Changing the Customer Retention Game with Predictive Analytics
Dec 10, 2018
The value of a loyal customer is unmatched as one of the keys to a business’s success and growth. Customer retention involves the actions that are taken by a company to keep their customers coming back for more, starting with the first customer interaction and continuing throughout the entire relationship. While customer acquisition is vital, organizations often underestimate the power of customer retention. Evidence shows that retaining customers is not only less expensive but yields far better ROI. In other words, customer acquisition requires spending money to make money, while maintaining existing customers can be a simple set of actions to improve a customer’s experience.
Customer retention is not as simple as it may sound. It varies from company to company as well as customer to customer. Additionally, in most industries, customers do not inform you whether they are staying or leaving. The use of analytics in customer retention will provide insight into which clients are at risk of leaving, which actions should be implemented, and the key factors in client relationship attrition and strengthening. Analytics are a valuable tool in making sense of the data necessary for preventing loss and facilitating the growth of the relationship. Using predictive analytics, organizations can estimate, evaluate, and fine tune models to identify client personas, current customer interactions and areas that clients can make improvements to increase customer retention and growth.
Three Key Benefits to Improve Customer Retention Using Analytics
- Growth: Keeping existing customers allows for more sustainable growth. A focus on keeping customers builds relationships with those customers resulting in improved profits.
- Easier upsell/cross-sell opportunities: Your existing customers are easier to market and sell to, which results in low costs associated with selling new products or services to your existing customer base.
- Reduced cost to acquire customers: It is much cheaper to keep existing customers than to acquire new ones, so taking care of current customers is key.Learning why customers stay and why they leave helps you retain the right customers.
Trust and familiarity are built upon through years of positive interactions and solutions. This is the reason that industry leaders rely on analytics to map out a customer’s experience from beginning to end; highlighting key factors that cause them to either stay or leave. Failing to consider the complete customer journey risks coming to the wrong conclusions. Creating a data-driven process will help companies accurately identify the necessary decisions to create a high customer retention rate.
To explore using analytics to increase overall customer satisfaction, contact us here.