- beehiiv Blog
- Posts
- 5 Customer Retention Email Examples (How To Get Recurring Revenue)
5 Customer Retention Email Examples (How To Get Recurring Revenue)
Examples & Strategies To Keep Customers Coming Back With Email
Brandon Storey
June 16th, 2024
Trying to generate recurring revenue in your business? You need to focus on retention. Why? It can cost 4-5 times as much to acquire new customers than to convert a past customer.
Dumping that much money into acquisition can be incredibly exhausting, expensive, and overwhelming on your bottom line.
Thankfully, there’s a better way.
Rather than constantly straining yourself to get new customers in the door, you can leverage the customers you already have acquired and keep them coming back? How? With email.
In this guide, we’ll break down how you can tap into retention marketing with email to increase revenue and reduce marketing spend, teaching you how to write them by showing you different examples (with simple templates) that you can use today.
Ready?
Let’s begin.
Table of Contents
TL;DR
Convincing a customer to buy again is 4-5 times more cost-effective than acquiring a new customer, making it crucial for long-term profitability and growth.
Email offers personalization, targeted messaging, and direct inbox access, making it the best channel for customer retention efforts.
Effective customer retention emails should be personalized, valuable, and aligned with the customer's interests and preferences.
Incorporate a variety of retention emails like a thank you, new product, giveaway, win-back, and loyalty email.
Why Listen to Me? I’ve generated over $1 million with email and written over 1,000 blog posts. I run Storey Time, a newsletter where I teach people how to become full-time digital writers. Feel free to reach out to me on X anytime!
The Importance of Customer Retention
The question isn’t: “How important is customer retention?”
The question is: “How painful is customer acquisition?”
Most newcomers to the business world start off by focusing entirely on customer acquisition.
Where’s your target audience, and how can you convert them into customers?
The problem is…
If you only know how to convince someone to buy once, you’ll be wasting a ton of time always trying to persuade strangers to purchase.
On the flip side, you can grow a sustainable business — and get the most out of your efforts – by focusing more on the people who have already spent money in your business.
Why Customer Retention Matters
Customer retention gives you three main things: greater customer lifetime value, more total revenue, and more time.
1. Greater Customer Lifetime Value
Customer lifetime value (CLV) is the total amount of money someone spends on your business in their time as a customer.
If your average order value is $100 but you have 0% retention, your average customer lifetime value is $100 – since you only get people to buy once.
But if you get a percentage of your customers to come back and buy again (let’s say 50% retention), the lifetime value of your customers goes up to $150. This is because 100% of your customers bought once at $100, and 50% of your customers bought a second time at $100. The result is $150 CLV.
When you can get your customers to come back a second, third, or fourth time, you increase the total spend by each customer, allowing you to make more from each customer in their life.
2. Make More Money Per Sale
There’s another benefit to focusing on your current customers: You’ll make more revenue per sale.
If you focus on increasing your customer retention by even 5%, you could see your revenue jump 25-95%! Why is that? Because customers who have a great customer experience with a company are more willing to shop there again.
Plus, if a customer enjoyed the first product, there’s less risk that the second product will be bad. The result is people who spent a lower amount on purchase number one are more likely to be willing to spend more on purchase number two at the same company.
3. Get More Time Back
When you’re able to generate more revenue per customer, you don’t need to put in as much time and energy into constantly acquiring new customers.
The result? You can step off the gas a bit. You get your time back so you can focus on other business activities or simply having more personal time to live a little, and this isn’t easy.
How You Measure Customer Lifetime Value
Curious how you measure customer lifetime value? It’s a crucial calculation to determine the true total value of your customers.
Rather than looking at your revenue from the perspective of a single purchase, you should always aim to look at the total revenue generated from customers during their time with you.
Most new business owners focus on average order value (AOV), which is simply the average revenue generated per order from your customers.
But to get a retention-focused mindset, you should focus on CLV, or customer lifetime value.
To calculate CLV, you need to first make a few preliminary calculations:
1. Average order value = total revenue / number of orders
Example: In one year, $525,000 revenue and 2,328 orders = $225.51
2. Average purchase frequency = number of purchases / number of customers
Example: In one year, 2,328 orders / 1,992 customers = 1.17
3. Customer value = average order value x average purchase frequency rate
Example: $225.51 x 1.17 = $263.84
4. Average customer lifespan = total sum of customer lifespans / total number of customers
Example: 140,528 months / 8,047 customers = 1.41 years
5. Customer lifetime value = customer value x average customer lifespan
Example: $263.84 x 1.41 = $372.01
How To Calculate Customer Retention
Customer retention isn’t the end goal. Customer loyalty is. To get there, you need to understand how to measure customer retention.
So how do you measure customer retention?
Customer retention rate (CRR) is calculated like this:
Take the total number of customers in a given time period (i.e., one year) and subtract the number of new customers you acquired that year. Then, take the result of that and divide it by the total number of initial customers at the start of the year. Finally, multiply this by 100.
Example: You start the year with 379 customers. In that year, you lose 92 customers and gain 178 new customers.
Number of customers at the start of the period = 379
Number of customers at the end of the period = 465
Formula: Customer retention rate (CRR) = [(Total customers – New customers)/Initial customers] x 100
Example: [(465 - 178) / 379] x 100 = 75% retention rate
The Role of Email in Customer Retention
So what kind of role does email play in customer retention? A major one.
Email is the king of retention in the digital marketing jungle.
Email isn’t just a powerful force for acquiring and converting leads into first-time buyers. It’s also a crucial part of retention marketing.
Why Email Matters in Customer Retention
If you want to acquire customers, email can help.
If you’re looking to retain customers, email is mandatory.
Here are a few reasons why email matters when it comes to retaining customers:
1. Email keeps your marketing budget in check.
Email is one of the most cost-effective channels. It offers the highest return on investment of any marketing channel with an ROI of about 36:1. This means that if you invest $1,000 into your email activities this year, you should expect about $36,000 in revenue back in return (on average). Pretty wild, isn’t it?
One of the reasons the ROI is so high is because email is super affordable.
beehiiv offers robust email newsletter plans from $39-$99 per month, which gives subscribers an entire suite of growth and monetization features, but you can get started on the email newsletter platform for free for up to 2,500 subscribers! This means that until you cross the 2,500 subscriber mark with your newsletter, you’ll be getting an infinite ROI.
2. Email fuels branding through attention.
Ever heard of the phrase, “Out of sight, out of mind?” Well, that’s one of the truest statements in marketing.
If you want to generate more revenue from future (and current) customers, you need to stay top of mind.
There’s no better channel to capture and keep your audience’s attention than email.
Why? Because your marketing messages don’t have a shaky algorithm like social media and search engines. Big tech like Facebook, Instagram, TikTok, and Google constantly come out with algorithm updates that make it difficult for brands and creators to reach their audience.
At any point in time, one algorithm change can mean that your marketing messages don’t get through to your people.
But with email, when you send an email newsletter out, it goes directly to your audience’s inbox. There’s no algorithm or tech overlord standing in the way. This is crucial for keeping your audience’s attention.
Whenever you want to send a marketing message, you get to reach your audience, which fuels branding, retention, and loyalty.
3. Email turns one-time customers into repeat buyers.
With email, since you don’t have any social media algorithms in the way, you get to reach your customers whenever you want. What does this mean? It means that you get to control how many touch points you get in with your audience to fuel the relationship.
You can provide massive value in a short period of time compared to other marketing methods.
And unlike social media followers or paid ad viewers, email subscribers are people who have directly opted in to receiving your marketing messages, so you can easily retain them as customers.
Thank them for their purchase, remind them of the products and services they’ve bought, and show off new products and services you offer that can provide even more value to their lives.
People who are happy with a brand don’t want to risk purchasing from a new company. It’s easier to stick with a brand they know and trust, so give them that opportunity with an email newsletter.
How To Craft Effective Customer Retention Emails
Ready to start crafting powerful emails to keep your customers coming back again and again? Keep reading to find out how. But before we do, let’s get one thing straight…
Every single email you send is a customer retention email. Read that again.
You should never think of your emails as strictly transactional. Instead, email is the best channel to build deep relationships with your subscribers and customers to ensure that they stick around for life.
Email is a retention channel, and the journey to retention starts with the very first email you send (even if they aren’t a customer yet).
What Is a Customer Retention Email?
You may be wondering, “What is a customer retention email?”
SImply put, a customer retention email is an email sent to existing customers to persuade them to purchase from your brand again.
A customer may have signed up for your newsletter after they purchased a product, or they may have joined your newsletter and then purchased a product. No matter which step they took first, at some point, they became a paying customer.
Now that you have them as a customer, it’s crucial to nurture them, provide more value, and keep them coming back as a return customer.
What To Include in a Retention Email
If you want to succeed with email, you need to master relevance. Your emails need to be relevant to the subscriber receiving it. This means that if you’re only blasting broadcast emails to your entire list, you’re doing email wrong.
You need to segment your subscribers to ensure that you’re sending the right message to the right person at the right time.
Whether you’re focused on e-commerce, coaching, newsletters, or SaaS customer retention, you should always make sure that your email content is relevant to the subscriber.
For retention emails, you’re speaking to customers.
One simple element to include is how you address your subscribers who are customers. Your emails should address the fact that they’re customers, and you should address their loyalty and support, and offer your gratitude toward them.
While they’re still a subscriber, they’ve upgraded to being a customer now; so in terms of personalization, don’t call them “subscribers.” Call them “customers” or “clients.”
But that’s just the basics of how to craft retention emails. You need to shift who you’re speaking to. Next, we’ll dive into a few examples of retention emails to give you some ideas on how to craft them yourself.
5 Customer Retention Email Examples
If you want to retain your customers for life, you need to ensure that you’re emailing them regularly.
The question is: What kind of emails should you send?
Here are some popular retention email ideas (and real-life examples) that you can save as a reference in your email swipe file:
1. Welcome Email
Your welcome email is the most important email you’ll ever send. Why? It’s the first impression your audience will get of your brand’s emails. It sets the tone for the rest of your emails, and it can make or break your ability to keep people interested in opening your emails.
A welcome email also is the email type with the highest average open rate of 47.0%! That means that 1 out of every 2 subscribers, on average, will read your welcome email.
You need to leverage the attention this email gets by kicking off your retention strategies the right way.
Here’s an awesome example of a welcome email from Smart Nonsense:
I’d put the whole welcome email here, but it’s way too long and it would probably take up half of this blog post.
Smart Nonsense does leverages storytelling exceptionally well in their welcome email. They come out with a bang, drawing readers in with a tease of what their educational comic newsletter will be like.
2. Thank You Email
The second most important email you’ll ever send is your thank you email. Its purpose is simple: to thank your new customer for their purchase. This is the first major retention email you’ll send to a brand new customer, and it’s a crucial part of turning a one-time buyer into a loyal customer.
Here’s a somewhat legendary example from CD Baby:
Derek Sivers’s thank you email from CD Baby isn’t a typical thank you email.” Rather than going the traditional, generic thank you route, he decided to lean into his creativity to give you an entertaining experience along the way to show how much he cares about the product the customer just purchased.
3. New Product Announcement Email
What is one of the best ways to convince a customer to buy again? Introduce a new product to them.
Product launches, new features, and limited edition drops are some of the best ways to bring your current customers back into your business.
Let’s face it… Some people just want to buy the new thing.
If you aren’t sure how to bring customers back, introduce a new product or service.
Here’s a great example from Magic Spoon:
Magic Spoon keeps it simple with their email here. They don’t have a ton of copy, nor do they need to. They stick to the plumbline and use something new or current (the season) to capture attention and leverage it to create limited edition cereal products:
Apple Cinnamon
Salted Caramel
Magic Spoon does a great job of showing off the products beautifully while adding urgency to promote action since the products are only available for a limited time.
4. Product Giveaway Email
Want to capture the attention of your subscribers and get them involved? One of the best ways to do this is by running a giveaway.
A giveaway will get both your non-customers and current customers to engage with your brand. It’s a way to fuel engagement and interaction, which can come in handy if you want to drive engagement or even sales.
Here’s a great example of a giveaway email by OLIPOP:
Do you notice what’s unique about this giveaway email? It’s not just a random giveaway. It’s a giveaway for a new product. And to take it even further, it’s not just any new product. It’s a collaborative product created by two companies: OLIPOP and Chubbies.
Even though OLIPOP is a soda company, they’ve partnered up with Chubbies, a men’s shorts brand, to offer something new and fun.
This kind of giveaway is a great way to keep things exciting for your subscribers and current customers, allowing them to try a brand new style of product that they may have not considered before from your brand.
Introducing a new product with a giveaway launch is one of the best and most exciting ways to release it to your audience, allowing you to fuel hype and convert customers into repeat buyers.
5. Win-Back Email
If you want to get your customer back, sometimes you have to be direct and let them know that you want them back with a win-back email.
If you notice that a particular customer or segment of subscribers hasn’t purchased anything in a while, you should send an email asking if they’d like to buy again.
Here’s a good example from GRAZA:
Graza sent out this email to any customer who hadn’t purchased in a set amount of time – maybe 60 or 90 days. Notice in their copy how they say: “How was your first taste of GRAZA?”
They’re using personalized copy here to address only first-time customers who haven’t purchased a second time yet.
Graza’s call to action is simple: Ready for a refill? Buy again. Their email showcases the olive oil in action with beautiful high-quality images with people cooking in the kitchen – a simple, yet effective, win-back email.
3 Customer Retention Email Templates
1. Thank You Email
The thank you email should come directly after someone purchases from your store.
And, no, I’m not talking about an order confirmation email. That’s also important, but that email is usually automated through your e-commerce platform.
The thank you email is different. Next to your welcome email, it’s the most important. Why? Because the moment someone purchases a product (whether online or offline), you need to reassure them of their decision. You need to let them know that they made the right choice.
Buyer’s remorse is real, whether you own a brick-and-mortar store or a small Etsy shop for jewelry online.
The moment someone buys from you, you should send them an email thanking them for their business.
Here’s an example:
“Hey [subscriber name],
It’s [your name] from [your brand name].
Thank you so much for your purchase!
We’ve got your order confirmed and are working on it now (it takes 2-3 business days to process before we ship it out).
At [brand name], my mission is to [your mission].
Nothing makes me happier than knowing I’m able to help people like you [the thing your product/service helps them achieve].
For more information on the shipping process, or for any questions about your products, check out our FAQs.
Have a great day!
-[your name]
P.S. Any questions, just hit reply to this email, and I’ll be happy to help! I offer 24/7 support.
2. Customer-Only Offer/Discount Email
Did you know that when you get someone to make a second purchase, the odds of them making a third or fourth dramatically increases?
The average first-time customer has a 27% chance of buying again. But if you can get this person to buy a second time, their odds of purchasing again increase to 45%. If you can get them to buy a third time, their odds of returning increases to 56%. See where this is going?
You should do everything in your power to get a second purchase from your customer – and do it as soon as possible. This will drastically increase your return customer rate and increase your customer lifetime value.
Here’s an example email:
“Hey [subscriber name],
It’s [your name] here.
I wanted to say thank you for your recent purchase.
It means the world to me that you’re choosing to support a small family business like mine.
As a way to say thank you, I wanted to offer you 25% off your next purchase.
The discount is available for the next 48 hours.
Here are some of our bestsellers.
Talk soon,
-[your name]
P.S. Our [new product] would go great with your [product they recently purchased].
3. Rewarding Loyalty
What is one of the best ways to keep your customers coming back? Reward them for their loyalty.
While you may choose to create a full-on loyalty program, you could also keep things simple and offer a free gift from time to time.
Make your customers feel extra special and thank them for their loyalty.
Here’s an example:
“Hey [subscriber name],
It’s [your name] here.
I just wanted to personally say thank you for being a loyal customer of [your brand name].
As a way to say thank you for your business, I wanted to treat you to your favorite drink from Starbucks with a $10 gift card. No strings attached, I just wanted to say thanks.
Anyway, reply to this email with the best email to send it to, and I’ll send it over ASAP.
Have a great day!
-[your name]
P.S. I just launched [your latest product] here, and the feedback has been amazing.
How beehiiv Keeps Your Customers Coming Back
If you want to generate sustainable revenue, you have to tap into retention marketing.
Email is one of the best retention channels you can leverage to keep your customers coming back year after year.
But without a reliable email platform, it’ll be a challenge to retain your customers. Thankfully, you can keep them coming back with beehiiv.
beehiiv is the newsletter platform built for growth.
Whether you’re looking to grow your customer base or you want to increase the number of retained customers you have, beehiiv is a powerful option.
beehiiv gives you access to:
A user-friendly newsletter editor for easy email writing
An integrated referral program to reward your loyal subscribers
Paid newsletter options with tiered subscriptions for recurring revenue
Ready to tap into retention marketing with email?
Reply