Welcome to The Retention Newsieby The Email Marketers.

Every week we bring you the best case studies, strategies, and tips around keeping more customers, turning them into raving fans, and increasing revenue.

Up this week:

• 👜 How Gilt Bounced Back

• 📧 Email Segmentation Techniques

• 📊 Personalized Experiences, The Importance of Zero-Party Data, and The Psychology Behind Loyalty Programs.

Reading time: 4.5 minutes

How Gilt Turned the Tables with a Dual-Purpose Loyalty Program

In 2007, Gilt burst onto the Ecommerce scene with a bang. Their first flash sale of 50%-off Christian Louboutin shoes nearly crashed their website, setting the stage for what seemed like unstoppable growth. Sales skyrocketed from $25 million in 2008 to an impressive $425 million in 2010, making Gilt a star in online retail.

But as the saying goes, what goes up must come down. Gilt hit a wall. The PR shine wore off, sales slowed drastically, and their expansion into full-price retail, travel, and food items proved costly.

With declining sales and customer retention challenges in the flash-sale model, Gilt needed a game-changer. Their solution? An innovative dual-purpose loyalty program called "Gilt Insider."

This program merged refer-a-friend incentives with traditional loyalty rewards, creating a powerful retention tool that addressed multiple pain points simultaneously.

Here's how Gilt Insider works:

1. Members earn points by spending money on Gilt or referring friends.

2. Points can be redeemed for exclusive rewards, tailored to the fashion-forward audience.

3. A tiered system (Select, Premiere, Noir) adds an element of exclusivity and aspiration.

4. Points expire after six months, encouraging frequent engagement.

The results were impressive. Gilt not only stemmed the tide of declining sales but positioned itself for a $250 million acquisition in 2015.

What made Gilt Insider so effective?

• Dual-purpose design: By merging referrals and loyalty, Gilt crafted a program that attracted new customers and encouraged repeat business.

• Exclusivity and FOMO: The tiered system, featuring an elite Noir level with perks like waitlist preference and early sale access, tapped into customers' fear of missing out.

• Urgency: The six-month point expiration encouraged regular purchases, combating the "one-and-done" habit of flash sale shoppers.

• Flexibility: Customers could choose how to earn and spend their points, making the rewards feel more personalized and valuable.

• Combine strategies: Merging referral and loyalty programs can create a more powerful retention tool than either alone.

• Create tiers of exclusivity: Offering higher levels with real benefits can boost engagement and increase customer lifetime value.

• Use strategic expiration: Setting a reasonable expiration date on rewards can encourage more frequent purchases without alienating customers.

• Offer choice: Allowing customers to decide how they earn and spend points increases perceived value and engagement with the program.

• Address multiple pain points: The most effective retention strategies often solve several business challenges together.

Unlock the Power of Advanced Segmentation

Are you leaving money on the table with basic email segmentation?

Personalized, segmented campaigns can boost email revenue by 760%. To harness this you need to go beyond the basics.

Here's how to take your segmentation strategy to the next level and boost retention:

1. RFM Segmentation: Segment customers by Recency, Frequency, and Monetary value to identify and reward your most valuable VIPs.

2. Behavioral Segmentation: Tailor emails to customer actions like browsing, cart abandonment, and purchase history. Use this data for personalized product recommendations and re-engagement campaigns for inactive customers.

3. Predictive Segmentation: Use data to predict future customer behavior and drive ROI. For subscription businesses, identify at-risk customers and proactively address concerns or offer incentives to stay.

4. Psychographic Segmentation: Go beyond demographics to target based on personality, values, interests, and lifestyle. Appeal to customers' motivations and emotions with tailored campaigns, like DIY enthusiasts vs. professional service seekers.

By implementing these advanced segmentation techniques, you're not just sending emails – you're crafting personalized experiences that resonate with each customer.

Remember, the goal is to make every subscriber feel like your emails were written just for them. When you achieve this level of personalization, you'll see higher engagement, increased conversions, and stronger customer loyalty.

Start by implementing one of these strategies today. Analyze the results, refine your approach, and watch as your retention metrics soar. Your customers – and your bottom line – will thank you.

• Discover how AI-powered personalization revolutionizes customer retention strategies across industries.

• Why 76% of consumers are more likely to buy from brands that offer personalized experiences.

• Find out why zero-party data is crucial for retention marketing and how to collect it ethically.

• The psychology behind loyalty programs and how to use it for stronger customer relationships.

We help 8-& 9-figure e-commerce brands increase revenue and build strong customer relationships through retention marketing: Email, SMS, direct mail, subscriptions, memberships, loyalty programs, and more.