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Brand success through Customer Retention

Successful brands are measured based on the high levels of customer satisfaction they have. Good customer satisfaction leads to referrals that lead to new purchases. The satisfaction of the new customers leads to re-purchase / loyalty and in turn leads to customer advocacy that brings higher levels of revenue to the organization

Many organizations focus on new customer acquisitions and believe that this is a great way to grow their business. Little do they understand that the churn affects the revenue and the additional revenue you get from new customers just compensates for the lost revenue. What we mean by churn is how many customers have you lost in that accounting period.

Retaining your customers will help you not only get referral customers / positive perception about your brand but also will increase the revenue because your new customer’s revenue will be an add-on and not a replacement revenue. You will need to have a customer retention rate.

Customer Retention Rate = ((Number of customers at the end of the period – Number of customers acquired during the period) / Number of customers at the start of the period) * 100

Let us discuss a few advantages that strong customer retention will bring you. They are:

More purchases

Having a high CRR will help you get more purchases.  It goes without saying that a new customer will take a few visits to a store or to an e-commerce site to make a purchase. However, a satisfied customer is likely to make lesser visits before they make a purchase. This is because the confidence in the brand is very high.

Brand Referrals

Loyal customers will go around talking about the satisfying experiences they had while purchasing from you. It is a known fact that all of us check for customer reviews before we do a transaction of any sort in an e-commerce situation. Many times, they may also go and refer you to the other people they would know.

Good Reviews

You can request these satisfied customers to write positive reviews that will make your brand very strong. They can write good reviews that will make other buyers purchase your brand.

Good Analytics

You get a lot of data on the browsing and the buying behavior of the repeat customers. You will have a good idea of the patterns of purchase and can come up with a good predictive pattern of the buyers. You will be able to send logical stimuli to your customers.

Reducing costs of Marketing

The purchase cycle has become more complex and long-winding. This is because the customers are confused so much with so many stimuli coming in from multiple channels on the internet. Satisfied customers respond faster and more frequently to your stimuli and would make the purchases. The cost of marketing will come down drastically.

Loyal customers increase your profits

Loyal customers are likely to pay premium prices to the product. The purchases will not be driven only by a discount and the customers won’t look at only the price. They tend to pay higher prices thereby increasing your profits.


Having a high CRR will help you in increasing both the top line and also the bottom line. You should ensure that you increase the CRR by rewarding your profitable customer and build a customer loyalty program. This will help in fostering a long-term relationship with your customers. You will be able to build out a loyal customer base and can drive sales from existing customers.