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When It Comes To Growth, Customer Retention is Everything.

By January 14, 2021No Comments

These days, it seems everyone is on the search for and seeking growth. We now hire ‘growth marketers’ and ‘growth hackers’ to help scale businesses. However, the key to real growth is in the customer retention.

Acquiring a customer is GREAT. When you see a first-time order from a customer, it’s a great feeling. However, what feels even better and great for growing a business is seeing that 2nd, 3rd, 4th etc from the same customer.


The job of a growth marketer is to find the channels and strategies to increase revenue. Ultimately, the as a growth marketer you should be able to find new and innovative ways to increase revenue and meet company goals.

Growth Marketing is the process of designing and conducting experiments to optimize and improve the results of a target area. If you have a certain metric you want to increase, growth marketing is a method you can utilize to achieve that.

But, as a growth marketer, the way to growth is through retention as well and that needs to be said.


From the incredible content of Hubspot, “Customer retention is important to any growing company because it measures not only how successful they are at acquiring new customers, but how successful they are at satisfying existing customers.

It’s also easier and more cost-effective to retain customers than to acquire new ones, returning customers spend more and buy more often, and refer friends and family. Only a 5% increase in customer retention can increase company revenue by 25-95%.

The numbers don’t lie: Retaining customers brings companies a ton of ROI (return on investment.)

There are a few reasons why customer retention is critical to company growth and success:

  • Affordability: It’s 5-25X more expensive to acquire a new customer than it is to retain an existing customer.
  • ROI: A 5% increase in customer retention can increase company revenue by 25-95%.
  • Loyalty: Retained customers buy more often and spend more than newer customers. They’ve learned the value of a product or service and keep coming back, again and again.
  • Referrals: Satisfied, loyal customers are more likely to sing a company’s praises and refer their friends and family — bringing in new customers, free of charge.”
  • Increased AOV – Not only is it much more cost-effective to retain current customers, but those shoppers are also willing to spend more as time goes on. Research shows that loyal customers are 23% more likely to spend with you than the average customer.

It’s worth highlighting the ROI stat that I think every marketer and finance person in the company need to think about and set fourth strategies.

A 5% increase in customer retention can increase company revenue by 25-95%.


Shopify has a great infographic on this that serves as a quick guide. You can see how quick acquisition vs. retention is compared highlighting the importance of retention.

acqusition vs retention


Retention strategies can vary case by case, of course. However, there are some strategies that can apply to all businesses and are considered general industry standard best practices.

  1. Set expectations early and often
  2. Create a customer marketing relationship strategy
  3. Build a customer loyalty program
  4. Your customer service experience can make or break the relationship
  5. Survey customers to see where improvements can and need to be made
  6. Constantly educate customers to build trust
  7. Address customers complaints and issues as quickly as possible
Pablo Palatnik

Pablo Palatnik

Pablo Palatnik is an industry veteran in e-commerce & digital marketing with over 20 years experience. He successfully built and sold businesses; he now serves as the VP of Global E-Commerce for cosmetic dermatology brand DS Laboratories. Pablo is the Founder of Etrend.com.

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