While attracting new users is extremely important, retaining customers is key to building scalable products, services, and applications. Unlocking efficient customer retention can help businesses grow exponentially while conserving capital. 

Overall, investing in customer retention is very profitable for businesses as compare to attracting new users. Not ideal. On the other hand, companies that retain users save a significant portion of these costs and complement the user’s lifetime value. 

The reason retention rate is considered by many companies to be the most important growth metric. It can provide a clear indication of how well a company or application is performing in terms of customer satisfaction. A better retention rate indicates that users are highly engaged with the product, which may translate to better monetization.

Additionally, the retention rate helps companies get answers to important questions such as: 

  • When a new user enters the acquisition cycle, how long does he stay with the product? 
  • How satisfied is the customer with the product? 
  • How often do customers completely abandon the product, never to return it? 
  • How much can the company grow with the current rate and growth strategy?

As companies continue to experiment with their strategies and evolve over time, the retention rate can paint a clear picture of what’s working and what’s not. Businesses that use this rate as a decision-making metric can better solve challenges and increase customer retention and satisfaction.

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