The most effective way of building bottom line growth in your company is not a sales technique. It’s not a catchy gimmick, or hot mobile application. No, the most effective way to grow your bottom line is to increase your retention rate. Too many businesses chalk up their churn to the “cost of business” or “you can’t please everyone”, and while that might have some validity, most companies are far from the apex of that rate with their customers. They leave hundreds of thousands of dollars on the table each year in terms of bottom line profit. Are you one of those companies?
Profitable Customer Retention Focus
Having a customer retention focus has a lot to do with your overall focus on customer experience. Acquisition marketing has a lot of great attributes and is one of the strongest growth elements of a brand or company. But it will all be for nothing if your product and customer experience are poor. Why spend ten dollars to acquire a lead, when you won’t pay the two dollars a year to nurture them in your company? That 80% cost differential is the make or break growth number for many companies.
The customer retention focused marketer will also have a benchmark for a customer’s lifespan in the company. Do you have an average lifespan metric in your company? How long does the average customer remain a customer? Know it, post it on your wall, and make it part of your marketing dashboard. Right along with LTV, you can create some amazing forecasts on growth if you can align these two numbers.
Are you interested in capturing the profit that goes along with lost customers? Check out our retention growth calculator and see how much money you are leaving on the table. Additionally, check out our post on customer retention being 15% of your budget, and start thinking strategically about retention as the missing piece of your marketing plan.