Why is it important to retain your customers?

Whether you have just stepped in the business or have been in it for a while, you might have heard that the ad space is getting more competitive and expensive over the years.

However, that’s not the case! The reality is that paid acquisition is no longer a winning strategy. If you want to grow your business sustainably, it takes more than acquisition. Also, without customer engagement and retention, your business is bound to flatline over time.

Customer retention is incredibly important for any business to grow. You must know what it is and why it's important for your business. The approach of tracking your loyal customers can make or break your business.

On the whole, customer retention can improve your average customer's lifetime value and your ability to sustain more customers over time.

While the acquisition strategy can easily promote increment in your revenue, customer retention is as easy as it seems. However, within six months, you can start to see the benefits of customer retention.

Before actually taking a plunge into customer retention, consider how long you’re planning on running your business. Even a small change can set the stage for massive improvements over time.

Customer retention improves exponentially over time

Customer retention is not a quick fix but a long-term benefit for businesses. By planning for retention-driven revenue, you can understand its value.

The longer you work on building a retention strategy, the more it pays off. Even small changes in your customer retention strategy lead to massive results.

You are probably trying to improve repeat purchase rate, and customer lifetime value by retaining your current customers. However, when you are trying to improve customer retention, you need to consider few metrics, such as:

Purchase frequency compels existing customers to make more than one purchase. This frequency can only be increased unless you are selling something that your customers actually need every day. With this approach, the chance of them making their second purchase immediately, is reduced.

The repeat purchase rate is calculated based on purchase frequency. This purchase rate measures the percentage of customers making more than one purchase with you.

Customer lifetime value should be as high as possible because longer rime span ensures success of business.

If you invest some time on each of these metrics, it will become a way for you to lay a sustainable, profitable base. And this base will help you multiply your business over time, no matter what stage you’re in.

Fuse customer retention into the big picture of your marketing strategy

When your business grows, your marketing strategy evolves altogether. For this reason, you should have different objectives at every stage.

Customer retention can easily be blended into your business’ growth plan. Let’s see how:

Stage 1: Initial point – You can build customer retention by simply maximizing revenue for every customer you acquire.

Stage 2: Getting customer traction – Customers who have already discovered your brand aid your retention strategy and improve the experience for those who are just getting to know you.

Stage 3: Uniform sales — Dig into the ongoing profitability of the business that allows you to draft a customer retention strategy. This strategy further helps you invest in the relationship you have with each of your customers.

Emphasize on your customer retention strategy once you get consistent sales because it is an effective way to push your success forward.

Along the same lines, with loyalty software, you can introduce the power of retention tactics like loyalty programs, re-engagement marketing, and value-added marketing to improve your overall customer experience. These retention tactics work together to improve customer retention at every stage of business growth.

When customers already love your brand, these retention tactics perfectly complement other factors like your customer support, product quality, and branding. Each of these elements impacts the way your customers feel about your brand and ultimately determines their next purchase.

The customer retention strategy ultimately guarantees that your business will continue to grow over time. Most importantly, with retention, you don’t need to invest only in ad space. You start investing in what really pays off.

Customer retention is a way of thinking, not a single action or decision

With an effective customer retention strategy, you can achieve the overall goal of winning the loyalty of more of your existing customers. Also, by integrating a combination of retention tactics and tools into the business, you can unlock infinite success for your business. 

On the whole, customer retention is not bound to a single decision you make. Instead, it’s simply the result of combining other customer acquisition and engagement strategies that help you encourage more customers to choose you over your competitors.

With a loyalty software program, like Loyera, you can make a bigger plan to acquire, engage, and retain more customers to the business.