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.
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 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.
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.
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.
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.