How Video Marketing Increases Customer Retention Rates
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How Video Marketing Increases Customer Retention Rates

Tony FloresTony Flores

July 15, 2021

Like most people in advertising, my career path has been unconventional. I trained as an architect, then ended up focusing on interactive media and user experience as part of a master’s degree. That led me to spending the best part of a decade launching websites and other online experiences as VP of Global Online for National Geographic and Fox International Channels. Working with these iconic media brands taught me a lot about engaging audiences through entertainment and above all the power of video to bring a story to life.

I’ve worked with many brands and businesses looking to increase customer retention rates – and we know the cost of winning a new customer far exceeds the cost of retaining an existing one, so it’s important to win that customer over from day one. A key to getting things right from the outset is creating a great experience for that customer. But what are the ingredients of an engaging customer experience, and how do you cut through the noise of all the other attention-seeking brands? The short answer is to ensure your brand connects with the customer on an emotional level, that they feel understood, and have all their questions answered through an accessible portfolio of content. And this can happen well before the new customer has even made a purchase – through a well-crafted video marketing strategy.

What makes a good video marketing strategy?

Video advertising, online video marketing, social video ads - whatever we call them - are a great way to increase engagement, tell brand stories in line with your customer’s expectations, and ultimately improve their brand experience. When you’re scrolling through Facebook or Instagram, what catches your eye? Is it the video of the cute puppy, or is it the still image of a company product? If you love dogs, the video of the cute puppy will win every time.

Now, let’s say you’re more of a cat person. Does that puppy still grab your attention? Maybe. But, wouldn’t a cat video work a lot better? This may seem a tad simplistic, but these simple principles form the building blocks of a solid video marketing strategy. Dog people will interact with dog videos, which increases the engagement and allows the ad to be seen by more people, and cat people will interact more with the cat videos.


So, how can video increase customer conversion rates?

Fiat 500x video marketing advertisement

Like I mentioned above, videos are almost always more effective than a still image. However, the videos are even better when they’re aligned with a person’s interests. In my previous work, I worked on a video advertising campaign for the Fiat 500X. Though the car appealed to nearly everyone, all of these potential customers had different reasons for loving the car. Some people would want it for their kids. Others would want it because it would fit their fishing gear. And the list goes on. The key was to know how to use this data.


Let The Creative Find The Audience

Personalization has been around for years, and has a fairly mixed reputation depending on how the customer’s data gets played back to them. We need to take a step back and make sure it’s not being used gratuitously, and that it’s adding value to their experience. In short – keep it “useful, not creepy”. And done right, creating multiple versions of the video ad can help find the right audience, and connect with them on a practical level all the way down the sales funnel – from building brand awareness to showing how specific features are relevant to their lifestyle, and at different times of day or week.


Where does the personalization data come from?

video marketing and personalization

Whenever someone interacts with something online or on a social network, this contributes to a profile about that user – their interests, their preferences and a number of other insights into what resonates with them. And we can apply this data to the creative to ensure we get the story right, in a nuanced and personalized way. This keeps us on the “useful” end of the spectrum, as opposed to being “creepy”!


Personalizing Your Video

personalized marketing

We don’t always need to go as far as showing the name of the person, or what their favorite drink happens to be, but if we can connect with a potential customer’s interests or hobbies, we can help show them how relevant your product can be. In the Fiat example above, we generated multiple versions of the same ad – personalized for their interests. So, if a person loved fishing, they’d see the Fiat driving through the countryside and be able to fit their fishing rods in the back. Each version was filmed and deployed to see which version would appeal the most to different audience groups. And it worked. I mention fishing and countryside, because this generated the highest levels of conversion and engagement – not that anyone would have expected a Fiat 500X driver to be venturing out of the city! 


Data-Driven Video Ads

In a nutshell, data-driven video in marketing works because it’s more relevant to your customer. It builds more of a connection, and they’re able to see the product they’re interested in used in relation to how they want to use it. With Fiat, we found that the personalized ads versus non-personalized ads had a 20% uplift in customer conversion.


How To Increase Customer Retention with Video

Video is great at converting new customers, but that’s only half of the story. Using data-driven video is also great at onboarding and retaining customers as well. With many of the companies I’ve worked with, they’ve followed up with customers who purchase a product with a personalized welcome video, or a reminder of how to get the best from their new purchase.


The Power of the Post-Purchase Video

Let’s say you’ve bought a new mobile phone. The day after you buy it, you then receive a welcome video that walks you through the phone and shows you certain features. This simple video alone can reduce calls to the customer service center by 50%. But, we also found that another follow up video a week later, based on helping the customer make use of the full set of features they have access to, was able to further increase retention and deepen the customer relationship in those crucial first few weeks.


These onboarding and retention videos help welcome new customers, reduce calls to the call center, and provide a better customer experience. It also builds brand advocacy, reduces churn, and increases the lifetime value of that customer.


Video vs Email

Most companies will send an email with all of this information. But, emails often get lost, and when they’re opened, they’re not always read either. However, when working on a customer loyalty campaign with Tesco, a big supermarket chain in the UK, we found that even just including the word “video” in the subject line helped the email perform better.

tesco shopping card personalized

In this example we A/B tested a personalized video against a non-personalised video – which outperformed the non-personalized video by 286%.


Using Data-Driven Video Marketing

It should come as no surprise that creating a video ad requires more production budget than creating still-image creative. That’s why using data to create a customer-centric video ad campaign can ensure that budget gets used effectively. We essentially de-risk the investment to create videos because we’re using actionable data that shows what a company’s customers are interested in.


This isn’t just a business tactic that can work between large companies and consumers. In fact, this is a great way to increase conversion and retention amongst B2B as well. I’ve found this is actually one of the best areas to use video in. 


A few years ago, I worked with a large B2B services brand whose potential clients would fill out a form with their contact information and the industry they worked in, etc. The company then generated an email with a personalized demo video that related to their industry. It increased conversions exponentially. 


So, whether you’re collecting the data like that CRM company, or you’re using social media tools to your benefit, creating an effective video marketing campaign doesn't have to be scary as long as it’s built on customer data and insights.

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