Retention & Growth: Winning Tactics for Your Business
A company craft a robust marketing and sales strategy. The strategy actually works, and customers start coming on board like crazy. The flow of revenue makes this company earn profit. Till this point, the story sounds good.
However, in the subscription business market, there comes a twist in this story—Customer Retention. Subscription businesses need to pay equal attention to retention with the acquisition of customers because only a good retention rate can ensure effective business growth.
Coming towards the reason behind the importance of retention in the subscription business market, according to Statista, about 64.4% of the global population uses the internet, and not all of them can be the targeted customers. The point is though the subscription business market is a huge pool of opportunities, you cannot fish just anything out of it.
As a subscription business retailer, you need to know the community to whom you can sell your subscriptions (and they are limited). So, the only strategy that will help in making sustainable growth is an equal focus on customer retention and acquisition.
So, in this blog, we are going to shed light on various aspects of retention and growth for subscription businesses.
Also Read: How to Be Creative with Retention and Growth Strategies for Your SaaS with SubscriptionFlow
Your Retention and Growth Strategies to Win Not Customers but Brand Ambassadors
Like any other business, subscription businesses also want to have people talking about their brand name. And no one but brand ambassadors are the ones who do this job perfectly. Your loyal customers can be your brand ambassadors. Today, there are social media platforms and community forums where people talk about every product or service that they use.
If you are a SaaS retailer, then there are dedicated Slack communities and product launch platforms where people talk about SaaS products, their features, their usage, price, and whatnot.
You need to market your subscriptions in a way that you will get not just customers but brand ambassadors who will talk about your product and promote it. When you have brand ambassadors:
- The retention rate will increase
- Customer engagement will improve
- The customer acquisition rate will also increase
Making customers loyal is the target of every subscription business, but if you have not thought of winning brand ambassadors, then this is the time. Put a little more effort to get such customers who will talk positively about your subscription services or subscription boxes.
How Retention Makes Your Business Growth Take Off
Customer retention rate is a KPI that links with many other subscription business metrics. If you succeed in improving the Customer Retention Rate, the following KPIs will also outperform:
For instance, if your strategy is to improve customer engagement so that the retention rate will also improve, then it will directly affect CLV. However, CLV is the average revenue that a customer generates over the entire lifetime. Better engagement will keep your customer actively using the product or service that you offer.
Likewise, when customers are retained, the revenue is more predictable and sustainable. If somehow, your recurring revenue is not stable, then start working on the retention strategy. It will increase MRR. When revenue gets stable, you will be able to invest money in new business ventures. That’s why the retention ratio and growth rate are directly proportional. Improvement in MRR ensures improvement in ARR as well.
That’s how retention fuels the performance of subscription business processes and gives a push to business growth.
Work on Customer Psychology
While you are working on growth and retention, it is important to understand the basics of customer psychology. For example, little acts of kindness to your customer causes a sense of obligation in your customers. Offer your customers perks and advantages so that you can cause this sense of obligation to return the favour in your customers.
Many subscription businesses plan special discounts and offer for the customers who are leaving. It is undoubtedly a good business strategy, but you need to plan similar perks for your loyal customers. Pay them equal attention, and they will pay you back by leaving good reviews, referrals, and considering add-ons that you offer. You can also offer some added perks to your customers so that they stay on board for a longer time.
Also Read: Psychological Triggers That Can Help You Bring More Customers On Board
In today’s competitive business landscape, retention and growth are intertwined, and implementing winning tactics for customer retention can be a game-changer for your business. To retain customers and boost subscription business growth, you also need a tech stack that will support your retention and growth strategies. SubscriptionFlow is an integrated subscription management platform that can fulfil all your business needs. If you want to see your growth and retention strategy work, then make SubscriptionFlow part of this plan.
schedule a demo now to see how our subscription management system can help you retain and grow.
