What's New: How to retain your best customers

(from the latest issue of the Indie Hackers newsletter)

Turning customers into loyal brand advocates is a game-changer:

• Research shows that repeat customers tend to spend ~67% more than first-time buyers. Here's how to retain your best customers!
• Which acquisition channels work best? This graphic design service hit $100,000 in monthly revenue with the below marketing plan.
• Founder Tejas Rane quit his high-paying SEO job to start his indie hacking journey. Below, he shares how he prepared to give notice, and his blueprint for achieving longevity as a founder.

Want to share something with over 90,000 indie hackers? Submit a section for us to include in a future newsletter. —Channing

📝 Strategies to Improve Customer Retention

by Syed Balkhi

Do you want to turn first-time customers into loyal brand advocates? If so, it's time to start thinking about improving your retention rate. The time you choose to wait before classifying a buyer as "churned" will vary, based on your industry and unique product catalog. Some consider a customer lost if they don't place an order in two months. Others may opt to wait for a year. Here's how to retain your best customers!

Why improve your retention rate?

Customer retention rate is the number of people who place multiple orders on a website over a predetermined amount of time. Regardless of your specific strategy, there's no denying the benefits of keeping existing customers engaged with your brand. Repeat customers are more likely to attend events, engage with you on other marketing channels, tell their friends about your company, and much more.

Here's where it gets interesting: Research shows that repeat customers tend to spend around 67% more than first-time buyers. This statistic means that, if you can keep existing shoppers coming back to your site, you're likely to see a boost in your average order value (AOV).

It's also worth noting that it costs 6-7 times more to convert a new visitor into a customer than it does to retain an existing customer. So, if you're interested in improving your profitability and lowering your marketing costs, improving your customer retention is the way to go.

The strategies

1. Start a loyalty program:

Loyalty programs are an excellent way to convince buyers to return to your site. This strategy predates modern digital marketing, but the internet has made it easier to offer this feature to customers around the globe.

Back in the day, companies like McDonald's and Starbucks gave out customer loyalty punch cards. The cashier would use a custom hole-puncher to mark the card whenever someone came in to get a burger or coffee. After the sixth time, the customer was rewarded for their loyalty with a free product.

In e-commerce, this principle largely remains unchanged. However, the loyalty marketing tools available now make it much easier for small businesses to add this feature to their site.

There are two popular ways to incorporate this type of program:

• Point system: Users are rewarded with points that they can convert to store credit.
• Freebie: The same system as the punch card, but modernized.

Customers who were already convinced to come back will reap the benefits of this system, which will make them like you even more. Meanwhile, you can win over new customers by introducing them to the reward system after completing their first purchase.

2. Collect feedback throughout the sales process:

Customer feedback is crucial for keeping shoppers invested in your business. Getting inside your customers' heads, and understanding what they expect from your business, can help you fine tune your website and marketing strategies. Plus, long-time visitors will enjoy seeing their thoughts shape your brand.

Data from onsite feedback forms, social media, and email surveys are jam-packed with information that you can use. It's important to consider data from all sources in this instance, not just paying customers. There's a good chance that some people who haven't bought something from your site might change their minds if they see their suggestions come to life.

Suppose new email subscribers mention in a survey that they don't fully understand why they need your brand. In that case, you can start working on a customer education series to show users the value of your product or service.

These seemingly small encounters can have a massive impact on your retention rate.

3. Engage with your audience across all marketing platforms:

If your goal is to improve retention, you're definitely going to want to develop a robust social media and email marketing strategy. When compared to single-channel marketing, omnichannel marketing can improve retention rate and engagement by a whopping 90%!

The truth is that most people are not going to go to your website every day. You have to meet them where they spend their time if you hope to turn them into repeat customers. Here are a few ways to increase social media engagement:

• Broadcast live video events (webinars, AMAs, and interviews).
• Host online giveaways.
• Respond to comments on your posts.
• Share articles from your blog or other streams of original content.

Email is another channel that you should pursue if you want to boost your retention rate. We found that 58% of internet users say that their email is the first thing they check online in the morning. If you can deliver high-quality emails to your customers, they are more likely to eventually make it back to your site.

Make your emails relevant to each user. Personalization can have a massive impact on how customers perceive your brand. 80% of online shoppers say that they want businesses to personalize their content and offers.

4. Make it easy for users to find answers:

I suggest adding a live chat option to the bottom of your site. You should clearly show that your team is available and ready for questions.

Business leaders selling somewhat complex products, like SaaS, should consider the benefits of adding a knowledge database to their site. Sometimes users don't want to talk to customer support. Instead, they would rather look for the answers themselves.

As you can see, there are plenty of ways to retain your best customers and keep them engaged for years to come!

What customer retention strategies have you seen success with? Share below!

Discuss this story.

📰 In the News

from the Volv newsletter by Priyanka Vazirani

💻 Tech workers are fleeing FAANG for Web3.

📉 The World Bank predicts that Ukraine's economy will shrink by almost half in 2022.

🤑 Payment providers are incentivizing your green spending.

💰 VCs are pouring billions of dollars into a new industry: Q-commerce.

👯‍♀️ Broadway’s next musical hit might come out of TikTok.

Check out Volv for more 9-second news digests.

🚀 The Marketing Playbook That Hit $100K MRR

by Quentin Gilon

As a cofounder of ManyPixels, a graphic design service, I've tried many acquisition channels. It took us a little over three years to pass the $100K MRR mark. Here are the channels we tried and how they performed!

Early success

Our early success was a combination of community building, personal branding, heavy discounts, and Product Hunt launches. Back then, productized services were very new, and only companies like WPCurve or DesignPickle had cracked the business model. People were intrigued, and wanted to give them a try.

Most of our initial traction came from our cofounder’s already existing online presence. Robin had spent years posting about his founders journey on different platforms (Facebook, Reddit, Twitter, Hacker News).

When we launched in early 2018, he doubled down on those and became even more active, constantly providing value and insight to the different communities.

We got Product of the Day on Product Hunt. It was much easier to get noticed back then. We did a few subsequent launches for the next version of our service, but did not get the same visibility.

Content and SEO

Content and SEO accounts for 50% of our traffic, and about 35% of our acquisition.

We started actively creating content in early 2019, and now have more than 500 blog articles. Here are a few things that we have been doing for content:

• We started with a simple SEO approach: We came up with a semantic core, and targeted keywords one by one. It did give us a great initial boost, but traffic then started to slow down.
• We changed our strategy to move from a keyword-based search to an entity-based search. We adopted the topic cluster methodology, which focuses more on topics than distinct keywords.
• We now work on creating “micro funnels” by interlinking our articles. This helps keep the reader engaged with our content.
• On top of creating new articles, we also improve our best performing ones, which has been effective so far.
• For onpage SEO, we make sure that our website and content are optimized.
• As for the offpage SEO, we did a bit of link building and link exchange activities combined with guest blogging, but we found out that it was not worth our time.

Aside from blog articles, we have another channel of content that has brought us a lot of traffic and customers over the years: Our Illustration Gallery. Here are a few stats:

• 2.5M sessions (around 70K per month).
• 70K backlinks.
• 200 customers acquired.

We are now looking to replicate this success by launching an Icon Gallery in the next couple of months.

Word-of-mouth and referrals

This is probably the best channel! Just build a great service or product, take care of your customers, and they will refer you.

Our onboarding survey shows that ~35% of our customers come from referrals. We don’t do much for this channel. We have a referral program through our app (invite a friend and both get $100 off), but it has not worked very well.

Facebook Ads

Facebook Ads have been one of our biggest failures so far. It’s working for our competitors, so why aren’t we able to replicate that success? We sell the same service to the same market, and at the same price.

So far, we have:

• Spent more than $35K.
• Worked with an agency for three months.
• Had three different in-house team members taking the lead.
• Created dozens of experiments with different creatives and audiences.

We were paying $2K per conversion as of the last six months. That’s too high to increase the budget and start scaling. Last week, we decided to refocus our efforts on organic content, and significantly decrease the spending on paid ads (around $1K per month).

Google Ads

Like Facebook Ads, we haven’t been able to scale this channel efficiently. After many attempts, both with agencies and internally, and $30K spent over two years on paid search, we have now scaled down to just one branded keyword campaign.

We are currently working on a ManyPixels VS competitors website page. This page will serve as the landing spot for a paid search campaign on competitors’ keywords.

Paid media and PR

Back in 2020, when we launched our new app and new branding, we paid a PR Distribution Service around $1K. We ended up on Yahoo, but it did not provide us with any juice.

We are giving paid media a try right now. We did our first YouTube sponsored video here (cost: $1,250), and our first sponsored newsletter (cost: $3.5K).

I believe in the video format, and would like to keep experimenting with YouTube sponsorships.

Check out the full post here for the rest of the acquisition channels that we tried!

What's your top acquisition channel? Share in the comments below!

Discuss this story.

👥 10M Users, Zero Funding

by Aytekin Tank

Building a great team:

Nurture your star employees.

Passionate, excited people are worth their weight in gold. Ensure that they’re happy and help them grow. If someone is driven, listen closely to where they want to go and map out a plan to help them get there. Check in regularly and track their progress.

Don’t force creative people into a box. Stay open and let them change course, if necessary. Your whole business will be stronger for it.

Discuss this story.

👋 Tejas Rane Quit His High-Paying SEO Job

by Tejas Rane

Hi, indie hackers! I'm Tejas Rane, and December 23, 2021 was my last day as SEO Growth Lead at a US-based fintech company. After working for a year-and-a-half, I took the plunge to become a full-time founder.

I’m based out of Mumbai, India, and I’ve written two books: One on Quora marketing, and one on SaaS SEO. I am also the cofounder and CMO at CampusTrail, a study abroad consulting firm.

I’m currently building Affiliate Corner, a research product for affiliate marketers. We employ the RaaS model: Research-as-a-Service. I quit my job because I wanted to eliminate all of the factors that limited my growth in terms of my abilities, skills, and income. This also coincides with the famous Naval quote:

Earn with your mind, not with your time.

That hit me hard. Read on for more!

How I quit my high-paying SEO job

When I quit my job, my startup, CampusTrail, was already making around $13K MRR. We started in October 2020, and grew from 0 to 30+ employees within the span of a year-and-a-half. I was drawing a monthly salary equivalent to half of my job’s monthly income.

Also, note that we are five cofounders with 30+ employees, and we have a lot of overhead costs. As a CMO, it was quite difficult for me to work at my day job, and on my own startup, at the same time.

Quitting a job is never easy. Randomly quitting your job without a concrete plan is even harder. Before I quit my job, I had certain things in place.

Five things to have before you quit your job

1. Savings: Try to have at least two years of savings. This can be variable, depending on where you live.
2. Skills: If you are not confident about your skills, don’t quit.
3. Ideas: If you don’t have any idea what you will be building, don’t quit.
4. Patience: If you are an impatient person, being a solo founder will likely be very hard for you.
5. Hunger: You have to be hungry to build something useful and make money.

I would say that, of the above five assets, skills, patience, and hunger are absolute musts. A lot of people also say that you need to be making revenue from your side project that is equivalent to your job’s annual income before quitting.

I have some contrarian opinions on this because it's quite difficult to execute. Personally, I don’t have the creative energy left to work on my project after a full day at my job. It's easy to burn out by doing this, which will hamper your performance. I have experienced this firsthand.

Try getting to about 40% of your job's annual income before quitting, instead of 100%. As I mentioned above, I was making half of my day job’s monthly income when I quit. That was a good cushion for me. On top of that, I already had savings. Since I live in India, my expenses are very low.

What’s next?

When I quit my job, I had a strategy in mind. After quitting, what’s the most important thing to achieve? Making money as soon as you can.

Here’s my blueprint:

1. Build 1-2 small products that take 1-2 months to build. Start monetizing. Scale up, and exit on MicroAcquire.

2. Build a long-term sustainable SaaS product with recurring income. This will be your primary product, and will be with you for a long time.

There are many upsides to building and selling a small product:

1. It ships faster than a big project.
2. It saves time and gives you a head start.
3. You get good cash runway.
4. You have a shipping blueprint to use.
5. It helps you build an audience.
6. You start making valuable connections.

All of the above points will help you tremendously when you start on your next big project, the sustainable SaaS product.

I hope that my journey has inspired you in some way or another. I'm glad to be a part of the indie hacking world!

Discuss this story.

🐦 The Tweetmaster's Pick

by Tweetmaster Flex

I post the tweets indie hackers share the most. Here's today's pick:

🏁 Enjoy This Newsletter?

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Also, you can submit a section for us to include in a future newsletter.

Special thanks to Jay Avery for editing this issue, to Gabriella Federico for the illustrations, and to Syed Balkhi, Priyanka Vazirani, Quentin Gilon, Aytekin Tank, and Tejas Rane for contributing posts. —Channing