Customer Retention Marketing Statistics

Customer Retention And Why It Should Matter?

customer retention tacticsWhat is customer retention and should it matter to you? think of online business as a snowball atop a hill. When you first start your online business core is small, core meaning your customer base. As each month passes your core should become a little larger, the snowball is growing. Then snowball here represents your customer loyalty/base. That you overall revenue should grow each quarter or year by a specific percent because after all the hard work you have done to acquire this customer and earn their trust a percent of them will come back right?

Certainty your core customer base should grow if you are selling a commodity-based product should it not? Something like shipping supplies, eatables, or household product with a part that is consumed over time like a refrigerators water filter. Well even if your business is not a commodity business, your product is used up over time you have more than a single item, something that people would find interesting enough to purchase? Now this snowball, or core customer base, might grow slightly over time but not the way it should with some effort. We all know acquiring a new customer is much more costly than keeping an existing one. Forbes did a study that puts the cost of acquiring new customers at 5 times the cost vs. retaining existing ones. There are several additional studies that even push that number to 8-9 times the cost.

Retention Rate Study of ECommerce Businesses

So, what is your retention rate? Is retention rate a statistic your company is monitoring? What would you guess is the average retention rate if you had to guess? Well we have some answers thanks to a new study conducted by Omniconvert

Let’s get right down to the numbers by starting off with the study itself looked at 450 eCommerce companies that cut across a wide range of industries and whose yearly revenue ranged from less than a million dollars to over five hundred million dollars. Is should not be a shock that over 80 % of the companies that took part of the study indicated they are facing high and downright brutal competition in their business vertical. Also probably as expected the higher yearly revenue a company had the more attention and resources were devoted to focus on customer retention.

Here are some additional statistics about companies are approaching customer retention currently.

ECommerce Companies Statistics On Their Retention Rate Programs

70%

Of Businesses Total Marketing Budget 70% Is Devoted To Acquisition & 30% To Retention.

50%

The Total Revenue Of 50% Companies Surveyed Is Less Than $10 Million Annually.

34%

Of Businesses Surveyed Only 34% Have Someone Who Is Monitoring Customer Retention Rates.

<30%

Of Businesses Whom Monitor Retention Say Their Retention Rate is < 30%.

29%

Of Businesses Surveyed Only 29% Are Satisfied With Their Retention Rates.

23%

Only 23% Of Companies Monitor & Use Net Promoter Score Optimize Retention

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