Increase customer retention

If you want to boost revenue and cut unnecessary spending, one of the top tools in your kit might just be to increase your customer retention.

If you keep your customers, you don’t need to acquire as many

It’s a simple equation: if you want to grow by 100 customers a month, but you’re losing 20 customers a month, then you actually need to attract 120 new customers every month to meet your target. If you cut that churn rate down by 10, you’re automatically 10 up on your growth goal.

If you keep your customers, you don’t need to spend to acquire them again

There’s a good chance you’re spending a substantial amount on acquiring each customer. Paid advertising, lead generators, promotional emails, influencer marketing… these are costs that are all attributable to getting the customer to actually try out your company. You justify these acquisition costs by assuming that a customers’ lifetime value - the revenue they bring in with purchases or a subscription - will be far more than you paid to acquire them as a customer. The longer you keep them as a customer, the more likely they are to provide you with a good lifetime value.

Calculate metrics that will help you to measure, track, and analyze customer retention.

Calculate your base customer retention rate, net revenue retention rate, customer churn rate, monthly returning revenue churn, and customer lifetime value. Compare these to industry benchmarks to understand how you’re doing compared to others.

Segment your customers and personalize content and UX to each.

Collect information about your customers, segment them by natural groupings like purchase behavior or demographics, track customer retention metrics for each segment, and create personalized content for each.

Set up customer feedback loops that continually harvest information about what your customers do and don’t like.

Automate customer surveys, add interactive surveys and live chat to your website, and survey specific segments for detailed information. Offer perks or gamify reviews and integrate customer support.

Put together a customer retention strategy that addresses the problems you’ve identified.

Use information from unhappy and happy customers to improve your site, product, and offers. Work to build customer relationships and loyalty.

Rewrite post-purchase emails to nurture customer relationships, boost buyer confidence, and encourage repeat purchases.

Provide related product recommendations and discount codes in order confirmation emails. Offer FAQs and advice about their purchases. Remind customers to fill up on commonly-replenished products, and include a bonus offer to make existing customers feel appreciated.

Create brand loyalty programs to reward repeat customers.

Figure out who your loyal customers already are, and build a program that appeals to them. Provide rewards that your customers want in return for actions that you most want them to take. Make it easy to sign up and give you feedback about the program.

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@hesh_fekry I added in this step.

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Between 1-2, I would add…

Audit the UX of the entire customer journey
Take the time to review the entire customer journey from ads to the website and into email communications. Looks for opportunities for improvement based on analytics, session recordings, and heatmaps.

You need to get the overall experience sorted before moving into personalizing.

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All of the examples outline gathering customer feedback at scale. This is important, but nothing beats talking to customers personally (and preferably face to face). Every once in a while, take the opportunity to meet with customers and talk to them about their experiences.

In particular take the time to talk to customers who have left. Find out what they went wrong.

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