How to Build Email Campaigns That Drive Retention And Loyalty

Customer churn costs US businesses $136 billion a year. 

The good news is that you can keep your customers, reduce churn, and ensure your SaaS business’s long-term success with the help of email marketing and automation. 

If you’re also struggling with low product adoption and finding it costly to acquire new customers, you need a strategy that encourages ongoing product usage that turns occasional users into consistent, engaged customers.

That’s where our 13 proven email marketing strategies come in. They’re designed to increase product adoption, foster consistent usage, and ultimately improve customer retention for your SaaS business. 

Let’s get right to it!

What is customer retention, and how do emails drive retention?

Customer retention means to engage your users until they become long-term users of your services. It creates new opportunities to upsell your services and increase your average customer lifetime value.

Email marketing is crucial here as it reduces churn and fosters ongoing engagement and usage with regular communication and feedback. 

SaaS companies typically have a churn rate between 10% and 14%. Strategic email marketing lowers this number as it maintains and enhances customer relationships.

How is customer retention different from customer acquisition?

Customer retention and acquisition target two different user types: existing and new users, respectively. 

Retaining an existing SaaS user costs you 5x less than acquiring a new one. Plus, the benefits of customer retention stretch over a long period, compared to customer acquisition, which is primarily focused on acquiring the customer.

Here’s why acquiring new users is costlier for SaaS businesses:

• It takes SaaS businesses 1-5 years to start seeing profit from newly acquired users. Comparatively, you can earn 25%-95% more profit from your existing customer base if you increase customer retention by 5%.
• Customer retention depends on existing customer data, making creating targeted and personalized campaigns easier. However, when acquiring new users, much of this data won’t be readily available.
• You’ll have to handhold new customers who are unaware of your software. Taking them from the point of awareness to the last stage of the funnel requires a lot more resources.
• A simple yet effective email marketing campaign can increase retention. However, you need to invest in multiple channels and marketing and advertising avenues, including social media, PPC, and partnerships, for customer acquisition.
• Your existing users are more likely to trust you based on your product’s ease of use, great customer support and service, or product. Alternatively, it takes a lot more effort and persuasion for new users to build that trust.

The average retention rate for SaaS companies is 92%-97%. If your retention rate is below that, keep reading to find out how you can increase it with a lower churn rate via email marketing.

Top 13 email marketing strategies to drive retention and loyalty

As you go through each strategy, pay close attention to what resonates with your goals the closest and what strategy you already have resources for so you can start with those.

1. Nurture leads & increase customer lifetime value with personalized sequences

Personalized emails have 29% better open rates and 10% better conversion rates.

They help SaaS companies build stronger relationships with existing users, directly impacting retention.

You can guarantee your email’s relevance and value when you send tailored email sequences at each customer journey stage. With this, you can reduce the risk of them leaving you for a competitor. This, in turn, increases the overall value you get from each customer over their lifetime.

Here’s what you need to do:

• Use data-driven insights to create targeted lead segments based on behavior, demographics, firmographics, or past interactions, ensuring your emails resonate with each user’s specific needs.
• Personalize your emails by automatically inserting relevant content like product recommendations or offers based on past customer behavior. For example, you can recommend similar services to your users based on their search history on your website or social media platforms. You can achieve this with dynamic merge tags and if/else content.
• Use phrases like “Based on your interests” or “Just for you” to make your emails feel more exclusive and reinforce the personal connection with your users.
• Use the right tools to test your emails, like Encharge’s A/B testing feature, and refine your email copy. Then, identify which versions are most effective at keeping users engaged and reducing churn.

Slack is a perfect example of a brand that knows how to personalize emails. They create personalized experiences with custom onboarding emails to guide new users through their platform’s features based on their specific needs.

Slack’s email sequences include tailored recommendations that highlight relevant features according to their user’s role or industry, which ensures their users quickly see value in their platform and are more likely to continue using it — thus reducing churn.

2. Recommend plan upgrades based on user behavior and triggers

Over the past seven years, the SaaS industry has grown by 500%. This shows how critical it is for SaaS businesses to continuously evolve and improve their product offerings. 

Software updates that prioritize user feedback enhance security and improve flexibility and usability, automatically boosting user retention. Keep your users in the loop about updates through personalized emails that are sent based on their behavior. This can help increase conversions and encourage users to adopt the new updates faster.

Here’s what you need to do:

• Gather specific data from support tickets, analytics, surveys, feedback, and user profiles.
• Segment your customer base based on their industry, language, location, device type, update channel and frequency, and product version. Plus, retain data from here to understand how your existing customers interact with your product.
• Define and update your goals and select metrics to measure your performance. For example, you can improve your product by adding better features to make it easier to use, enhance its performance, and increase its security. You can determine the success of these updates by looking at the revenue, customer satisfaction, customer retention, and update adoption rate.
• Use Encharge to create a default retention rule and triggers for automated personalized emails based on user behavior and preferences that persuade, educate, and inform your readers about your most recent update. Your messaging should be compelling, clear, and concise.
• Highlight any incentives, urgency, or benefits of the software update or address user feedback, questions, or concerns in your email.
• User our marketing automation platform to collect and analyze comments, reviews, and ratings to improve your update strategy.

Asana accurately exemplifies what your email upgrade recommendations should include. 

They use surprises and teasers to create excitement surrounding an upcoming update. Plus, their product emails include cues suggesting they integrated customer feedback into their upgrades.

3. Introduce feature bundles for different user needs

Bundling your products and services increases your conversion rate by 7.09% and revenue per user by 6.9%. Plus, if you offer a good deal to your users in a product/service bundle, they’ll come back to see what else you have to offer.

For this, you’ll have to bundle products and services that your users typically use together or are popular among certain segments. Then, offer a discount so the combined price of the bundle is lower than what it would cost your customers to pay for all of them individually.

However, your bundles should not combine your high-selling products and services with low-value items. If you do this, your customers will perceive your high-selling products as low value.

Here’s what you need to do:

• Pick a bundling type, like mixed bundling, pure bundling, or price bundling, that suits your overall business goals and your customers’ needs and buying factors.
• Segment your customers into different buyer personas based on common needs and create varying bundle offers for different segments. Go to your People’s page on Encharge to create these segments. Your bundles should include a must-have anchor product that solves a single primary pain point.
• Incentivize a bundle order with free product trials, service credits, or percentage discounts, and consider adding a multi-tiered subscription offer.
• Create automated emails that clearly highlight discounts and savings with strategic pricing and cross-selling techniques. Also, clearly define what your bundles include with illustrations and use cases.

Look at this multi-tiered bundle offered by Zendesk. You can take inspiration from this and your main competitors to create a bundle that suits your target audience’s needs to increase your retention rate.

If you’re looking for a bigger impact, let your users customize their bundle based on the features they value the most. This gives them the freedom to create and choose a bundle according to their needs and turn them into long-term users.

4. Reward long-term users with exclusive perks

You can win over 56% of users with this retention strategy. These structured customer loyalty programs reward pre-defined customer interactions and behaviors to increase engagement and make sure your customers remain loyal to your brand.

Your loyalty programs decrease the value of products and offers from your competitors. Plus, they encourage participation from users who willingly share demographics, behavior, and preferences information. 

Here’s what you need to do:

• Make your rewards and loyalty program easy to understand with transparent rules. Also, offer your users a clear value proposition for this program so your customers remain loyal for a long period.
• Evaluate your existing users’ preferences and needs and make sure you offer perks that align well with them.
• Give them numerous opportunities to earn exclusive perks and personalize your customer communication according to each user segment.
• Send them daily or weekly automated emails with a custom retention rule using Encharge. These should contain progress reports and updates to keep your participants engaged.
• Integrate it within your SaaS platform and make it easier for them to redeem their benefits and check their rewards status.

Grammarly is a great example of how to do reward emails right. They promote their loyalty program with weekly updates and discounts for their Premium subscription package. They use gamification to encourage increased product usage, too.

Also, their weekly updates include informational pieces regarding famous writers. This motivates their users to continue writing and using their platform to spell-check their content.

5. Gather and share positive customer feedback

Gathering and sharing positive customer feedback, either monthly or quarterly, using custom retention rules will increase your product usage and adoption by 72%. You can analyze these reviews to improve your products or offer great customer support to ultimately retain customers.

This strategy leverages positive feedback and customer success to highlight your products and services’ most loved features. It’s a great resource to tell your users what makes your products valuable and encourages continued use. 

The following types of customer reviews can build rapport and trust with your users, similar to how businesses in the residential service industry make their customers feel heard and valued. They highlight those that give potential users a glimpse of their future interactions and the work quality they can deliver, hinting at the level of customer satisfaction customers can get from working with them. 

Here’s what you need to do:

• Feature your most popular product of the month/quarter in a content block and place its customer reviews to build trust.
• Gather and display video testimonials with Encharge in your emails to add emotional depth and a human element to your emails.
• Share customer success stories to highlight how much you value your users and their experiences and want to keep customers happy in the long run. 
• Send reminders to your previous users related to re-subscription or subscription renewal and attach reviews to remind them what they’re missing out on.
• Gather and share user-generated content (UGC) for social proof and brand credibility. You can also use UGC campaigns to create engagement and build a community around your brand.

Here’s how Calm naturally integrates user feedback into its emails. Instead of making the review the highlight of the email, they place it at the very bottom. Despite its placement, the review persuades the reader to adopt the product.

Also, notice how their CTA button, which takes the readers to the actual testimonial, highlights creativity. They used “Get Inspired” instead of using a generic CTA like “Read Testimonial. This makes the brand sound more transformational and exciting. Fame offers a great resource to find creativity if you ever feel stuck on this end.

6. Educate customers with a course

You can increase customer retention by 56% with an educational course or program for your users. It empowers them and helps them understand the full potential of your software. Consequently, educational programs reduce churn and drive retention.

When you educate your customers on how to use your platform, they engage more deeply and are less likely to look for alternatives. This leads to long-term loyalty.

Here’s what you need to do:

• Create in-depth tutorials or webinars that cover basic and advanced product features.
• Set up automated email sequences that deliver educational content to users based on their engagement and usage level.
• Offer certification programs or courses to help users master your platform and stay engaged.

Ahrefs posts countless educational blogs to help its customers learn about the various features of their tool. They also offer multiple courses covering link-building and SEO strategies. 

Ahrefs Academy has hours of training videos covering all these topics. Their academy is particularly attractive to students who want to become Ahrefs-certified consultants. Anyone who completes a course is more likely to become a long-term paid user in the future.

7. Maintain an email list and customer communication calendar

86% of your existing users expect seamless communication across multiple channels. A well-maintained email list and communication calendar help you live up to this expectation as they make sure your customers consistently receive relevant and timely messages.

These organized communication strategies nurture relationships and make your business memorable for your audiences, reducing the likelihood of churn. Regular communication also builds familiarity and trust.

Here’s what you need to do:

• Regularly clean your email list to remove inactive subscribers and improve open rates.
• Segment your list based on customer behavior and interaction to ensure personalization.
• Use a communication calendar to plan and schedule consistent, targeted emails that align with product updates or user milestones. If you are sending cold emails as a part of your communication strategy, now you must also consider and comply with Google and Yahoo’s email restrictions about how many emails businesses can send daily from the same email domain.

For SaaS companies, HubSpot’s email marketing planning template is perfect for planning and tracking your emails. This advanced template organizes emails into segments, tracks your A/B tests, and summarizes advanced results.

Use this template and customize it according to your organizational needs.

8. Create compelling call-to-action (CTAs)

A single, strategically placed, and clear CTA in your email can increase your sales by 1,617% and clicks by over 371%. However, placing more than 3 CTAs in a single email can do more harm than good.

A strong CTA will motivate your users to be more interested in your services or brand. Use these to tell your customers what action you’re expecting out of a particular engagement with them and encourage them to explore more about your brand, products, or services.

Here’s what you need to do:

• Create a clickable CTA and prominently display it in your email.
• Use a minimum of 1 and a maximum of 3 easy-to-understand CTAs with action-oriented language to make your email copy effective.
• Place your CTA either at the very end of the email or the beginning so it’s easier for your users to find it.
• Offer incentives such as limited-time offers or discounts to encourage your users to click on the CTA.
• Draw your users’ attention and encourage them to click on your CTAs with the help of colors that contrast with the rest of your email.

Here’s a great example of email CTA usage from Tripadvisor. The image and subject line here are highly relevant and unique, increasing readability.

Image Source

The black on green makes the CTA button stand out, and the white font adds to its readability. Plus, it uses creative, encouraging language and clearly highlights the purpose of the email.

9. Engage your audience with interactive content

You can engage 60% of your email recipients with an interactive element in your email. This can be something as simple as clickable images and graphics or polls and CTA buttons. Interactive elements keep your users engaged and make it easier for them to take your desired action.

These emails encourage participation and action from your users and typically include playing, swiping, or tapping on specific objects or elements in your emails. Consequently, you’ll see a boost in customer retention and acquisition. 

Here’s what you need to do:

• Give them the option to toggle between your product or service varieties and an “add to cart” option directly in the email so they can be directed straight to the payment page.
• Create and send polls with the option for your users to go back to the email to see live poll results.
• Add videos to your emails, and remember to include a thumbnail fallback for non-supported clients. 
• Use image carousels with buttons on either side for easy navigation.

Look at the following interactive email example from Wistia, which includes a video with a fallback thumbnail fallback.

10. Optimize your subject lines

Your email open rate can increase to 47% if you add a strong subject line. A well-crafted subject line draws attention, sparks curiosity, and prompts customers to take action. This plays a key role in reducing churn.

Here’s what you need to do:

• Keep subject lines under 50 characters to ensure they are fully displayed on mobile devices.
• Incorporate the recipient’s name or reference their recent interactions with your platform to personalize your subject lines.
• Test subject lines using A/B testing to find what resonates best with your audience.

Take inspiration from the following subject lines that Userlist created to turn the boring chore of checking emails into a more creative and humorous one. 

Their emails entice users with humor using subject lines similar to episode names from the popular 90’s sitcom Friends. 

11. Clearly communicate your product value

If your net revenue churn is 2% higher each month, there’s a problem within your organization that you must address promptly.

If your customers don’t understand your value proposition or how your product solves their problems, they will leave. This is why you should communicate your product’s value and help users understand how your software can make their lives or workflows easier.

Here’s what you need to do:

• Focus on how your product addresses customer pain points and improves their workflows.
• Highlight key features and benefits that differentiate your product from competitors.
• Use case studies and success stories in emails to demonstrate real-world value.

Zoom communicates its product value by constantly emphasizing its ease of use and ability to connect with people during the pandemic. Their email campaigns and communication focus on how the platform solves the need for seamless virtual meetings, helping users stay connected during isolation.

Zoom’s consistent communication of value played a key role in retaining and expanding its user base. 

12. Own your mistakes in win-back emails

53% of your users expect to hear back from you within a week after they send negative feedback. So, use this as an opportunity to highlight how much you value your customers.

The first step to make your customers feel heard as soon as you receive their feedback is through a thank you email or prompt. It could be as simple as a brief message or a graphic, similar to the ones often used in high-ticket industries like property management where clients are always busy:

Negative feedback won’t go away if you don’t address it, and that will only make matters worse. Resolve the customer’s issue and use the negative feedback as a chance to show your long-term users that you value customer experience.

Here’s what you should do:

• Gather and analyze all your users’ feedback to find any patterns or recurring issues with your products or services.
• Divide the issues based on those you can resolve fairly quickly and those you’ll need some time to address.
• Find quick and long-term solutions to your customers’ primary pain points and concerns. Don’t offer quick solutions that will only create more problems for your users in the future.
• Craft a compelling email highlighting the negative feedback and the solutions you applied to resolve the issues your customers were facing. 
• Encourage your users to either leave new feedback or update their negative feedback for your product or services.

Here’s a great example of an email from GetBusy that sufficiently makes the readers feel like their input and opinion matter. They shared the results of a recent poll, setting the precedence that this was a highly demanded feature.

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Their email adds social proof for their new feature, followed by illustrative graphics and use cases explaining how it works.

13. Send important announcements & product updates

32% of positive replies come from the 2nd, 3rd, 4th, or 5th follow-up email, showing that persistence in email marketing is crucial for retaining customers. So, don’t hesitate to send your users important announcements or product updates — even if you have to do it a couple of times a week. 

Keep your users informed about these updates or any new features you’ve added to continue to engage them in the long run. When customers understand the improvements and how these updates benefit them, they are more likely to use the new features.

Here’s what you need to do:

• Use email sequences to announce product updates, clearly explaining the benefits and improvements.
• Provide links to detailed release notes and tutorials for users to explore new features.
• Encourage users to give feedback on the updates to foster a sense of involvement.

Pitch has a clean, straightforward approach to its product launch email. The following email states that their presentation software is live, onboarding 25+ thousand teams in beta.

This added social proof with a simple CTA that directs users to learn more about the launch encourages user engagement and product exploration.

How to start your retention-driven email campaigns

Implementing the following steps doesn’t need to be a one-person job. As you go over these steps, think about which tasks you can delegate to others and which will require your personal oversight.

Step 1: Outline your goals and segment your audience

Find out what you want to achieve with your email marketing campaigns. Outlining your goals and segments will give you a clear direction for the next steps.

For example, you may be looking to reduce churn, increase repeat purchases, or increase your overall customer lifetime value. You can map out your goals using a strategy map on Canva.

To segment your audience, group your customers based on behavior, purchase history, or demographics to send more relevant emails. 

Use Encharge’s segmentation features to create detailed customer segments that align with your goals.

Step 2: Set up SMART retention goals

Create specific, measurable, achievable, relevant, and time-bound goals for your email campaigns. The SMART framework elements can make your email marketing strategies clear, attainable, and focused.

For example, aim to reduce your churn rate by 10% in the next quarter. You can use Asana, Trello, or Monday.com to track your progress and assign tasks to team members.

Step 3: Pick and implement the right email types

Choose email types that align with your goals, like welcome emails, win-back campaigns, or post-purchase follow-ups. This will help you pick an appropriate email format that enhances credibility and professionalism.

For example, send re-engagement emails to your customers who haven’t interacted with your product in the last 30 days.

Use Encharge to automate these emails and ensure timely delivery.

Step 4: Personalize and automate your email campaigns with Encharge

Use automation software to tailor your emails based on customer data and behavior. For example, set up automated abandoned cart emails with personalized product recommendations.

Encharge can help you streamline these processes and scale your personalization efforts. 

How to calculate customer retention rate

Customer Retention Rate = [(Number of customers at the end of the period – New customers acquired during the period) / Number of customers at the start of the period] x 100

If you start with 100 customers, gain 20, and end with 110, your retention rate is 90%.

For loyalty, track metrics like the Net Promoter Score (NPS) and repeat purchase rate. You can adjust your strategy based on the results of these three metrics.

Conclusion

Start with a strategy that’s easiest to implement for you or one for which you already have resources. Once you nail this strategy, you will be more confident about implementing more complex ones. 
Make the process easier using our automation tools so you can personalize, segment, and optimize your email campaigns. See what we can do for you today