Summary: The following would be a part 4 of 6 part series- where we will dive into the various growth hacking strategies defined specifically for each stage. But wait, stages of what? Read more to find out !
Before we delve into the next stage, a quick recap of “Pirate Metrics (AAARRR)” for growth hacking strategies- divided into 6 stages, which are: Awareness, Acquisition, Activation, Retention, Revenue and Referral.
So after we have created enough “awareness” of the product and brand within the target audience, and moved onto “acquiring” customers . Have the customers download the app to use the product/service once, it's time to “activate” the customer into a regular customer. Now comes the moment of truth. Does the customer stay?
Stage 4: Retention
How many potential customers will stick around?
At this stage it’s important to retain the acquired customers. Retention means people regularly come back to use the product. For an e-commerce company, that means multiple purchases from the same customer; For an app, that translates to users continue opening/ using the app; For a SaaS business that would mean continued subscription to use the software.
The next stage has a clear goal to retain the customer and have them become a repeat-buyer. As a business, you want to keep your leads as close by as possible after they have purchased your products or signed up for emails. It's more pricey to bring in a new customer, than to retain an existing one. The questions to be answered at this stage are:
The opposite of customer retention is the customer churn, which is the rate at which customers leave (ratio of customers leaving : total customers). It's an important metric to track as it shows whether the product has achieved a market fit. If the customers are dropping off early, something needs to be worked on: product or communication.
“Your most unhappy customers are your biggest source of learning” ~ Bill Gates
Growth Hack Strategy for Retention:
According to Harvard Business Review , it’s 5 to 25 times more expensive to acquire a new customer than to retain an existing one. It is a lot cheaper and easier to cross-/up-sell or sell again to a customer you’ve already acquired before, than to a new customer.
Make sure the customer churn rate is lower than customer acquisition cost, to achieve growth.
Maintain consistent communication with your existing customers through email, alerts, notifications and surveys about product enhancements.
If you have a digital presence on social media platforms, reply to customer feedback, criticisms and posts to keep them engaged.
FREE-MIUMS. Who doesn't love free stuff? Reward your loyal customers through free-bies, but with defined restrictions such as no. of downloads possible, setting a cap on specific action, time limited offers/ discounts, etc.
Conclusion: Retaining customers is the most inexpensive but vital part of the retention step. As a business, you want to keep your leads as close by as possible after they have purchased your products. This isn’t just for posterity — acquiring a single brand new customer is several times more expensive than keeping an existing one. It’s pricey to bring in new customers.
If you can assure your customers of consistency in product delivery, they will have no choice but to stick around..!
Tune in for the part 5 of this series coming next!!