[FundingStrategist]

Altify’s 2017 Business Performance Benchmark Study found these to be B2B CEOs' most important strategic focus:



87.3% - Customer Retention

86.5% - Revenue Growth

73.1% - Profit Growth

65.2% - Operational Efficiency

64.6% - Increased Market Share

38.0% - Cost Reduction



Customer Retention edged out all the others for the #1 most important strategic focus.



Why?



Because:

Acquiring a new customer is 5-7x as expensive as retaining an existing customer.

The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.

Increasing customer retention rates by 5% can increase profits by 25-95%.



If all this sounds important, we need to remember that:

89% of businesses report their customers state that their user experience is the key factor in their loyalty.



The user experience is essentially customer service, how we serve and provide value to the customer (continually).



Well, what is the user experience that will drive customers away (to churn)?



Strategic Insights’ 2019 survey found that the overwhelming majority of the reason customers leave is within the control and influence of the sales rep:


9% - Customer persuaded to go to competitor

14% - Customer is dissatisfied with your service

68% - Customer believes you don’t care about them or their business (you only care about yourself)



Add that up and 91% of the reason customers will leave is within the control and influence of the Funding Pro!



So to retain customers, the customer must feel satisfied with your service and believe you care about them (you are aligned with their interests and business goals).



Okay, fair enough. Well, what's the first step in improving retention?



Let's start with getting clear with what it really means.



Definition of Customer Retention:


Customer retention is the ability to retain customers over a set period of time. It is represented by a percentage that measures how many customers a company keeps at the end of a set period of time, and that number impacted by the number of new customers acquired as well as the number of customers who churn (leave).



To consistently improve it, we have to first start measuring it.



Here is the Retention Rate Formula:


Customer Retention Rate = ((# Customers at End of Period - # Customers Acquired During Period) / # Customers at Start of Period) X 100



Okay, to break this down:


Set Time Period: 1 Year

# Customers at Start of Period: You start the year with 100 accounts (customers) that you had gotten funded (before the year).

# Customers Acquired During Period: Funded 100 deals.

# Customers at End of Period: 140 accounts (customers)



Plug these in and it looks like this.


( (140 – 100) / 100) ) x 100 = 40% Retention Rate



For reference, Mixpanel’s 2017 Product Benchmarks report found these two key industry retention rates:


25% - Finance

35% - SaaS



The average of all other industries was under 20%.



What does a renewal really mean to you?



-FundingStrategist

https://fundingstrat.com

https://fundingstrat.com/the-revenue...wal-retention/

[SFC]

FundingStrat per usual, dropping WojBombs... This is a great reminder that RENEWALS ARE EVERYTHING! Don't just stack your merchants to death, build a relationship and renew renew renew.

[FundingStrategist]

FundingStrat per usual, dropping WojBombs... This is a great reminder that RENEWALS ARE EVERYTHING! Don't just stack your merchants to death, build a relationship and renew renew renew.

Thank you, for certain!

*ABR*

Always Be Renewing



-FundingStrategist

https://fundingstrat.com

[Shorebird]

Excellent!
Can we get some client acquisition strategies?
I can't close if I ain't got nobody! (David Lee Roth)

[fundingsmbs]

"68% - Customer believes you don’t care about them or their business (you only care about yourself)" - with models that focus on new business only and those reps are not allowed to follow up with customers, or, are no longer at the company when renewals occur, I can see how this experience is perceived. merchant's don't realize how much churn and burn happens in sales though. go talk to a funder 90 days out from their initial hiring of inside reps and see how many of those reps the customer dealt with still work there.

[RickyR3712]

great post

[FundingStrategist]

Excellent!
Can we get some client acquisition strategies?
I can't close if I ain't got nobody! (David Lee Roth)

Thank you, I hear you!


-FundingStrategist

https://fundingstrat.com