The majority of brands I see execute retention marketing do it in a way that significantly damages their profitability.
Over the course of a year, it’s no exaggeration for brands to bleed thousands - even tens or hundreds of thousands - of dollars because of their flawed approach to communicating with their customers.
All of this can be resolved by adhering to basic segmentation in the messaging hierarchy I’m about to propose below.
Why a Messaging Hierarchy for CRM communications is Important
Because most marketers are so revenue-driven, they naturally default to the most aggressive channels to generate ROI.
It is not uncommon to see D2C brands go wild with SMS messaging, in particular, due to its fast-acting nature.
However, only when you look at your Profit & Loss on a long-term basis do you see the damage this misdirected approach can do to a brand.
It’s the same with Direct Mail, which is also going through a renaissance at the moment. The ROI is exciting from a sales context, so marketers double down on the channel at the expense of a more strategic, economically efficient approach.
Not only does this add considerable expense to the cost of marketing for eCommerce stores, but it can also adversely impact the measurement of retention efforts.
There is a very easy way to resolve this issue.
Start with your most profitable retention marketing channel and work sequentially down to the least profitable.
By following this structure, you’ll also be able to construct a more effective segmentation strategy based on communicating with your customers over your most profitable channels first and least profitable channels as a last resort.
Here’s how it should work in practice:
Every time you add a new retention channel into the matrix, you can simply lay them into the messaging hierarchy based on cost per send, adding them into the segmentation strategy at each stage.
How to Apply the Messaging Hierarchy to Campaigns
Applying the messaging hierarchy to campaign broadcasts is relatively easy within Klaviyo. Here’s an example of a strategy you could create to communicate with customers for a payday promotion:
If you had no response to either of these channels, your next step would be to create a segment and retarget customers using direct mail (as noted above).
How to Apply the Messaging Hierarchy to Flows
This is a little more sophisticated and requires some basic engineering skills inside your ESP, but it is still relatively straightforward with conditional logic.
Let’s use an abandoned cart flow as an illustrative example of how the messaging hierarchy would play out in real time:
I sincerely believe marketers should invest in basic financial education and accountancy to gauge their strategies' impact more efficiently regarding the brand they operate on.
Make sure to recruit a CRM marketer who understands your business's commercial aspect and spend time educating them on the costs of adding new channels into the mix to hold them accountable to their strategy.
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