Customer Retention leads to a better ROI
Customer Retention is equally important as Customer Acquisition. Companies ought to put retention in their to do lists as company revenue streams apply the theory of pareto principle with 80% future profits coming from 20% existing customers.
Through this dashboard, companies can put solid frameworks in place to nurture and support existing customers. Initiatives like proactive customer support, customised email marketing and encouraging plan upgrades can help build longer term relationships.
Key Terms:
- Retention - The % of customers who stay with the company (typically calculated for a month).
- MRR - Revenue that a company expects to earn every month.
| Goals | Questions to ask | Dashboard views |
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Track customer retention Migrate customers to different subscription plans ensuring growth in recurring revenue. |
How successful are you in retaining your customers? Are your product plan strategies attracting more customers? What is causing customer churn and downgrades? |
Account Retention MRR Corporate/Individual Subscription Type Cancelled Accounts |
- It’s necessary to prioritize existing customer’s retention over acquiring new customers for winning at churn and retention cycle. If the retention is not done right, you can go into loss as you acquire more customers.
- Customer retention rate is the inverse of churn. It deals with only existing customers given the fact that customer acquisition can cost upto 7 times more than retention. Relating churn with retention rate can prove important in developing appropriate customer loyalty strategies.
- Upselling can be a good retention strategy and can be tracked for more revenue from long term customers.
- Comparing revenue across different customer segments can give insights to plan customer centric retention strategies. Some retention strategies can include regular interaction, frequent upgrades, reward programs etc.
- Identifying cancelled accounts for conducting exit surveys can give enormous insights to things that are going wrong currently and can be avoided for future.
Conclusion
Unless companies focus on keeping their existing customers happy, acquiring more customers will not serve any purpose. Regular contact with less risky and high risky customers can help reduce churn greatly and lead to more sustainable revenue for the company.
