Here’s Why You Need To Start Retaining Your Customers Before It’s Too Late

On average, it costs six times more to acquire a new customer than to retain an existing one. According to a McKinsey study, repeat e-commerce customers spend more than double what new customers spend. And according to CrazyEgg.com existing customers also spend 31 percent more than new leads, and when you release a new product, your loyal customers are 50 percent more likely to give it a shot.

All in all, Customer retention is important because it increases your customers’ lifetime value (CLV) and boosts your revenue.

So, what’s Customer Lifetime Value (CLV)?

Customer Lifetime Value is one of the most important metrics to measure and monitor when scaling a business. CLV is a metric that indicates the total revenue a business can expect from a single customer throughout their time engaging with a business. The longer a customer continues to purchase from a company, the greater their lifetime value becomes.

CLV is important to measure because it directly affects your revenue and can signal customer loyalty and retention. At the end of the day, customer retention and monitoring CLV helps you build better, long-lasting relationships with your customers. Ensuring customers stick with you throughout your business life cycle will not only increase profits but yield higher positive word-of-mouth referrals (hello, free marketing!).

So, how can business owners focus on customer satisfaction and retention?

To achieve customer loyalty, prove your customers are important to you through rewards, social media shout outs, and personalized communication. Customers that trust companies they do business with are more likely to purchase again in the future and recommend to others.

Note that customer retention doesn’t improve overnight. However, by implementing a few solid strategies, your existing customers will be excited to continue doing business with you.