Examples of retention metrics include:
Repeat purchases: This shows that customers aren’t just one-hit wonders; they come back because they like what you’ve got.
Renewal rates: Especially relevant for services with subscriptions. High renewal rates indicate that people see enough value in what you offer to continue the relationship.
Why is it important to measure retention?
Acquiring a new customer (or user) can cost five oman phone number directory times more than retaining an existing one. That’s a hefty price tag for growth if you’re constantly looking for newbies.
Investing in retention means you’re optimizing your resources, focusing on keeping the users you already have happy and engaged, which is far more cost-effective.
When customers stick around for the long haul, they contribute more to your revenue over time.
This isn’t just about repeat purchases; it’s also about upselling, cross-selling, and even referrals. A loyal customer is like a gift that keeps on giving.
They’re more likely to try new products, provide valuable feedback, and bring in new customers through word-of-mouth.
How to track retention?
The foundation of tracking retention is identifying the right metrics that align with your business goals and customer journey. These metrics will vary depending on the nature of your business (e.g., SaaS, e-commerce, service-based).
Is it a customer making a repeat purchase within a certain timeframe? Is it a subscriber renewing their subscription? Or, in the case of a free app, is it a user returning to use the app within a certain period? Clearly defining this will guide what data you need to collect.
