Retention marketing refers to all those marketing actions and activities focused on retaining and building customer loyalty for a certain period of time.
To discover the best loyalty strategies, marketing analysts must periodically evaluate, among other indicators, the retention rate .
So, the retention rate is a metric that indicates how many new palestine business email list customers were acquired and how many were lost in a given period of time. Then, it is necessary to discriminate the reasons: due to non-payment, cancellation or non-renewal of contract, among other options.
How to calculate the retention rate?
The retention rate formula is as follows:
[(Customers at end of period – New customers acquired during the period) / Customers at beginning of period] x 100 = percentage of retained customers
Customer retention generates great economic benefits for companies, since it is more convenient to maintain the relationship with existing customers than to carry out actions to attract new ones. Let's look at some reasons:
Better acquisition costs: Acquiring a new customer can cost 5-25 times more than retaining an existing one.
Loyalty: loyal customers know the value that a service offers and continue to trust it. According to a study by Invespcro , repeat customers can spend up to 33% more than new customers.
More recommendations: satisfied customers recommend the brand to their acquaintances, friends and family, which will bring more users to the company.
According to HubSpot , acquiring a new customer can cost up to 5 times more than retaining an existing customer. (Source)