Are you often wondering which Day of the week your average sales are the highest?…
Whether the type of business you are in, customers are your backbone. Without customers, no company could survive. The dilemma many business owners face is whether they should focus on acquiring new customers or indulging returning ones. For some businesses, this is a brainer; any customer is a good one. But we must be honest; Returning Customers need a particular focus for most companies, especially those in eCommerce and Retail.
Let’s check a bit more about how are returning and new customers, what is retention rate and why it is so important.
New customers are customers that placed their first order within the defined period. The beauty of a new customer is that it can become a returning customer.
A returning customer has bought your product or service once before and has returned to make another purchase. Of course, there’s no time limit on what counts as a returning customer. If someone made their first purchase with your store one year ago and only made their second purchase last week, they still count as a returning customer. Shorty, we treat them as returning customers on the second purchase. For Returning Customers, we often say they are essential to any business because they:
- have a higher CLTV
- spend more
- promote your business
Retention Rate – What does it mean?
Retention rate refers to the percentage of customers who continue buying a product or service over some timeframe. It is a critical success metric for any subscription-based business (for example, SaaS software providers and companies whose customers repeatedly buy the same products).
For businesses that sell products to customers only once over a long period (for example, car or refrigerator manufacturers), the retention rate is a less relevant success metric. But suppose these companies also sell an ongoing service to support their products, such as a warranty or maintenance agreement. In that case, the retention rate can be essential for success in selling these add-on sales.
Why is a high Customer Retention Rate so important?
Many entrepreneurs and business analysts believe customer retention is the most crucial metric to determine a company’s success. High customer retention means customers of the product or business tend to return.
Spending more on different retention strategies (providing better customer service or starting customer loyalty programs) can help you win more loyal customers.
Want to know what is your Customer Retention score?
Like for many other questions, Analytics BusinessQ has a solution for this as well. Recently, Analytics BusinessQ has started implementing AI-powered reports that offer very special analysis. One of those new, super attractive reports is the Customer Retention Analysis.
To access it, open AI-powered reports and choose the Analysis. As soon you get the values, you will have your data ready. You only need a few minutes to get this data ready for you.
For more information about the analysis and how to access it, please check our FAQ pages.
As always, we want to hear any suggestions you may have. After all, we are building this app for you.
We hope you are as excited about the new changes as we are.
Have any new ideas or suggestions? Write to us!
Your Analytics | BusinessQ App Team