickiness?
Answering a few of these questions will help brands create hypotheses which overlaid with purchase behavior data will create executable marketing campaigns.
Case Study (the brand along with data is fictitious)
Take a growth stage brand within the Tea Category that has a large portfolio of teas to offer it’s consumers. Since the brand is at a growth stage, most of the advertising is focused around new consumer acquisition. The lead product in the portfolio is its Tea A. Looking at the purchase data for this brand we see the following trends (Last 12 months)
60% of consumers make 1 purchase
30% of consumers who buy Tea A make a 2nd purchase of Tea A
15% bought with a price off
5% bought without any further promotion
10% who bought a 2nd pack which was different from the 1st purchase
5% bought Match Tea
5% bought Darjeeling Tea
Topline read of the data - 40% of trialists re-engage with brand. Most of the engagement with the same product purchased.
Given that the brand is at a growth stage and wants to focus most of its efforts on new consumer acquisition, at this stage we can ignore the 10% of consumers who are looking at portfolio purchase (a separate strategy for these users can be considered at a later stage)
At the moment the following questions should be asked
Why are 60% of consumers not buying a 2nd pack? Some hypothesis are
Did not like product experience (not actionable at the moment)
Wants variety so bought competition
Price too high to make it a regular purchase
Right offers are not communicated
Consumers don’t understand long term benefits of regular consumption
Tried once but forgot after that as there was no communication from the brand
Among the 30% of repeat buyers
Which type of communication is giving maximum results? Offer, loyalty, subscription, cross selling, upselling with bigger/value packs etc.
What do we understand about the 3 consumer cohorts?
Repeaters with offers
Repeaters without offers
Repeaters basis product/category
(Consumer Cohorts - Typically #d2cbrands only capture shipping information. There are tools and techniques available where we can use these consumer lists to generate insights. For more on this write to us at https://www.ensobusinessconsulting.com/contact
The hypothesis developed should be translated to marketing campaigns on different digital platforms like email, google, Facebook, Instagram, Watsapp,Messaging, etc. within multiple creatives that can be AB tested.
Using results from activated campaigns and further buying data, an iterative loop of retention campaigns can be created.
Get in touch with us at https://www.ensobusinessconsulting.com/contact to discuss how retention campaigns can help unlock profitable growth for your D2C business.’