Businesses are struggling to keep up with customer demands and market trends. Customers are always searching for new services that provide better features and benefits. Therefore, to tackle the growing demands and requirements of users, brands need to adopt certain strategies and measures to keep customers engaged with their ecosystem.
Brands know the secret that retaining existing customers is far more profitable and effective than finding a new customer base, primarily in subscription-based businesses. That’s why retention rate has become a new marketing metric in the business world. Brands use retention rates to see how much time their customers invest in a specific timeframe.
According to Survey Sparrow, the top five companies in many industries maintain an average customer retention rate of 94%.
What is the Retention Rate?
Retention rate showcases a specific timeframe in which users interact with customer products or services. It’s a new marketing metric that is widely popular and effective in subscription-based businesses. This metric solely shows how much existing customers are adding to the business’s revenue stream.
What Makes Retention Rate Important?
Businesses use customer retention rate as a metric to estimate the performance of their marketing campaigns and product success. Some of the reasons why it’s considered crucial are:
- Retaining existing customers is far more convenient and profitable for businesses than finding new customers. Retention strategies ensure that brands can leverage more opportunities to scale their revenue and monetize opportunities instead of acquiring new ones that require an entirely different approach.
- Retention rate also helps businesses understand how many customers give up using their products or services. This metric gives businesses an overview of both churn rate and customer lifecycle (CLV). Companies will determine the key areas that need improvement from the brand’s perspective.
- Retention rates signal the effectiveness of marketing campaigns and tell which strategies work best for nurturing relationships. It gives a clear indication to the brand of what measures they need to take to combat certain circumstances. When users leave or churn, marketers need to revamp their marketing efforts to bring actionable changes.
- Retention rates also help brands measure the involvement and performance of customer service. By seeing customers’ stay and usage time, brands can also analyze how certain customer service checkpoints behave in giving helpful recommendations and tips to customers.
How to Improve Retention Rate – 4 Actionable Ways
Some of the ways to improve retention rates are:
Leverage Client Feedback To Improve
When it comes to maintaining existing customers and nurturing relations, analyzing user feedback is essential. Customers’ remarks and responses give valuable pointers on how they perceive your products and services and whether or not they are enjoying the experience. This also indicates how customers are experiencing different features and benefits of brand services.
Businesses need to use customer survey forms to determine how users use their products and what areas of improvement they need.
Improve The Users Onboarding Process
Most of the businesses lose newly attained customers because of ineffective onboarding strategies. Brands don’t know how to enlighten users to get the most out of their product, which leads to users’ disinterest, and eventually, they leave the product or service.
The key approach here is to ensure that users know how to use the product effectively. Therefore, brands educate by incorporating informative videos that teach them how to enjoy all the benefits and features.
Use Product Data to Engage With Customers
Brands can always use product data to understand the behaviors and preferences of their customers. This behavioral data gives the company meaningful insights into how much engagement their product is driving.
For instance, SaaS or fintech products can see which benefit or feature is building engagement with customers and fostering better retention. marketers can pick that particular product feature and further promote it through in-app messaging or email campaigns.
Gives Rewards To Loyal Customers
Rewarding existing customers is far more convenient and efficient in enhancing customer loyalty. Brands launch loyalty programs to engage existing customers and give them rewards based on completing specific actions.
Rewarding customers based on loyalty means sending them complimentary gifts on their multiple orders or sending them free gifts after specific time intervals.
Conclusion
Website retention rate is becoming a new success metric for Business-to-Business (B2B) and ecommerce businesses. B2B brands use client feedback to enhance product features and improve the user onboarding process to keep customers engaged with products. To conclude, brands can only survive digitally by solidifying their relations with existing clients.
