The uncertainty that seems to cloud the economy puts businesses in a peculiar place. Companies must reevaluate their marketing and engagement strategies to stay relevant and resilient.
Product and marketing professionals, engineers and C-suite executives are aware that they need to adjust their marketing and engagement strategies for 2023. However, according to a OneSignal report, many still allocated more resources toward customer acquisition than retention. This trend is a concerning one. Acquiring a new customer can cost five times more than retaining an existing one, according to the report. Ignoring retention strategies is a missed opportunity for ROI and revenue growth.
Let’s look at internet providers as an example.
For internet providers, focusing on retaining existing customers is more cost-effective compared to acquiring new ones. Acquiring new customers often entails substantial expenses for marketing and promotions. By nurturing and satisfying their current customer base, internet providers can maintain a steady revenue stream while reducing customer acquisition costs.
Customer retention provides a competitive advantage in the internet service provider industry. Satisfied customers are more inclined to recommend the service to others and are less likely to be swayed by competitive offers, contributing to the provider's market position and long-term success.
Customer retention mitigates churn. High churn rates can result in revenue loss and increased expenses associated with acquiring new customers. By actively focusing on retaining customers, internet providers can reduce churn and enhance the overall lifetime value of their customer base.
Key point is that satisfied customers, no matter the industry, tend to share positive experiences online and offline, boosting the company’s reputation and attracting new customers. Dissatisfied customers can damage a company’s image through negative reviews and word-of-mouth.
By prioritizing customer retention and consistently delivering excellent service, companies build a strong brand reputation that fosters customer loyalty and trust – which increases ROI and prompts revenue growth
"Companies need to resist the urge to make cuts in the wrong places. Customers expect highly relevant, timely, and personalized communication and engagement at every touchpoint - this should be your customer retention strategy for the market we're in right now," said George Deglin, CEO of OneSignal. "In a tight economy, increasing customer retention rates by just 5% can increase profits by 25% to 95%.”
Based on that stat provided by Deglin, many can see why 95% of survey respondents said customer retention was very important or somewhat important to their business and 71% said customer retention will become more important in the next three to five years.
With that said, they need to act on that mindset and actually allocate funds toward customer retention instead of customer acquisition.
Edited by
Alex Passett
