Brands

How Loyal Are Your Customers? This Metric Has the Answer

By Ray Cheng August 18th, 2015

When I was 14, my parents, who owned a Chinese restaurant, realized that many of their hard-earned customers were starting to frequent a new competitor. To see if I could make a difference, I tried a tactic that would become very familiar to me later on in life: I launched my first direct mail campaign.

I took out my typewriter (it was the early ’90s) and an American Express Travel memo pad that contained the addresses of all the devoted customers we sent food deliveries to over the years. I wrote personal letters to each, thanking them for the patronage over the years and hoping to see them again when the fireworks and bright lights of that new place dimmed.

Sure enough, those customers came back, one by one. I was hooked on marketing, and from then on, I truly understood the impact loyalty could have on a business.

A few years later, loyalty is one of the most important concepts in content marketing. I hear a number of buzzwords that describe how to build and maintain a following: customer journey management, brand loyalty, customer retention, lifetime value. Getting customers to keep coming back is about more than just a reliable product or service; as I found out as a teenager, it’s also about great content. And tracking how your content impacts customer retention is one of the smartest ways for you to monitor the health of your company.

Why returning visitors are the best visitors

There may not be a concrete standard, but estimates generally claim that it costs at least five times more to acquire a new customer than retain an existing one, which is very important since these returning customers may have a significant ability to attract new customers for you. According to a 2007 article in the Harvard Business Review, marketers who leverage their returning customers to drive acquisition efforts can see an ROI of up to 15x, compared to only 4–6x ROI for traditional acquisition campaigns.

One of the key building blocks to customer loyalty and retention is how you approach audience engagement. The most common offline and online engagement channels are customer service departments, sales representatives, email, social accounts, and websites.

Your website is generally the most potent channel because it’s flexible, visual, and dynamic enough to simultaneously serve different audiences in real time. It often serves as the gravitational center for all other channels. How many times have you read something like, “Do you want more information? Please go to our website.”

If you can attract more people to your website and get more people to come back, then you’ll have a higher brand value and more long-term revenue tied back to your marketing efforts.

Of course, getting there isn’t just a simple proposition. And that’s why tracking your return visitor rate (RVR) is so important.

What is RVR, and why should you care about it?

RVR is a metric that measures the rate of return visitors to your website. It’ll often be a good indicator of whether your marketing communications and content marketing programs are healthy.

To calculate RVR, you just have to divide the number of return visitors to your website by the number of total unique visitors for a given period of time. In July, if you had 10,000 total visitors and 3,000 were repeat visitors, your RVR is 30 percent (3000/10,000 = .30).

Though there aren’t really comprehensive benchmarks out there on the ideal RVR, we generally believe that if your rate is under 25 percent, your content strategy probably needs some refreshing. If your RVR hits 30 percent, you’re publishing engaging content. And if your RVR is over 50 percent, your content game is excellent, but it also means you have an opportunity to invest more dollars in paid distribution (Facebook, Outbrain, etc.) and put more of an emphasis on attracting new users. As a point of reference, for companies in eCommerce (which rely primarily on their websites to grow their business), RVRs tend to range from 25 to 50 percent, per Clicktale.

At Contently, our RVR is about 40 percent (driven primarily by The Content Strategist), ranging between 32 percent and 43 percent depending on the month.

RVR is the thermometer of audience loyalty, which, in turn, builds short-term marketing value through more email subscribers and website leads as well as long-term value through purchases, repurchases, referrals, and share of voice. Basically, the better the ratio, the easier it’ll be for you to show you’re driving real results for your company when you ask for a bigger marketing budget.

What can you do to improve your RVR?

Adept marketers are now thinking about better leveraging the retention side of the house. They are thinking of each visitor as a guest, and these guests are treated more as a multi-step relationship rather than a point-in-time transaction. The guest continues to return to this house because the owners are friendly, attentive, engaging, and informative in a relevant way. The guest eventually falls in love with the company and becomes a customer for life. And content marketing becomes a core retention strategy:

The great thing about RVR is that the metric is easily accessible, understood, and actionable for most marketers. By referencing Google Analytics each month, you can see how your content influences your RVR. I’d recommend spending some time reviewing your most popular URLs, the content formats these pages offer, content topics that have resonated during this time period, the average time spent on your site with these pages, and shares counts and comments.

With these data points, you can build a good 3- to 6-month calendar of content ideas that should be published consistently and frequently. Keep in mind that this is your relationship-building content, not your promotional content.

Next, figure out how you are going to distribute this content through social media, affiliate marketing, content recommendations, and your email subscriber list. Email is often the most effective way of improving RVR. It not only serves as a great reminder that you have new, interesting things to say, but also helps serve as a potential “forwarding” vehicle to new audiences that your acquisition dollars can’t reach. For more on that, check out my previous post on importance of the email conversion ratio (ECR).

At Contently, 16 percent of our own visitor traffic comes from email subscribers. This number may not sound significant, but remember that the vast majority of this audience wants to develop a stronger relationship with us. Without this channel, the loyalty value would be far lower if we had to rely solely on a reader bookmarking this site (in a digital closet full of other bookmarks).

Your first impression matters most, but your second impression and subsequent ones need to be just as sharp to keep them coming back. Your email newsletter is the surest way to get audiences hooked because of its consistency.

Lastly, there are a few overlooked but useful RVR stimulants: retargeting, paid social, and referral traffic partners (who recognize and need good content to share), all cut through the noise and help you build up those lasting relationships with customers.

How does attention time factor in?

When I think back on my days as a restaurant marketer, I couldn’t really measure how much time someone spent with my typewritten letter. But in the digital marketing realm, if readers are going to give you more of their precious time and engage with your brand, you can track and take that data to your CMO to show the importance of these loyal customers.

Forward-thinking executives at companies like Chartbeat and Twitter have been pushing for all publishers to monitor reader attention, and now that smart marketers have listened, we’re starting to see how emphasizing attention time can really make a difference on building (and keeping) an audience.

Over the first half of 2015, for example, return visitors on TCS viewed 300 percent more pages per session and logged 61 percent more attention time per session than one-time visitors.

Most importantly, once you start focusing on nurturing these relationships with your loyal readers, the ROI will follow. Take our top-performing article this year, a Q&A with Seth Godin, which has been read by over 56,000 people and generated 18,000 social actions. This one article alone has helped generate an incredible 215 new marketing-qualified leads for our sales team. Let that be a cliffhanger for the next piece on another magic content marketing ratio: lead conversion rate (LCR).

If you have any questions or comments on RVR, please reach out to me on Twitter @ray_jing.

Image by Ollyy
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