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What most brands get wrong about birthday marketing — and how you can get it right

There are many impressive statistics about birthday marketing emails. According to Experian, they generate 179% more clicks, 481% more transactions, and 342% more revenue per email than the average marketing email.

Such statistics make birthday emails look like a no-brainer: simply gather your customers’ dates of birth, throw a 15% discount their way on their birthday, and watch the money roll in.

But, while they can boost revenue in the short-term, these approaches to birthday marketing miss the point: any email offering a discount will perform much better than an average marketing email. And you can send out discounts at any time.

Birthday marketing is valuable because it’s a rare opportunity to build genuine affection for your brand, and a generic discount doesn’t do that. Instead, it feels like what it is: a marketing message that happens to coincide with a customer’s birthday. 

The best birthday marketing strategies are built around gifts, not discounts

If you give your customers a free gift, it won’t feel so much like marketing. And, when your competitors are offering broad discounts, it will make you stand out.

Dunkin’ Donuts famously offered a free coffee on customer birthdays, no strings attached. Surprising. Endearing.

Then they got rid of it. Instead, they offered 3x reward points for every purchase on your birthday. People were not happy. One disgruntled customer wrote that “it would be less patronizing if they just didn’t give us anything.”

And that’s because shoppers are keenly aware that miserly birthday discounts are less-than-subtle attempts to get more of their money. And, worse, using their personal data to do it.

So, while you’ll likely see a revenue boost on the day, don’t expect customers to thank you for it. They’re buying because people like to save money on their purchases, not because you’ve created genuine connections.

You’re also missing out on the opportunity to upsell. When Dunkin’ Donuts customers redeemed their coffee in-store, they were likely to buy other things to go with it.

Ecommerce brands don’t benefit from that kind of in-store impulse purchasing, but you can get around this by offering a freebie with any purchase.

And if you want to be really smart with your gift-giving, you can segment your audience by previous purchases and tailor the gift to their preferences.

Gifts make business sense, too — they introduce your customers to products that might not otherwise have considered

When you give your customers a birthday discount, they’ll probably buy the same things they always do.

But freebies can introduce them to new products, which can open up long-term revenue streams.

Sticking with the same example: those customers who hadn’t bought coffee from Dunkin’ Donuts before might have tried it because it was free on their birthday, liked it, and then bought coffee every time they visited in future.

Or consider MÜHLE, a German retailer of shaving products, who offer free shaving gel when you make your first purchase. It’s not birthday marketing, but it illustrates the same principle: if customers use the shaving gel and like it, they might buy it repeatedly for years to come.

This approach is particularly effective for brands whose customers tend to make repeat purchases, such as skincare. Offer a discount, and they’ll buy the usual — but with a lower profit margin. Offer freebies, and they could become much more valuable customers.

Generic emails are a missed opportunity — tailor your communications

Sending the same birthday message to everyone is a mistake. It’s like getting a generic card: it lacks personal touch. Customers can tell when a message is just another batch-send. 

They want to feel special, especially on their birthday.

Customizing emails shows you pay attention. Use what you know about your customers: their past purchases, preferences, and behavior can guide you. 

This makes your birthday wish feel sincere, not just a sales tactic.

For example, if a customer frequently buys books on gardening, recommend a new release in that genre as their birthday gift.  It’s thoughtful and shows you understand their interests.

Or, track their wishlist items. Send a birthday discount for something they’ve been eyeing. 

And don’t stop at the gift. Customize the entire email. Use their name, reference their last purchase, or mention how long they’ve been a customer. 

In the end, a personalized email can do more than sell. It can create a loyal customer. And loyal customers are the best kind: they come back, spend more, and share their experiences with others. 

All the numbers show that personalization makes a big difference to customer loyalty. 80% of shoppers are more likely to be loyal to buy from a brand that personalizes the experiences, and 70% are more likely to stay loyal if they get tailored offers.

So, invest time in tailoring your birthday emails. It’s worth it.

Channel usage matters — diversify your approach

If you’re just using email for birthday messages, you might be missing out. Customers interact with brands across multiple platforms. Use them.

SMS, for example, feels immediate and personal. It’s perfect for a quick birthday note or an exclusive offer.

Social media adds another layer. If that’s where your customers are, you can offer tailored discounts through direct messages. 

But remember, personalization is key across all channels. 

Don’t just measure short-term revenue uplifts — look at metrics that indicate genuine customer loyalty

If thinking about birthday marketing purely in terms of revenue uplift is short-sighted, we need alternative metrics to track its true value.

There are many suitable customer loyalty metrics. To understand the impact of birthday marketing, consider segmenting customers who did receive birthday marketing and comparing their data over time to those who didn’t.

Churn rate

Churn rate tells you how many customers dropped out in a given time period. The formula is this:

CCR = (Lost customers ÷ total customers at the start of time period) x 100


(150 ÷ 900) x 100 = 16% Churn rate

10–25% is a pretty typical churn rate. Anything over 25% is concerning. 

You’d expect customers who receive birthday gifts to have a lower churn rate than those who don’t.

Customer lifetime value (CLV)

Customer lifetime value (CLV) projects the total monetary value of a given customer.

If CLV is higher than the cost of acquiring a customer, you’re making a profit.

Loyal customers — who make more purchases and spend more per purchase — tend to have a higher CLV than non-loyal customers.

Birthday marketing can grow CLV by:

  • reducing churn and increasing repeat purchase rate
  • increasing average order value (by introducing customers to new products)
  • lowering acquisition costs (by creating happy customers who refer others, reducing your reliance on expensive paid channels)

To calculate CLV, you need to first figure out your average purchase value — total customer spend divided by the number of purchases in a given year — and multiply that by average purchase frequency — the number of purchases divided by the number of customers.

This is your average customer value. You can then multiply this by the average customer lifespan — the amount of time, on average, a customer purchases from you — and you have a CLV figure.

So, if your average customer spends $20 per purchase, and makes an average of four purchases per year, your average customer value is $80. If your average customer buys from you for five years in a row, your CLV is $400.

A low CLV suggests your customers aren’t very loyal.

Calculate the CLV of your birthday marketing customers and compare it to your overall CLV — if it’s higher, birthday marketing is delivering high-value customers. If it’s much lower, your birthday marketing tactics aren’t delivering long-term loyalty. 

Revenue churn

Revenue churn refers to the revenue lost from existing customers. 

It’s vital to track revenue churn because this helps you understand the rate at which customers negatively affect your revenue from actions such as order cancellations or subscription downgrades. Customers with high revenue churn are likely to leave your brand behind. So here’s the formula using monthly recurring revenue (MMR):

Gross revenue churn = (Churned MRR ÷ MRR at the beginning of the month) x 100

With actual numbers, the formula looks like this:

($250k ÷ $2m) x 100 = 12.5%

This is an okay metric, but it doesn’t consider revenue expansion from existing customers from upgrades, for example. So to find this part out, you’ll need a net revenue churn formula:

Net revenue churn = (Churned MRR – expansion MRR) ÷ MRR at the beginning of the month x 100

In our example, let’s say the business gained $50k in expansion revenue, so:

($250k – $50k) ÷ $2m x 100 = 10%

With this metric, it’s possible to have a negative percentage, which tells you your revenue expansion gains outweigh your revenue losses. 

Net promoter score (NPS©)

NPS© is a popular metric, which you might recognize even as a customer of other brands—it measures your customer’s overall satisfaction and how likely they are to refer your business to other people. You’ll usually be able to gather the information you need for this from customer feedback surveys. 

Hopefully, those customers who receive birthday gifts would have a higher likelihood to recommend you.

Here’s the exact formula you’ll need when you have the numbers:

NPS© = (Number of promoter scores ÷ total number of respondents) – (Number of detractor scores ÷ total number of respondents) = Answer x 100 = %

So let’s say your NPS© survey had 300 total respondents. “Promoter” scores come from positive responses, and “detractor” scores come from negative responses—dividing each by the number of responses gets you a decimal that you can turn into an overall percentage by multiplying it by 100.

For example:

(275 ÷ 300) – (25 ÷ 300) = 0.83

0.83 x 100 = 83%

This way, you can see the overall health of your customer satisfaction; if it’s a low number, you can take action to improve your customers’ experiences.

Repeat purchase rate

The repeat purchase rate helps you see the percentage of customers who return and buy more from you.

RPR = (Number of customer who purchased more than once) ÷ (total number of customers) x 100

So for numbers in this case, here’s an example:

(12,500 ÷ 50,000) x 100 = 25%

Nice and easy, right? 

Time between purchases

The name is self-explanatory. Here’s the formula: 

TBP = (Sum of individual purchase frequency by days ÷ number of repeat customers)

Let’s say you already know your number of repeat customers from using a CRM or a customer loyalty program software, and that figure is 50.

By using each of those customers’ individual purchase frequency (using a spreadsheet would be handy if you’re doing this manually) and adding them up, you get the first part of the formula, so for example:

140 days ÷ 50 = 2.8 days (rounding it up to 3 to be conservative)

Whether or not the time between purchases is good for your business depends on the nature of your product (e.g. for FMCG goods like groceries, three days is good). 

Referral rate

Referral rate measures the percentage of your customers who are referring others. It’s calculated by dividing the number of customers who make a referral by the total number of customers.

You’d expect customers who receive birthday gifts to make more referrals.

Formula: number of customers who made at least one referral / total number of customers

Get started with customer loyalty

Birthday marketing is a good way to build customer loyalty, but it’s a relatively small part of the puzzle.

If you want to retain more customers and make them more valuable, you need a wide-ranging customer loyalty strategy underpinned by a first-rate loyalty program.

And that’s where we can help. Book a demo to get started.

About the author

Fiona Stevens

Fiona Stevens is the Head of Marketing at LoyaltyLion, a data-driven loyalty and engagement platform for fast-growth ecommerce merchants. LoyaltyLion helps thousands of retailers worldwide to build fully customized loyalty programs, proven to increase customer engagement, retention and spend. Fiona has almost 15 years experience in Marketing, having worked in-house and agency side across functions including PR, SEO and content. She has specialized in loyalty for retail and ecommerce brands for the past eight years.

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