Retaining an existing customer is more challenging than acquiring a new customer. The majority of the marketing world focuses completely on customer acquisition. However, concentrating more on customer retention will yield better ROI results and might cost around 5-25X lesser than new acquisition.
This blog will offer deeper insights into why customer retention matters and what are the powerful methods of customer retention analytics that can help you an immediate enhancement of customer retention.
Customer retention is a sequence of actions that businesses take to minimize the count of customers who leave and focuses more on retaining maximum loyal customers. Indeed, the initial step in retention strategy starts with customer interaction, the continuous relationship of the customers is based on the strategies. This is where the role of analytics plays a vital role. For instance, businesses like an eCommerce site can yield the benefits of analytics to collect and figure out key sales data. They can acquire a valuable insight to make better retention marketing strategies.
However, any business cannot wholly rely on analytics to boost customer retention. Analytics can give you better insights, what matters most is the action you take.
Just a 5% boost in retention will increase the overall company profits by 25% – 125%. Yet businesses struggle with retaining the customer or underestimate the revenue impact of customer retention. Most eCommerce companies are able to retain over 20% of their customers. The average mobile app is able to retain only 10% of its users over a month of usage.
The percentage of your users retained during a certain period of time measures the customer retention rates
Analytics could play a huge role in eCommerce sites. It enables businesses to make better strategies by providing customer profiles, preferences, wish lists, etc. By sending appropriate notification of the preferred products, or sending the notification of the product added in the cart, but not purchased can help business in sales conversion,
A complete user profile will give you a comprehensive understanding of the customers— everything from preferred products to demographics to transaction history. This will play a huge role in designing user-centric campaigns, according to customer interaction across all devices.
Here are some tactics to make better campaign:
Dividing the active and inactive customers is very generic and basic. This information will help you to determine the sector in which you should concentrate more, hence, if you want an effective marketing strategy to engage your customers, you should dive deeper and go beyond this basic grouping.
Analytics tools help businesses in automatically grouping users based on the frequency of their engagement with your brand. This allows the business to actively interact with customers based on what they require.
– Customers with low frequency and high recency need more information about your brand as they are not familiar with your brand. Hence, you can send more notification and alerts to engage your customers.
– The second category is the customers with high frequency and low recency are familiar with your brand but do not engage much. These customers need a little push to make them stick to your brand and make purchases again. Making special campaigns and promotions is better to spark interest in them.
– Customers with high engagement rates are the ones that have the highest chance of a conversion. For instance, Attractive promotions, subscription offers, and great deals can trigger their interest to make the next purchase.
– Long time relationships with customers are great rewards. These users are your loyal customers. Besides, by bringing some attractive reward programs, offers, referral discounts, or token of appreciation will make them fall in love with your app again.
The biggest problems of mobile apps are customer retention because over 71% of the customers leave the app in the first 3 months. In this case, Funnel Analysis enables the business and app developers to generate the statistics of the user journey with the mobile app. It also helps in highlighting the point where customers are converting and the dropping point.
Identify the key conversion: Indeed, the customers with complete information about the location, mobile number, or provide complete profile information are the potential customers who can be targeted as sales conversion
Monitoring funnels and making comparison offers information on the various demographics and influence app growth tactics.
Dollar Shave Club is one of the popular brands with a powerful customer retention strategy. In fact, the start-up video was one of the remarkable ones. For this reason, Unilever offered $1 billion in the acquisition of this company
The USP of Dollar Shave Club?
– Active users and subscriber over 3 million
– High focus on customer retention
– A deeper and better understanding of customers
Dollar Shave had always been ready to invest more in technology and analytics that could help them in boosting customer retention rates. In fact, the in-house CRM system is integrated with data analytics and customer support platforms to develop a rich and efficient understanding of their customer base.
The brand now has more than 3 million subscribers who are now happy customers and compelling brand advocates.
Analytics can focus attention on the big opportunities to boost customer retention by addressing critical issues or questions such as:
– Which interaction with customers shows meager customer experiences and sub-par retention?
– Which user segments seem to churn?
– Are there user segments with retention problems that can be targeted for immediate resolution with maximum revenue impact?
– Does targeting the wrong sectors can lead to a minimum retention rate?
Metrics are just information that helps you in understanding your marketing results, customer base, and preference. What matters the most is the action that you take or complete understanding of what the analytics means and how to use it.