Why retaining customers is so important
Retaining customers is important for a few reasons. Firstly, nurturing existing customers tends to be more cost-effective than seeking new ones, with return customers spending more than new ones. A customer retention strategy can help you focus on high-value customers, maximising their lifetime value to your business.
What is customer retention?
Customer retention analysis measures how many of your customers are repeat buyers or service users over a set period. In another sense, it measures how well your service, buying experience, pricing and products resonate with your customers. If retention is low, it’s a sign of an issue in one of these areas.
Measuring retention and churn
You can’t improve retention if you can’t measure it.
We look at:
- Sales cycles
- Types of churn – soft, hard, voluntary, involuntary and sliding
- Customer engagement metrics
- Calculating retention rates
Value of customer retention
Focusing on customer retention can:
- Maximise the value of your marketing budget
- Increase CLV (customer lifetime value)
- Build stronger relationships with customers
- Stabilise revenue
- Boost customer engagement and loyalty
- Give you a window into internal issues that could be driving customers away
Real-world customer retention strategies
The final step? Improve retention rates by changing the way you work.
This can include:
- Using slider modelling or CLV analysis to identify and target high-value customers
- Segmenting customers to personalise messaging
- Improving the customer experience
- Creating or reworking a loyalty programme to nurture and reward customers
Read more about retention, churn and customer loyalty in our free guide – download now.
FURTHER READING
Can you see churn coming?
Love or leave: the unexpected power of loyalty programmes
Slider Modelling: Detect Pre-Churn Behaviour
4 Components of a Great Customer Retention Strategy
Customers we have collaborated with to create a customer retention strategy:
