Keeping your customers

It costs less to retain than acquire a customer.

But you know that already.

The Australian Communications and Media Authority cited research that:

• Increasing retention by only 2% has the same effect on profits as having to cut costs by 10%;
• Reducing defection by 5% can increase profits by as much as 125%; and
• It costs 5-7x as much to acquire as retain customer.

Added to that, a customer leaving is unnatural. Why? We're built to leave things as they are. It's our status quo bias.

So if they're leaving, something must be pretty wrong. 

In this video I describe four strategies to retain your customers.

1. Increase motivation to stay
2. Decrease motivation to leave
3. Make it easy to stay
4. Make it difficult to leave

I also discuss status quo bias, loss aversion, sunk cost, intrinsic and extrinsic rewards and sludge.

  

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