What is Customer Retention?
Customer Retention, or the process of keeping customers, refers to the measurement of customer loyalty or how well an organization maintains its existing customers over time.
“Increasing customer retention by just 5% can boost profits by up to 95%” – Harvard School of Business. Meanwhile, “the cost of acquiring a new customer is five times higher than the cost of retaining an existing customer” – Gartner Group.
So, there is no reason not to focus on “our existing customers.” With PangoCDP, increasing customer retention goals becomes more feasible through data-driven strategies and automation.
The 80-20 Principle
“80% of future sales come from 20% of current customers” – Gartner Group.
Not all customers contribute equally. The top 20% of customers who are satisfied with their first purchase are likely to make a second purchase, and those who make a second purchase are more likely to become repeat buyers of higher-value products. Our task is to focus on increasing this top 20%.
How?
First of all, You need to find out what this 20% has in common:
- Who are they (demographics)?
- Through which channels do they engage with us (Customer Journey)?
- Which pages do they visit on our website, and where do they spend the most time?
- How long does it take for them to make their first purchase after initial exposure to ads?
- What was their first product purchase; what were their second and third purchases?
- What is the purchase frequency?
- What is the average order value?
In addition, you should also pay attention to the indicators that help predict their ‘stay’ rate:
- Probability of repurchase
- Churn rate
- Rate of customers who have not returned for a specified period
This is important information to help you understand the customer segments who need targeted attention. From there, develop a suitable retention strategy to achieve high effectiveness.
With the ability to unify customer data, combined with powerful tracking and segmentation tools, PangoCDP can help you generate the desired customer lists.
Next, choose strategic products to target and segment customers into smaller groups for personalized service.
Segmenting customers allows for effective retargeting at the right channels and times, providing them enough time to experience your product and addressing their needs for future purchases.
You can confidently manage and care for multiple customer groups across various channels, as everything is done automatically through DMA (Digital Marketing Automation). Scenario design and automated campaign execution tools make it easier than ever to implement and monitor campaigns.
This is just a tip to ensure you don’t overlook any potential customers. Start your customer retention plan by exploring customer data with PangoCDP.
If you have any questions about customer retention strategies for your business, please contact hi@bytetech.io for answers.
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