How do you educate your investors about the latest retention trends and best practices?

1 Why retention matters

Retention is the ability to keep your customers engaged, satisfied, and loyal over time. It is not only a measure of product-market fit, but also a driver of growth, profitability, and customer lifetime value. Retention can also reduce customer acquisition costs, increase referrals, and improve brand reputation. According to a study by Bain & Company, increasing customer retention by 5% can boost profits by 25% to 95%. Therefore, retention should be a top priority for any business, and a key indicator for any investor.

2 How to measure retention

When measuring retention, you should consider the business model, industry, and customer behavior. Common metrics for this include retention rate (the percentage of customers who remain active or repeat customers over a given period of time), churn rate (the opposite of retention rate), customer lifetime value (the total revenue or profit generated by a customer over their entire relationship with your business), and net promoter score (a measure of customer satisfaction and loyalty). It's essential to select the metrics that best reflect your value proposition, customer journey, and business goals. Additionally, tracking and analyzing your retention metrics over time, and segmenting them by different customer groups, channels, features, or cohorts is essential.

3 How to improve retention

To improve retention, it’s important to have a deep understanding of your customers, their needs, preferences, pain points, and feedback. You should also have a clear value proposition, a differentiated product or service, and a strong customer relationship. To achieve this, you could deliver consistent and exceptional customer service and support. Additionally, providing value-added content, education, and resources can help your customers succeed and grow. You could also create a sense of community by using social media, forums, events or gamification. Furthermore, offering incentives, rewards, loyalty programs or referrals can encourage repeat purchases and referrals. Additionally, it’s important to solicit and act on customer feedback, reviews and testimonials while showing appreciation and recognition. Personalizing and customizing your product or service, communication and offers to suit your customers' needs and preferences is key too. Finally, innovating and improving your product or service based on customer data and insights is essential for success.

4 How to communicate retention to your investors

When it comes to retention, your investors may have different expectations and interests. To cater to these needs and preferences, you should tailor your communication and reporting. Explain the rationale and benefits of retention for your business, industry, and customers, as well as showcase metrics, trends, and benchmarks. Highlight your retention strategies, initiatives, and results, and demonstrate a customer-centric culture. Additionally, address any challenges or risks in your retention performance and seek feedback from investors. Doing so will help you inform your investors and ensure that your retention efforts are successful.

5 How to align retention goals and metrics with your investors

Working with investors can be a challenge, as you may have different views on what constitutes success, how to measure it, and how to achieve it. To ensure a clear and mutual understanding of your retention goals and metrics with your investors, you should identify and prioritize the key retention goals and metrics that matter most for your business and your investors. Set realistic and achievable retention targets and milestones, based on current performance, potential, and resources. Additionally, define the frequency, format, and content of your retention reporting and communication. Involve your investors in the planning process and solicit their feedback or approval as needed. Finally, celebrate successes with your investors to acknowledge their contribution. By educating them about the latest trends and best practices in customer retention, you can build a strong relationship with them for mutual success and growth.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?