How do you explain customer retention and innovation to stakeholders?

1 Why customer retention matters

Customer retention is the ability to keep your existing customers loyal, satisfied, and engaged with your brand. It is a measure of how well you deliver on your promises, solve your customers' problems, and create positive experiences. Customer retention matters because it costs less to retain a customer than to acquire a new one, it increases your customer lifetime value, and it boosts your word-of-mouth and referrals. To explain customer retention to stakeholders, you need to show them how it impacts your revenue, profitability, and reputation.

2 How to measure customer retention

Customer retention can be measured using different metrics, depending on your business model, goals, and industry. Some of the most common metrics are retention rate, churn rate, repeat purchase rate, customer loyalty index, and net promoter score. These metrics help you track how many customers stay with you over time, how many leave you, how often they buy from you, how loyal they are, and how likely they are to recommend you. To explain customer retention to stakeholders, you need to choose the metrics that best reflect your objectives, benchmarks, and segments.

3 Why innovation matters

Innovation is the process of creating new or improved products, services, processes, or business models that meet the needs and expectations of your customers and the market. Innovation matters because it helps you differentiate yourself from your competitors, attract and retain more customers, increase your efficiency and productivity, and adapt to changing conditions. To explain innovation to stakeholders, you need to show them how it adds value to your customers, your business, and your industry.

4 How to measure innovation

Innovation can be measured using different metrics, depending on your type, scope, and stage of innovation. Some of the most common metrics are innovation inputs, outputs, outcomes, and impacts. These metrics help you track how much you invest in innovation, how much you produce from innovation, how much you benefit from innovation, and how much you influence the market and society with innovation. To explain innovation to stakeholders, you need to choose the metrics that best reflect your inputs, outputs, outcomes, and impacts.

5 How to align customer retention and innovation

Customer retention and innovation are not mutually exclusive, but rather complementary and interdependent. To align customer retention and innovation, you need to balance your focus on satisfying your existing customers and attracting new ones, on exploiting your current capabilities and exploring new opportunities, and on optimizing your current offerings and developing new ones. To explain customer retention and innovation to stakeholders, you need to show them how you use customer feedback, data analysis, market research, and experimentation to identify and validate your customer retention and innovation strategies.

6 How to communicate customer retention and innovation to stakeholders

Customer retention and innovation are complex and dynamic concepts that require clear and consistent communication to stakeholders. To communicate customer retention and innovation to stakeholders, you need to use simple, concise, and relevant language, use stories, examples, and visuals to illustrate your points, use facts, figures, and evidence to support your claims, and use emotions, values, and benefits to persuade your audience. To explain customer retention and innovation to stakeholders, you need to tailor your message to their interests, needs, and expectations, and use the appropriate channels, formats, and tones.

7 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?