• by Ray Schultz , Columnist, July 18, 2023

Email ranks as the second most effective customer retention channel. But it is also the channel that has slipped the most even as brands face serious challenges overall, judging by State of B2C Customer Retention, a global study by Spectrm. 

The most effective B2C retention channels/functions are:

• Social media — 33%
• Email — 25% 
• Messaging app, including Facebook Messenger, WhatsApp and Instagram — 10% 
• App push notifications — 10%
• SMS — 9% 
• Content — 8% 
• Influencer — 7%
• Paid search—5%
• Affiliate—2%
• Organic search—1% 

Despite its high ranking, email is now seen as the least effective channel for customer retention:

• Email—17% 
• Paid search — 16% 
• SMS — 16% 
• Offline — 11% 
• Affiliate — 9% 

And the respondents say these five channels are in decline:

• Email — 21% 
• Social media — 17%
• Paid search — 12% 
• SMS — 12% 
• Affiliate — 9% 

This is significant because returning customers constitute a quarter to three-quarters for 88% of the companies polled.   

Still, despite its difficulties, email tools are still being widely used in the average customer retention tech stack: 

• Social media management tools — 64%
• Email marketing tools — 59% 
• Customer loyalty and referral tools — 47%
• Customer feedback — 45%
• Personalization and recommendation engines — 38%
• SEO tools — 38%
• SMS marketing tools — 38%
• Mobile marketing tools — 32%
• Pay-per-click advertising tools —28%
• Analytics tools — 24%
• Content management systems (CMS) — 21%
• Design tools — 3% 

The main challenges to customer retention are managing:

• Customers’ high expectations — 63% 
• Limited budgets and resources — 61% 
• Customer churn — 61%
• Customer data — 57%
• A fragmented customer journey — 56%
• Zero- and first-party data — 55% 
• Decreasing reachability — 53% 
• Privacy updates and compliance — 53% 

The top metrics? They are: 

• Repeat purchase rate — 70% 
• Customer lifetime value — 53%
• Engagement rates, including open and click rates — 49%
• Customer churn — 44%
• Average order value — 42%
• Time between purchases — 39%
• Reachability — 36% 
• Product return rate — 32%
• Retention rate (for app) — 26%
• Net promoter score — 19%

“Marketing is never easy,” concludes Max Koziolek, CEO of Spectrm. “Being tasked with keeping customers interested and engaged with your brand, placing the right messages in front of them, measuring campaigns, and other efforts for retention come with a number of challenges. And most respondents are finding it hard to keep up.

Spectrm surveyed 300 marketers worldwide, responsible for customer retention.