How customer retention analysis works
Conducting a customer retention analysis is much more than calculating the churn rate. To get a clear picture, you need to figure out where, how, and why your customers leave.
These insights can help you adjust the retention strategy and achieve sustainable business growth.
Identify where customers churn
An efficient retention analysis can help you understand at which point in their journey, your customers are more likely to churn.
By studying your existing customers' behavior and the retention rate fluctuations, you can find out which stage of the new user journey is highly volatile.
Once you have this information, you can adjust the marketing strategy to improve the retention efforts at the most vulnerable part of the customer's lifecycle and increase the number of users that stick with your product.
The key to identifying where customers churn is the continuous analysis of their behavior, right from onboarding, with retention and churn rates in mind.
Determine why customers churn
Retention analysis can show you the number of customers who churn and why. By doing this, you can identify behaviors associated with churning and acquire direct feedback.
Figuring out when customers leave you, can help you identify weak spots in your strategy. Meanwhile, feedback offers a direct explanation of why a customer decides to churn.
By adjusting your business strategy to battle the common reasons for churning, you can increase retention rates quickly and efficiently.
Find out how to improve retention
A smart customer retention analysis allows you to understand what you've done wrong. Knowing where and why customers churn can help you single out weak parts of your marketing and retention strategies and fix them timely.
A variety of retention improvement tactics exist. Many companies make a mistake of employing them without analyzing the situation first. With retention analysis results in hand, you can pinpoint strategies that work specifically for your business.