To improve the ratio between your acquisition costs and your average customer lifetime value, you need to decrease your customer churn rate. That means building solid, positive relationships with your customers, and ensuring that the product they’re using actually meets their long-term needs.
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 competitors.
Collect attributes for your customers, segment them by natural groupings like product usage or organization size, track customer retention metrics for each segment, and create personalized content for each.
Make sure people understand how your company is performing over time and against industry trends.
Interview existing customers to find out about the problem they were trying to solve, the reasons they chose your product, and what difference your product has made to their situation.
Consider using user testing to see people actually using the product. Observing how people use a product is way more powerful than asking them.
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 product, and survey specific segments for detailed information. Integrate customer support.
Use the information you gathered to improve your site, product, and offers. Work to build customer relationships and loyalty.
People will always complain about the price. Compare your prices with competitors and note what price changes do to conversion rates. Consider your framing. The price you set early will determine how people feel about long-term pricing. It’s often better to go in with a high price and then discount for long-term customers to build loyalty than to offer a low price and then increase it over time.
Adding functionality can easily add complexity and negatively affect customer retention. To minimize this, regularly track usability with the system usability scale to see if you are undermining usability as you add functionality.
Improve your onboarding process to help new users get familiar with the product, without overwhelming them with detail.
Create an onboarding experience that’s customized to your users and gets them to the point of being able to confidently make your product useful in their lives.
Find out which problems and queries your customers are most likely to come to customer support with, and provide answers in the product help area. Make sure these answers are easy to find and simple for people to follow.