{"id":16335,"date":"2022-10-19T07:46:10","date_gmt":"2022-10-19T12:46:10","guid":{"rendered":"https:\/\/www.invespcro.com\/blog\/?p=16335"},"modified":"2022-10-19T07:46:10","modified_gmt":"2022-10-19T12:46:10","slug":"increasing-customer-retention","status":"publish","type":"post","link":"https:\/\/www.invespcro.com\/blog\/increasing-customer-retention\/","title":{"rendered":"Increasing Customer Retention: How CRO Helps"},"content":{"rendered":"Reading Time: <\/span> 9<\/span> minutes<\/span><\/span>

Do you regularly visit Starbucks by the corner to get your coffee? Or do you know someone who does?<\/span><\/p>\n

Roughly, you spend about $1.85 for a cup of coffee daily.\u00a0\u00a0<\/span><\/p>\n

Now, think of not just you but the hundreds and thousands of people who do that daily, some multiple times a day. It all adds up to the bottom line of Starbucks.<\/span><\/p>\n

That\u2019s customer retention.<\/span><\/p>\n

And that\u2019s what every business wants, a continuous cycle of paying customers, not just first-timers.<\/span><\/p>\n

The truth is if you want to see your monthly recurring revenue (MRR) and annual recurring revenue (ARR), you can\u2019t settle for just the first customer purchase alone.\u00a0<\/span><\/p>\n

In this article, we\u2019ll define customer retention, how customer retention is calculated, what\u2019s a good customer retention rate per industry, and how to use CRO to increase customer retention.<\/span><\/p>\n

What is Customer Retention, and how to Calculate it?<\/b><\/h2>\n

Customer retention refers to a company\u2019s ability to turn first-time customers into repeat purchasers. This means stopping them from switching to a competitor.<\/span><\/p>\n

If your company sees a lot of repeat customers and can keep them dialed in, you\u2019ll have a good retention rate.\u00a0<\/span><\/p>\n

On the other hand, it\u2019s possible your business has a lot of first-time purchases but a low repurchase rate, and this is due to the type of products you sell e.g. TVs.<\/span><\/p>\n

In this case, not much can be done to encourage shoppers to keep buying from you because most TVs’ lifespan is 2 years.<\/span><\/p>\n

In this case, you can upsell and cross-sell additional products that work well with the TV they might need.<\/span><\/p>\n

This way, you increase your AOV, and your revenue is bulkier than when it was just TVs you sold.\u00a0<\/span><\/p>\n

Customer retention works in two ways;<\/span><\/p>\n