Improving customer retention and share of wallet can seem like a daunting task. It’s not simple, and it takes time to feel the effects of any initiatives focused in these areas. It almost always feels better to focus on customer acquisition, mainly because it’s such a simple and direct concept: Add more customers now, add more revenue now. Improving retention and share of wallet seems much more incremental. In a given month, that’s very true. It’s hard to shift retention and share of wallet in a way that can compete with the revenue that several new customers can bring in just one month. However, the it’s important to recognize that an investment in retention and share of wallet activities has a compounding effect, not only on your existing customer base, but also all the new customers you are working so hard to acquire. Month over month, quarter over quarter, even the smallest improvements in keeping and growing your customers will have a massive impact that will outperform any acquisition-only strategy. Because compounding effects are difficult for us to intuit, I put together this tool below to help you play out different scenarios. Notice how making small improvements to retention and share of wallet can dramatically enhance the energy you are putting into customer acquisition. The goal here isn’t to stop customer acquisition efforts. Instead this visualization should help us realize that we really can afford to invest in people who are focused on retention and share of wallet as well.
Small changes can make a big impact [ Interactive Calculator ]
