When it comes to customer retention, most ecommerce brands rely on a mix of email and SMS notifications to communicate with their buyers.
But there’s a new player in town: push notifications.
And growing your brand’s push notification base like you do your SMS and email lists is so, so valuable.
Why? Because retention is so much more than email marketing and retargeting ads or any one thing. It’s holistic, and each point of the customer journey matters.
In this article, we’ll dive deeper into how together, email, SMS, and push form a customer retention flywheel that delivers day after day. We’ll also identify why more and more companies are adding push notifications to their must-have lists and why these notifications are so good at boosting already-engaged customers’ long-term value (LTV.)
Here’s what’s in store…
- What is customer retention?
- The customer retention flywheel
- The three pillars of retention marketing
- How Obvi uses push notifications for a lower churn rate
- Why push notifications elicit the best customer response
What is customer retention?
Customer retention, also known as churn rate, measures how well a company “hangs on” to its customers over a given period. In ecommerce, high customer retention indicates that many customers continue purchasing from that brand instead of defecting to a competitor or buying nothing at all.
What does that all mean for your business’s bottom line? Well, when a company excels at retaining customers, the LTV of those customers continues to grow, offsetting the cost per acquisition (CPA) month after month and year after year.
And so, to retain customers, most ecommerce companies rely on communicating with these buyers via email, text message (SMS), and—if the brand has an app—push notifications. When appropriately deployed, these communications lower churn rate, boost LTV, and indirectly lower CPA by making those already-acquired customers increasingly valuable.
The customer retention flywheel
As previously mentioned, when email, SMS, and push notifications work together, they form a flywheel that collectively drives customer LTV higher and higher. But for that to happen, these three marketing efforts must work together. If a company focuses on only one of these communication strategies, it almost certainly leaves revenue on the table.
Ron Shah, co-founder and CEO of supplement company Obvi and co-host of Chew on This podcast, agrees.
“When you're asking someone or reminding someone to buy something again, you can't just fire up one email and then expect they're going to open it and say, ‘Oh yeah, well I need this’ and click buy, right? You kind of need to look at [the communication pillars] as an ecosystem of reminders. At the end of the day, if a customer has placed an order, it's probably a combination of all those [reminders] working together.”
Ron Shah, CEO of Obvi
The three pillars of retention marketing
While these methods of communication work best when deployed together strategically, each has its own set of benefits and drawbacks. Here’s a little bit more information about email, SMS, and push notifications as retention marketing pillars.
Email is great for ultra-engaging content and enjoys a high clickthrough rate — but only for customers you can convince to open that email. Because many customers have oversaturated email inboxes, even the catchiest subject lines are often overlooked.
Text messages also tend to enjoy high open rates, but these messages can feel impersonal and spammy. What’s more, since the latest iOS update, blocking SMS campaigns is easier than ever. SMS marketing is also expensive, doesn’t send out to all audiences at a consistent time, and can restrict a brand’s messaging (i.e., character count limitations, no emoji use.)
One Tapcart customer, VRG GRL, listed a desire to stop relying on paid SMS campaigns as a key motivator for developing an app.
Push notifications enjoy open rates comparable to SMS but can be branded and personalized with full-sized images and GIFs, just like email. And unlike SMS campaigns, push notifications are free to send, allowing brands to deliver the right message to the right audience at the right time.
Push notifications can also be automatically customized using AI push notification tools, including Tapcart’s TapAI feature.
How Obvi uses push notifications for a lower churn rate
Obvi — the previously-mentioned Tapcart customer known for its playful, top-quality supplements — is a big believer in push notifications, too. In fact, one of the key reasons Obvi decided to invest in an app was to offset high CPAs with better customer retention.
Obvi’s CEO, Ron, believes there are four pillars for communicating with customers: community, email, SMS, and push notifications. And while Ron is clear that each pillar has its own purpose, there are three things Obvi relies on push notifications to communicate to customers every single day. They are:
1. Brand-building, value-aligning messaging
Obvi is a big player in the health and wellness space, so the company often uses push notifications to cheer its app customers on without trying to sell a single thing. These messages are often as simple as reminding customers to drink water or go for a walk.
2. Revenue-generating offers
Unlike the above type of push notification, this next type of message aims to elicit a purchase. Customers receive notifications on their home screens regarding flash sales, deals of the day, promotions, gifts, and more. These notifications can be part of a months-long strategy or be released last minute on a day when sales are dragging.
“If we're having a rough day on Shopify and the ads have been tricky, then boom, we can just send [a push notification] and get what we need,” said Ron.
Ron also noted that the Obvi team can segment offers to different audiences, allowing for a creative, strategic marketing strategy. If one batch of customers hasn’t made a purchase in a while, that group may receive one type of offer, whereas more active customers might receive another.
Best of all, these efforts can be measured and analyzed, giving Obvi’s team the information needed to make better business decisions every day.
3. New product launches
Finally, Obvi uses push notifications to launch products, offering app customers first dibs on new releases.
“It's something that is probably more intrusive than a text message or an email, which is great because you're able to get customers’ attention right away,” said Ron.
Why push notifications elicit the best customer response
Because push notifications combine the best features and benefits of email and SMS marketing, it’s no wonder more and more companies are developing apps and growing their push notification base.
In fact, when our 2022 BFCM survey evaluated what drove direct-response purchases among consumers during peak season, data showed that push notifications out-performed:
- Email by 177% (Push was 177% more likely to elicit a purchase than email.)
- Digital ads by 159% (Push was 159% more likely to elicit a purchase than ads.)
- SMS by 78% (Push was 78% more likely to elicit a purchase than SMS.)
For brands on the fence about whether an app is worth the investment, consider this: an app with push notifications will not only bring your customers back with 3 to 4x the frequency of any other channel but will also unlock 2.5x more revenue from your already loyal customers.
“If someone told you you're going to go to war, and you have a choice between having three weapons or four, why would you ever choose three? The more tools you have to communicate with your customer, the better.”
“We know that [app customers] have a higher appetite to consume the brand on a more frequent basis where consumers for the site or subscribers to email and SMS, they may be a little bit more fickle. Consumers that have downloaded our app are committed. They're less fickle than the ones that we acquire in other ways.”
Julie Chalker, Director of Digital & eCommerce of BÉIS
What’s more, push notifications are free to send to those “inherently VIP” app customers, making this type of communication not just wildly effective but highly profitable.
“It's almost like it's the strongest weapon in our arsenal,” Ron said, “because if one day we had to cut every cost, the one thing we will never cut is push notifications.”
Want to learn more about how to strengthen your push notification strategy? Explore our library of real-world designs from top Shopify brands who use Tapcart to power their mobile shopping apps.