Ask Phill & Friends with Klaviyo

The recipe for retention success

The recipe for retention success

Alexine Maurin

5 minute read05 Jun 2024

Everyone is talking about customer retention these days, and it's no surprise. In an age where consumer attention is fleeting and competition is fierce, the real game-changer lies in how well you can retain your existing customers.

Recently, we hosted the "Ask Phill and Friends with Klaviyo - Smarter retention tactics" event, and it became clear that some businesses are only scratching the surface when it comes to leveraging available tools for retention. Here’s our take: if you’re not integrating Klaviyo’s advanced features, SMS marketing, and first-party data, you’re missing out on a powerful triad that could transform your retention strategy.

Here are the most valuable insights we gathered that you can apply to your business.

Klaviyo: the undervalued powerhouse

Many businesses use Klaviyo for basic email marketing, but its potential extends far beyond that. In the session "Discover the 10 things you didn't know you could do with Klaviyo," with Ieva Stuikyte, our own Klaviyo consultancy lead, several advanced strategies were unveiled that can significantly enhance customer engagement and retention. Here is a sum up of all the strategies or tips you can use with Klaviyo to make a real difference or to optimize your use of Klaviyo.

Browse abandonment flow:

Re-engage shoppers who didn’t complete their purchases by showing relevant product alternatives, particularly useful for businesses with a high number of SKUs. You can also use this flow to address any questions customers might have before completing their purchase. Or, for example, for luxury items, where customers need more time to decide, you can send emails highlighting more benefits about the items that grabbed their attention.

Split abandoned cart and checkout flows by value:

Personalize customer experiences with pre-built templates for high-value versus low-value cart reminders, improving conversion rates.

From email to discounted cart in one click:

If you share a promo code in the email body but don't include a discount code directly in the button link, it can take a customer another 3-4 clicks to apply a discount code. This might result in a higher drop-off rate. With Klaviyo-generated coupon link structure or Shopify's cart permalink, you can include a discount code directly into a CTA button of your email. Imagine giving an extra incentive in your abandoned checkout email and customers going directly into their cart with a discount code applied in just one click from the email.

Adding a form after checkout:

Implement a Klaviyo embedded form on the Shopify Order Confirmation page to quickly gather more first-party data.

Celebratory flows:  

Your customer's inbox is already overflowing with happy birthday messages, so try using alternative celebratory events to stand out from the crowd. Have you considered congratulating a customer on their half-birthday or celebrating their first purchase anniversary? These automated flows triggered by specific dates can help keep customers engaged and turn them into loyal brand ambassadors.

“Faux loyalty”automation:

Reward customers based on their total spending using conditional splits in the automation flow. Offer bigger incentives to higher spenders, providing the benefits of a loyalty program without the high costs, leveraging Klaviyo’s automated flows and logic.

Maintain clean lists with a sunset flow:

A sunset flow re-engages inactive subscribers by sending a series of emails over a set period. Subscribers who remain unresponsive are then removed, improving email deliverability and reducing costs. This ensures your marketing targets an active, engaged audience.

Mobile-first design:

Design emails with narrow widths to ensure they are mobile-friendly, accommodating the majority of recipients who open emails on mobile devices.

Integrate with advertising platforms:

Enhance engagement by using Klaviyo’s integration capabilities to retarget customers more effectively. 

Predictive analytics for purchase flows:

Utilize predictive analytics to determine the expected next order date of your customers. tailoring marketing efforts accordingly.

SMS Marketing and AI: the untapped goldmine

The session " SMS Marketing Strategy & AI with Klaviyo" underscored the transformative power of AI in enhancing marketing strategies and the unique benefits of SMS marketing. Here’s what we learned about leveraging these tools for better customer retention:

AI in ecommerce today:

consumers demand personalization. With AI, brands can offer the customized experiences customers crave. AI features in marketing includes:

  • Predictive AI: anticipates consumer behavior, aiding in smarter decision-making.
  • Generative AI: speeds up email creation, boosting productivity.
  • Autonomous AI: improves revenue performance, letting you focus on strategy

AI is transforming the marketing landscape. Not only can AI perform tasks that previously took hours to do manually, like analyzing data and creating content, it can help you win more customers and drive revenue. Predictive AI revolutionized marketing by analyzing vast amounts of data to anticipate consumer behavior and preferences. Then came generative AI, which took this a step further by speeding up the content creation process. Instead of simply predicting outcomes, AI created entirely new content for marketers. Generative AI enabled teams to focus less on manual tasks and more on strategy and creativity. Now, a new stage of AI is emerging: autonomous AI. This does more than just make messages more personal and save time – it’s self-optimizing marketing that runs on autopilot.

Recognizing the significance of AI for their users and customers, Klaviyo has recently released Klaviyo AI, enabling brands and agencies to leverage smarter digital relationships while the platform does the heavy lifting. 

Discover more about  Klaviyo AI by watching the introduction video below.

Klaviyo AI features:

Klaviyo AI offers smarter insights, work, decisions, and results, automating and optimizing marketing efforts:

  • Forms display optimization: AI tests multiple form versions to find the highest-converting display times, ensuring maximum customer engagement. Brands using this feature see an average 5% increase in list growth. It's like having a GPS for web forms, constantly optimizing for the best results without the need for manual A/B testing.

  • Segments AI: Build segments using plain English, preview segments before publishing, and use these segments for targeted campaigns or triggered flows. This feature simplifies the process, making it easier to create precise audience segments quickly.

  • Email AI: Generate email content swiftly by providing simple descriptions. AI creates multiple variations using your brand’s fonts and colors. This tool helps brainstorm design ideas, overcome creative blocks, and create content aligned with campaign goals.

  • Predictive analytics: Provides insights into customer lifetime value, number of orders, churn risk, and expected date of next order. This feature has been available for some time for Shopify stores but is now rolled out to all accounts. It helps target at-risk customers, build loyalty with high-value customers, and optimize marketing efforts based on predicted customer behavior.

Integrating SMS marketing:

SMS marketing offers higher engagement rates, instant reach, and complements email strategies. Klaviyo’s integration capabilities make it easy to incorporate SMS into your marketing strategy. Brands like Every Man Jack and Tatti Lashes highlight significant revenue and engagement improvements from integrating SMS marketing.

Benefits of SMS marketing:

  • Higher engagement rates than email, with 5.6x higher clicks and 1.4x higher conversions.
  • Instant reach and ability to cut through inbox saturation.
  • Builds personal relationships and enhances email strategies.
  • Provides a direct, first-party relationship with customers.

European consumer SMS sentiment:

  • Most consumers are subscribed to SMS marketing from only 2-3 brands.
  • 37% are willing to receive a text at least once per week.
  • 77% have made a purchase after receiving a text from a brand.

Effective SMS campaigns:

  • Abandoned cart reminders, time-sensitive promotions, early access campaigns, location-based updates, order and shipping updates, customer feedback requests, renewal reminders, and channel-exclusive deals.
  • Writing copy that converts: keep it short, snappy, and directly related to the CTA. Stay on brand, use personalization tools, and consider using emojis to add a splash of color.
  • By leveraging these advanced features and integrating SMS and AI into your marketing efforts, you can enhance personalization, improve engagement, and drive better results.

First-party data: the ethical advantage

Privacy changes have underscored the necessity of first-party data for ecommerces. With evolving regulations and user expectations, collecting data directly from customers has become essential.

Consumers are now more privacy-conscious, with 48% stopping purchases due to privacy concerns. First-party data, collected directly from interactions, is more trustworthy and transparent, giving consumers control over their data and meeting privacy expectations.

First-party data enhances personalization, crucial as consumers seek tailored experiences. Brands are increasingly using innovative methods to capture this valuable data. Here are some effective strategies:

  • Membership programs: For example, Salomon offers a base-level membership providing benefits like free shipping, incentivizing customers to share personal information right from the landing page to checkout.
  • Account sign-ups: J. Lindberg emphasizes clear benefits for account sign-ups, asking users for interests and sizing preferences, which then personalize CRM communications and on-site experiences.
  • Post-purchase surveys and polls: Brands can gather rich data through surveys and polls after a purchase or return, providing insights into customer preferences and behaviors.
  • Exclusive access and incentives: Nike offers a members-only catalog, giving access to certain products, while Kith and On-Running use similar strategies to incentivize account setup and data sharing.
  • Interactive tools: Salomon's shoe finding functionality collects data through a subtle set of options, helping track customer preferences cleanly and efficiently.

First-party data also fuels machine learning and AI, enhancing predictive analytics and audience targeting. By uploading first-party lists into platforms like Google Ads, brands can optimize marketing strategies, acquiring new customers and re-engaging lapsed ones.

Deploying first-party data strategies maximizes marketing performance, ensures compliance with privacy regulations, and builds stronger customer relationships. As privacy concerns grow, robust first-party data collection is vital for maintaining customer trust and driving business growth.

Synergy: creating a cohesive strategy

The real power lies in the integration of these three elements. Klaviyo’s advanced functionalities, when combined with the immediacy of SMS marketing and the precision of AI, create a highly effective CRM strategy. Adding first-party data into the mix ensures that your approach is both ethical and personalized.

Businesses that integrate these tools will find themselves at a significant advantage. This cohesive strategy allows for a more comprehensive understanding of customer needs and behaviors, leading to more effective and sustainable retention efforts.

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