sales
Customer Retention
Keeping the customers you already have. The cheapest growth lever.
Definition
Customer retention is the practice of keeping customers paying and engaged over time. The math is overwhelming: acquiring a new customer typically costs 5-7x more than retaining an existing one. A 5% improvement in retention can lift profit 25-95% depending on the business model. Retention is built through three layers: product quality (the thing works), customer success (proactive support and value delivery), and relationship (account management, regular check-ins, anticipating problems).
In your business
- →Track logo retention (% of customers retained) and revenue retention (% of revenue retained) separately
- →Build a customer success function before you have churn problems - reactive support is too late
- →Run quarterly business reviews with top customers - the conversation alone improves retention