Customer Retention Analytics

 

Having a robust and extensive customer base is the pillar for the success of any business. Now, business houses are vying with each other in order to grab more attention from the customers which will help them in accentuating their growth. In this steep competitive market if you won’t be able to keep the interest of your target audience alive, then you will certainly lose the competition. A plethora of studies has claimed that a business loses near about 20-25% of its customer base due to feeble customer relationship strategies. So, understanding about the importance of customer service and retention are quintessential for the business houses in their quest for survival.

Customer retention is basically an activity and process that every business house should apply so that they can enhance their customer base and simultaneously, reduce customer attrition. Even a small reduction in the customer attrition rate can make a positive impact on a company’s profitability, so it can be concluded that the customer retention is vital for the success of a business. But unfortunately, only a few companies are paying attention to customer retention and those who are concerned about the retention are staying ahead of their contenders and are thriving even in the tough times.

Why is retention important?

1.       Customer retention will certainly improve your profits. Several studies have claimed that if you are able to increase your customer retention by 5 percent, then this will lead to an increase in profits of between 25%-95% (as per the market study conducted by Bain and Company).

2.       If your customers are happy with your service or product, then they will not look for any other alternatives which means they will remain loyal to your business.

3.       Loyal customers are less price sensitive and can get convinced easily. So, irrespective of any changes in terms of price or service, they will always be with you.

4.       Once your customers are satisfied with your product or service, then they will definitely recommend your company’s name to the others. In this way, you will get many new accounts.

5.       Since your loyal customers are helping you in enhancing your new customer base, hence you don’t need to invest a chunk of money on advertisements. So, customer retention will also lessen your advertising and marketing budget.  

 

Customer retention analytics

Everyday business houses generate a chunk of data about their customers, like their attitudes, product usage, loyalty behaviours and many other relevant information. When it comes to customer retention efforts, companies are trying to leverage all these various types of data to draw the conclusions or insights about their customers. As the retention marketing is necessarily a quantitative endeavour, so business houses need to merge and analyse these data for the betterment of their growth.

Below, we are mentioning some simple steps that every company should follow when they use analytics to enhance their business growth as well as their customer retention efforts.

·         Customer intelligence insight: With the help of data analytics, a company can easily define the customer intelligence insight which will help them to understand the customer’s behaviour in a detailed way. These insights enable the businesses in understanding their customers' preferences. Once you analyse the products, services and media that your customers are using, then certainly you can take the firm decisions and can serve them in a better way.

·         Handle the paradox of choice: Many companies often embrace their customers with too many options and the customers get confused with the choices and hence, the company loses the potential customers. But if you can correlate the collected data along with the customer intelligence, then you can straightway serve your customers with the customized products or services. In this way, your customers will remain loyal to you because they are getting what exactly they are looking for.

·         Customized schemes and discounts: With the data, you can easily get to know how your customers are using your products or services and in order to please them, you can accordingly design the customized schemes or discounts.

·         Solution before complaint: Since now you are blessed with the data analytics, hence you can easily predict any issues that customers might be experiencing with your products or services. This helps the companies be well prepared in advance and provide much faster and effective solutions to their customers. The customers who are planning on switching towards the other products due to the poor quality of the product or the service might stay with the company as the organization has been proactive.

According to the experts, 68% customers leave because they are not happy and satisfied with their current service provider. So, you can understand why customer retention is imperative for businesses. With rising customer acquisition costs, businesses need to analyse and decide on implementing innovative and unique customer retention strategies in retaining their customers. And, undoubtedly customer retention analytics gives this actionable insights in deciding strategies for a successful customer retention.

 

Author Bio:

Sarena George works as a Digital Marketing Expert for Chi Square Academy. Chi Square Academy aims to create a better tomorrow through learning and teaching. The Academy provides courses in Data Analytics and other comprehensive courses that matches job trends from time to time.