Customer retention analytics programs that measure reach and impact can go a long way in helping business owners improve marketing campaigns as well as products and services overall.
They can also help make it easier to cross- and upsell existing customers, and to keep them over the long haul. (As we know, it's far less expensive to retain a customer than to recruit a new one.)
Top Customer Retention Analytics Tools
Fortunately, technology innovation over the last several years has enhanced the cadre of available tools that target customer retention.
Learning about customer retention analytics can help you stretch your marketing dollars and keep your most valuable business.
#1. Optimizely
An A/B test is a customer retention technique that prompts customers to choose what they prefer most about your product, service, website or marketing campaign.
Using a tool like Optimizely, you can rapidly test an A/B hypothesis for every aspect of your offering, allowing you to refine it based on what customers find most appealing or helpful.
Optimizely's features contribute to both the customer retention rate metric and the repeat purchase probability metric, which I describe in more detail below. It offers a variety of pricing arrangements ranging from a few thousand dollars a year for the basic offering to $200K a year for the enterprise plan.
#2. Google Analytics
Many business owners already use Google Analytics for customer retention statistics on their websites, such as traffic numbers and most frequently visited pages. However, a closer look also reveals your most and least popular website pages by time of day, and which customers visit repeatedly.
Customer retention programs are best supported by strong metrics that directly measure their efficiency and analytical approaches that decode customer behavior and prescribe the right actions to address it.
Google Analytics' basic features are available in the free version, but much larger businesses can take advantage of Google Analytics 360, which costs $150K annually and provides advanced machine learning features that derive sophisticated insights from customer data.
#3. Kissmetrics
Kissmetrics is a cloud-based software that facilitates customer engagement through email automation, and helps smaller firms understand their customers through behavior-based analyses.
Most notably, it runs customer retention analytics by acquisition channel (social media, direct marketing, paid search, referrals, email, etc.), prompting businesses to increase marketing spend in the areas that are most likely to attract loyal customers.
Kissmetrics offers a free trial, and from there a subscription starts at $500/month.
#4. Mixpanel
Mixpanel is a software solution that allows small to medium-sized businesses to divide and target customers by segment. Segments often represent demographic (age, gender, geographic location, etc.) and behavioral characteristics (products purchased, email signups, etc.), and tools like Mixpanel customize outreach and ongoing communication by segment.
The software, which is free for basic businesses and $89/month for larger ones, works best for tracking customer retention rates and customer value via web and mobile applications.
Top Customer Retention Metrics
Effective customer retention analytics tools track several critical metrics that drive informed business decisions, including:
Customer Retention Rate (CRR)
This metric, which all customer retention programs influence, reflects the percentage of customers who have been with your business for a while.
Aim for 80-90 percent, and if you're lower than that, consider using the above tools to see where you're going wrong and target the specific customers who are leaving.
Customer Churn Rate (CCR)
Most of the analytics solutions above address customer retention metrics like CCR, which is the percentage of customers who have stopped purchasing from your organization.
Calculate the CCR by dividing the customers you've lost by the customers you had at the beginning. The lower the CCR is, the better your business will perform. When the numbers go up, you'll need to make strategic decisions regarding how to improve your customer experience.
Customer Lifetime Value (CLV)
CLV predicts the value of a customer over their lifetime and is contingent upon other metrics like customer retention rate and loyal customer rate.
Most customer retention analytics tools inform this metric, and benefits include greater revenue and longer customer tenures.
Loyal Customer Rate (LCR)
Loyal customers are more likely to try your new offerings, recommend your company to others and stick with you if you make a mistake. It's in your best interest to use the above tools to identify them via tools like Kissmetrics and communicate with them via solutions like Mixpanel.
Customer retention programs are best supported by strong metrics that directly measure their efficiency and analytical approaches that decode customer behavior and prescribe the right actions to address it.
Read more articles on customer engagement.
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