In this data-driven age where everything is broken down to and measured by numbers, it is a startling statistic that acquiring a new customer costs 7 times more than retaining an existing one! That fact alone should be sufficient to emphasise the criticality of customer retention. Yet, more than 50% of companies and brands have greater focus and emphasis on customer acquisition compared to the mere 16% that focus and emphasis on customer retention!

 Why Customer Retention Becomes Even More Important…

 Since existing customers contribute 65% on an average of a company’s business and are also 50% more likely to try out new products, evidence is clear that retaining customers should be the dominant strategy for any brand or business. However, nowadays, customer retention becomes even more important primarily because of the following 4 reasons. 

1. Gen Z, the latest generation which is becoming adults, is the potential customer group for almost all businesses. This generation is very experimental in its mindset and are immune to the traditional marketing strategies for customer-retention. They have the least brand loyalty among all the generations so far. They are also the most diverse generation racially and ethnically. Naturally, they have forced businesses to completely rethink strategies on how to retain them. 
2. The Covid-19 pandemic has made the world more virtual and digital with multiple competitors lurking just a click away from customers. In this aggressive and predatory scenario online, customer loyalty is possibly the brand’s/business’ only defence. 
3. Sensing the shoppers preference for brands and businesses that run loyalty programs, more and more businesses and brands are coming out with such programs. Therefore, loyalty programs are slowly becoming more of an expectation rather than something that delights the customer. This will force brands to think deeper and innovatively to retain customers. 
4. From 0% a few months ago, the chances of a global recession exacerbated by inflation is close to 40% in 2022-23. Everyone cuts back on spending (especially on discretionary items) and the least affected brands will be those with the highest customer loyalties.

The Key To Customer Retention

A whopping 89% of companies agree that the most important factor driving both customer loyalty and customer retention is the customer experience. Customers have been so pampered these days that they expect delightful experiences throughout the purchase and service journeys.

Creating an experience that is more immersive and engaging, rewarding the brand pioneers and first users, inspiring and motivating consumers beyond the product/service, making shopping fun by taking it social and finding newer ways and means to save the consumers’ time will all make for a delightful customer experience. That in turn will enhance their loyalty and boost your business’ fortunes.