Strategies for Customer Retention
Many companies believe that constant expansion of their customer base should be the top priority. Companies often undervalue customer retention strategies because retention campaigns can take longer to produce results.
However, customer retention can have a bigger impact on ROI with high retention rates translating to strong brand loyalty and increased spend. Despite the benefits of implementing retention strategies, one third of tech CEOs devote their time to customer acquisition efforts instead.
Identify Core Customers
One of the main reasons why companies fail is because they try to appeal to everyone and waste resources by spreading themselves too thin.
Identifying the 20% of users who have the most profit potential is key to creating a company with a scalable platform for growth. Organizations looking to identify their core audience can use data for selling metrics, customer lifetime value and profitability. Analyzing these metrics allows an organization to create a comprehensive profile of its core customers and focus customer retention efforts on those who are most valuable.
53% of Chief Marketing Officers
consider consumer trends, insights and intelligence among their most pressing needs
Create a Personalized Customer Experience
Today’s customers have high demands. According to Salesforce, 76% of customers expect companies to understand their needs. With consumer data, an organization can map their products and services to match priorities, creating an experience that feels more personal. Personalized experiences lead to deeper brand loyalty and a higher customer lifetime value.
86% of customers
base their purchasing decisions on personalized marketing
Integrate Retention Goals with Acquisition Strategies
Many companies believe they can combat a high churn rate with customer acquisition, but continuing to churn through a high volume of consumers is not a sustainable growth strategy. Companies should adjust their acquisition strategies to concentrate on acquiring consumers that will stick with their business, as well as focusing on customer retention. Remarketing efforts that target individuals who share the same attributes as their core users will foster higher retention rates.
Approximately 44% of SaaS companies
have an “acceptable” level of churn
Customers remain with companies that provide industry-leading products and services that meet their needs. Organizations need to create a customer-centric business model that can adapt to changing consumer priorities to keep users coming back. Otherwise, competitors are likely to capture their market share.
Annex Cloud, “Customer Retention in 2019: Driving Emotion with Technology,” 2019
CMO Council, “2019 Outlook + Intentions,” 2019
Cobloom, “Churn Rate: How High is Too High? A Meta-Analysis of Churn Studies,” May 28, 2019
Gartner, “Customer Acquisition Tops 2019 Priorities for Technology CEOs,” March 29, 2019
Salesforce, “State of the Connected Customer,” 2018