5 Myths About Customer Retention

Customer retention is an underrated aspect of maintaining a successful business. All companies understand that losing a customer is bad for the business, but not every company realizes that a returning customer is 2 to 5 times as valuable as a new customer. If you want to maintain your business, you need your customers to keep coming back.

Customer retention programs are the best way to do this. Yet many companies harbor these myths about customer retention that prevent them from creating an effective program. Here are five of the most common myths related to customer retention.

Customer Satisfaction Surveys are Your Only Research Customer satisfaction surveys are important, but they miss a key factor in research – namely, including the customers that have already left your store. You'll need to find a way to not only incorporate previous customers into your research, but track them, and find out how and why people are leaving your company. All Retention is the Same Customer retention is crucial, but it's not as simple as retaining more customers.

Some customers are more valuable than others, and it's important that you learn which customers are leaving and how to retain them. It's possible that you have a system in place that is turning off your best customers and keeping your worst ones. Retention Losses Can Be Minimized By Greater Marketing It costs a lot to attract a new customer.

The value of that customer depends in how well you retain them. So while attracting new customers is important, maintaining your customers is far less costly and creates more value. Marketing more to offset the lost customers is not a strategy that will work out in the long run.

Lost Customers Cannot Be Salvaged Retention may be about keeping your current customers, but your relationship with your lost customers matters as well. Lost customers still can impact your business by sharing their stories with others (customers are far more likely to share bad stories of customer service than good ones) and may even come back if you manage them correctly. That's why any good retention strategy should also include an attempt to salvage relationships with former customers.

Customer Retention is too Complex While it's true, retention can be a difficult subject to measure, there are plenty of ways to calculate the true number of customers you were able to retain. In addition, it should be noted that even in the absence of measurements for retention, you can measure what causes customers to be lost and adjust your business strategy accordingly, indicating that customer retention is still important and valuable. Read more on the value of improving customer retention .