the ripple effect of customer retention
Keeping a customer longer doesn't just make your churn numbers look better. Customer retention has a ripple effect across your business. Including the bottom line.
Keep them longer and Grow Your Customer Lifetime Value (CLTV). When customers stick around longer, that means more recurring revenue. The higher your CLTV, the better your return on your cost to acquire the customer. Put simply, the longer they stick around the more profitable they are for you.
Happy customers talk and Build Your Brand Reputation by telling friends. Happy, long time customers are more likely to leave reviews. They tell colleagues. They take you with them when they change companies.
Customer insights help you Stay Ahead of the Competition. The closer we are to our customers, the more they share. Imagine a direct feedback loop between your top (and most valuable) users and the product team. It'll take a lot of guess work out of the ol' roadmap.
Insights are nice. But what are you going to do with them?
Stay on the front foot. Invest in proactive customer success. Monitor customer health scores so you can catch problems early. Guide customers towards success with a tailored plan that you share with them.
Don't make customer success teams the only ones responsible for customer success. Arm support teams with customer health data to personalize responses to issues.
Make customer success important. It's easier for bigger companies and teams to have dedicated success teams, sure. Empower sales, marketing, support, and product, to help customers get value from your products. That can be with the right tools or even the right encouragement from founders and leaders.
Making customer retention (ultimately customer success) a priority creates ripples across any company. Keeping customers longer is a great way to grow a healthy company.
As Wayne McCulloch says in 7 Pillars of Customer Success, "customer retention is one of the simplest ways to achieve profitability."
Don't treat'em mean to keep'em keen. Do what you have to to keep'em around. Your P&L will thank you.
Peter
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