Retention and customer loyalty are more important than ever on iOS 14.5+
User retention has always been a key factor in the success of any app. In e-commerce, for instance, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. With iOS 14’s changes to user acquisition data, and upcoming changes to email tracking, retention has become even more important — and competitive. For brands focused on an omnichannel presence — app, web and email — privacy changes can make providing a coherent customer experience more challenging.
Why is loyalty important?
Data from Adjust’s App Trends report found that retention for e-commerce apps is relatively high compared with reference verticals — with a retention rate of 13% on day 7 and 8% on day 30. However, when we consider that the global median eCPI for an e-commerce app in Q4 2020 was $1.56, with higher prices in more developed e-commerce markets, you can see why getting a return on that investment is so important. Even beyond e-commerce, loyalty is a key tool to keep customers, no matter what vertical you’re in. Increasing customer retention by even 5% can increase profits by between 25-95%. To ensure you earn out that initial install cost, you need to focus on loyalty.
But that’s where customer-focused app developers start to run into the challenges posed by iOS 14. With less deterministic data to evaluate channels, and less precise targeting to find users that are interested in your offering, the initial costs to find good quality, high conversion users are increasing. This is combined with a reduced ability to offer relevant, personalized ads.
Personalization is a powerful tool in modern commerce, with 91% of consumers more likely to shop with a brand if they provide personalized offers and recommendations. But unless you convince your users to opt-in, personalization becomes more difficult. Loyalty programs and incentives can be the way to ensure you’re using customers’ zero-party data and avoiding privacy concerns.
Zero party data
Forrester coined the term zero-party data and states that it’s “Data that a customer intentionally and proactively shares with a brand, which can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize her.”
By opting into loyalty programs, responding to surveys for incentives, or offering targeted discounts for certain user behaviors, you can build a bank of data that customers are enthusiastically opting-in to share. Since zero-party data is sourced directly from the user, it’s dependable, and you can be certain that a customer wants to hear from you. Users who are giving zero-party data also want it to become more tailored, so they’re willing to help you provide them with more relevant opportunities to convert.
For email marketers, this will become particularly important on iOS 15, as tracking pixels will no longer be allowed on iOS. Some 60% of the average email list is inactive or dead, and without a way to check open rates, there’s no way to weed out users that have dropped off. By creating a double opt-in in the initial sign-off, like an additional email confirmation link upon sign-up, you can ensure you’re getting users that are willing to make at least that first initial investment of attention. And by offering a coupon or discount you can improve the rate that users are willing to opt-in.
Learning about your customers
Keeping users in-app through loyalty tactics works across verticals — with non-gaming apps deploying gamification tactics and gaming apps deploying loyalty tiers and bonuses more often seen in the airline industry. Casino apps are particularly adept at using loyalty tactics to increase retention.
While the IDFA is largely going away as a dependable omnichannel identifier, marketers will still have access to the IDFV as well as any other first-party identifiers. The IDFV gives firms an identifier to access first-party user data and provides an opportunity to understand the audiences within apps they own.
Analytics tools, CRM and Adjust use tool-specific IDs to identify users, sending events and attributing behaviors to those customers. Potentially any event can trigger a loyalty benefit, and deciding which behaviors to incentivize should be part of your loyalty strategy.
Loyalty programs have the benefit of intuitively explaining to customers what they get out of certain actions. There’s a clear outcome, and often a dollar amount, that is paired with taking an action. Users are willing to create accounts to benefit from loyalty schemes, and they also clearly see the benefit of personalization in the loyalty environment.
With an ever-increasing focus on privacy, finding ways to combine zero- and first-party data to offer an enhanced customer experience is the most effective way to ensure you’re providing the level of personalization that today’s consumers are used to, without risking their data.
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