December 20, 2021
The top benefits of customer retention
Let’s start with the basics; what is customer retention? Customer retention refers to businesses’ actions to reduce customer churn and increase engagement with them. Simply say, this means that customers tend to come back if they like the business or the products sold. When customers continue to buy, they help businesses maintain sales and boost revenue.
Customer retention is one of the most important aspects of all businesses because loyal customers are the bread and butter of the revenue. In addition, retaining customers helps businesses save budget, specifically when it comes to acquisition since acquisition costs are 5x higher than retention.
As attractive customer acquisition may seem, the truth is that it is more important to invest time, effort, and resources in maintaining a healthy and continuous relationship with the customers on board.
The two major benefits of customer retention:
- Low marketing cost: Acquiring customers requires many resources and efforts. Focusing on the existing customers reduces the ad spend.
- Loyal customers generate sales: Loyal customers have a connection with the business and trust the brand more than new customers. Since loyal customers are familiar with the brand, they’re also more likely to make repeat purchases. Also, loyal customers are the best ambassadors, which lowers your acquisition costs.
Your existing customers are the most profitable asset your business has. The customers already know your brand, know the product on offer, and appreciate your services. Therefore, concentrating on improving the customer experience and expanding the customer retention efforts can be an effective way to increase traffic and boost sales for your store.