Customer churn has a devastating effect on businesses. On the flip side, it is estimated that a 5% increase in customer retention can lead to a 25-95% increase in profits.
When a customer churns, it not only means a lost deal in the short term—it also means another competitor gains a long-term asset and can expend that asset improving their products. Every business loses customers. But it’s the quality and rate of your attrition that can kill your business growth. The higher the churn rate, the more money you lose every month.
The consumer lending business has one of the worst customer retention rates of any business. Borrowers are more likely to consider refinancing options whenever existing mortgage deals revert to a standard rate. So, lenders must be vigilant at the threat of losing their current borrowers.
Why is customer retention crucial to business?
Customer retention means that a single customer will continue to buy from you over several years – which is described as the Lifetime Value (LTV) of your customer. Customer retention measures not only how successful a company is at acquiring new customers, but also how successful they are at satisfying existing customers.
Customer churn is a crucial matrix for businesses that want to survive.”
There are a few reasons why customer churn is crucial to business:
1. Affordability: It’s 5-25X more expensive to acquire a new customer than to retain an existing customer.
2. ROI: A 5% increase in customer retention can increase company revenue by 25-95%.
3. Loyalty: Retained customers buy more often than newer customers.
Customer retention will not improve overnight. To increase retention, understand why you are losing the existing customer, and what stops them from returning. However, if you have a few solid strategies up your sleeve, you can coax repeated customers more.
Customer retention strategies
1. Get feedback from customers
2. Create personalized customer loyalty schemes
3. Predict customer churn rate from historical data
4. Improve customer experiences across channels
How Insight Consultants can help
The good news is that by leveraging the power of AI and Automation, Insight Consultants can help your businesses to retain a customer for life.
1. Create customer loyalty schemes through AI-powered segmentation
2. Add Intelligent automation to existing IT systems for a personalized customer journey
3. Identify and score churn indicators through Predictive Modelling
4. Share customer performance through reports and dashboards
We believe that with us, you can make great and useful changes to your customer retention. Take a small step and Talk to us and begin your retention journey now!
