The Importance of Customer Retention and Brand Loyalty

Acquiring a new customer can cost 5X more than retaining an existing one. For a business, its greatest marketing resource can be its current customers. Customer retention can predict current customer satisfaction, repurchasing decisions, and customer engagement.

It is crucial to focus on and implement as many resources to retain existing customers as to sell to new customers. This will not only enhance brand loyalty but overall help ROI because your current customers are your business’s gold mine. It is more than answering emails and helping with onboarding tasks but about creating a relationship from the start that promotes strong communication, trust, and mutual expectations.

Here is a breakdown of customer retention and tips for your business to implement strategies:

Why Customer Retention Is Important For Business

To be clear, the process of gaining new customers is valuable and necessary to grow your business but sometimes companies direct all their marketing efforts solely toward recruiting. Maintaining clients and ensuring they are recurring customers is necessary and inexpensive. Recurring customers not only are willing to spend more for a brand they are loyal to, but they are more likely to refer the business to friends and family.

If a customer is satisfied with the business, they will bring in new customers free of charge. Most brands do not realize the impact current customers have on their marketing efforts. Although, if a business does not implement a customer support strategy and is proactively supporting its existing customer, they will not stay loyal.

How To Measure Customer Retention

1. Determine Your Success Objectives

To improve something you need to figure out what it is that needs to be improved. Are customers' life cycles too short? Is it taking a while for customers to repurchase? By asking yourself similar questions you will be able to determine what the potential customer retention problem is. Once the problem is identified, you can determine what success means to your business.

For example, if you want the customer life cycle for your business to be X, then you can track your achievements more accurately. Determine what areas of your business need focus, therefore, you can spend more time and resources measuring things that matter.

2. Identify A Way to Achieve Your Success Objectives

Once you determine what success means to your business you need to implement a plan to get there. Customer retention is ideal for determining how well customers like your business. Do not hesitate to offer customer surveys or other ways to share their opinions and