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Retention Adam v2021
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Overview

Developing a customer retention strategy

3 tactics to drive customer retention

Understanding customer service and experience

Creating KPIs to measure customer retention

Resources we love

Growth

10 MIN

A Startup Founder’s Guide to Customer Retention

The ability to acquire customers has long been held as the standard of success. And it’s true: any successful business needs new customers to fuel their growth.

However, what’s become abundantly clear is that new customers alone won’t deliver long-term value. Here’s why:

The cost of customer acquisition has gone up. It was relatively inexpensive for companies to acquire customers through Facebook advertising over the last five years. But in the last year, social media advertising costs have steadily increased.

Investors are paying close attention to gross margin and profit. These days, it’s more important to be a sustainable business rather than a flashy one. Even before startups turn a profit, customer retention has become an early indicator of staying power. Take Peloton: Since its IPO in September 2019, the company has maintained an extraordinary 94% customer retention rate, among other strong indications of customer engagement and loyalty.

It has become clear from big companies’ work on customer retention that managing your margin requires keeping your existing customers. Existing customers are more profitable than acquiring new ones. What’s more, loyal customers will drive cumulative margin over time and build your brand.

Clearly, the focus on balancing customer acquisition and retention has changed. Loyalty leaders —companies that excel in fostering long-term relationships with their customers—grow revenues roughly 2.5 times as fast as their industry peers, according to research in Harvard Business Review. Other research has shown that by increasing customer retention rates by only 5%, a company can increase its profits by 25% to 95%.

This guide will take you through how to develop a customer retention plan:

1

Developing a customer retention strategy

2

3 tactics to drive customer retention

3

Understanding customer service and experience

4

Creating KPIs to measure customer retention

5

Resources we love

We’ll also share brass-tacks strategies you can use to build long-term, loyal, and valuable relationships with your customers. Let’s get started!

Growth

10 MIN

A Startup Founder’s Guide to Customer Retention

Adam_DSC0273-fin.jpg
By Adam Domian
Lizzie_DMF0431_final.jpg
By Lizzie Francis
Retention Adam v2021
Share
What's inside:
Done Icon

Overview

Developing a customer retention strategy

3 tactics to drive customer retention

Understanding customer service and experience

Creating KPIs to measure customer retention

Resources we love

The ability to acquire customers has long been held as the standard of success. And it’s true: any successful business needs new customers to fuel their growth.

However, what’s become abundantly clear is that new customers alone won’t deliver long-term value. Here’s why:

The cost of customer acquisition has gone up. It was relatively inexpensive for companies to acquire customers through Facebook advertising over the last five years. But in the last year, social media advertising costs have steadily increased.

Investors are paying close attention to gross margin and profit. These days, it’s more important to be a sustainable business rather than a flashy one. Even before startups turn a profit, customer retention has become an early indicator of staying power. Take Peloton: Since its IPO in September 2019, the company has maintained an extraordinary 94% customer retention rate, among other strong indications of customer engagement and loyalty.

It has become clear from big companies’ work on customer retention that managing your margin requires keeping your existing customers. Existing customers are more profitable than acquiring new ones. What’s more, loyal customers will drive cumulative margin over time and build your brand.

Clearly, the focus on balancing customer acquisition and retention has changed. Loyalty leaders —companies that excel in fostering long-term relationships with their customers—grow revenues roughly 2.5 times as fast as their industry peers, according to research in Harvard Business Review. Other research has shown that by increasing customer retention rates by only 5%, a company can increase its profits by 25% to 95%.

This guide will take you through how to develop a customer retention plan:

1

Developing a customer retention strategy

2

3 tactics to drive customer retention

3

Understanding customer service and experience

4

Creating KPIs to measure customer retention

5

Resources we love

We’ll also share brass-tacks strategies you can use to build long-term, loyal, and valuable relationships with your customers. Let’s get started!

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