Notifications Strategy for User Engagement & Retention

Every startup needs to think about its notifications strategy. It's not enough to simply send out emails whenever something happens on your site or to send out weekly newsletters. Notifications are a crucial part of managing your user base's lifecycle and are key to any retention efforts your business undertakes.

The right notifications can keep your users engaged, encourage them to return, and help them get the most value from your product or service.

A well-defined notifications strategy can improve customer engagement, reduce churn, and ultimately boost your business's success.

Learning from Catalog Marketing

The catalog marketing world, where companies have invested heavily to understand the art of sending out mailers, offers valuable insights into effective notifications strategies. Unlike the online world, there's generally a cost associated with sending out a notification and a high LTV attached to each customer, making the stakes significantly higher.

RFM Segmentation: Recency, Frequency, Monetization

Catalog marketers use a segmentation system called RFM to classify customers based on three key factors:

Recency: How recently did the customer engage with your product or service?

Frequency: How often does the customer engage with your product or service?

Monetization: How much revenue does the customer generate for your business?

Customers are ranked from 1 to 5 across each variable, with 555 being the highest and representing the most valuable customers. This approach highlights that customers with higher numbers are more likely to respond to marketing efforts.

Understanding Uplift Marketing: Persuadables, Sure Things, Lost Causes, and Sleeping Dogs

A key challenge arises: What if your highest-ranking customers would have responded anyway? This is where the concept of "uplift marketing" comes into play. Uplift marketing focuses on identifying the customers who are truly influenced by your marketing efforts, separating them from those who would have engaged regardless of your actions.

This approach divides customers into four groups:

Persuadables: Customers who are influenced by your marketing and notifications. These are the ones you want to target with your campaigns.

Sure Things: Customers who would have engaged with your product or service even without any marketing intervention.

Lost Causes: Customers who are unlikely to respond to your marketing efforts regardless of what you do.

Sleeping Dogs: Customers who are likely to engage but are at risk of churning if reminded too frequently or in the wrong way.

Only the "Persuadables" group can positively impact your business. The "Sure Things" don't require marketing spend, while the "Lost Causes" won't respond anyway, and the "Sleeping Dogs" might be pushed away by excessive reminders.

Segmenting Your Audience for Targeted Notifications

Segmenting your audience based on their responsiveness is a smart move for effective notifications strategies. By identifying the factors that drive their participation, you can tailor your notifications to maximize engagement.

The "Persuadables" are the key audience for your notifications strategy.

Understand the needs and preferences of each segment to craft personalized notifications.

Avoid bombarding users with irrelevant notifications. Instead, focus on delivering value and providing timely information.

Conclusion

Creating an effective notifications strategy requires a deep understanding of your audience and their behaviors. By segmenting your audience and identifying the "Persuadables," you can craft targeted notifications that drive engagement, reduce churn, and ultimately boost your business's success. Don't forget that less is often more. Finding the sweet spot between reminding users and avoiding over-stimulation is key to maximizing the impact of your notifications strategy.