Customer Retention

Why Customer Retention Is Key for Purchase Frequency

Purchase frequency is a crucial metric for any business. It tracks the number of times a customer buys products or services from a company within a given period. There is no such thing as a “one-size-fits-all” number for purchase frequency, because how often the typical customer purchases has a lot to do with the types of products and services you are selling, but higher is always better. Where customer retention fits in is that the longer a company retains a customer, the more often they purchase and the more revenue they generate for you.

How companies should think about customer retention

Customer retention measures the percentage of customers that purchased within the last 12 months that also purchased within the prior 12 months. Maintaining retention over the long term is critical for your purchase frequency, purchase volume, and overall profitability.

For most companies, the revenue that each customer generates skyrockets when they go from year two to year three of working with you. Here are the typical purchase frequency gains that we see for equipment dealers, as an example: 2.9X more equipment, 9.1X more rentals, 4.1X more service, and 5.6X more parts in the third year. Overall, their customers spend 30% more in the second year of working with them and another 50% more in year three.

Improving customer retention and purchase frequency

The best method for improving your customer retention and, in doing so, the purchase frequency and purchase volume of your customers, is through customer satisfaction surveys conducted by a third party. When they are done right, surveys give you insights into why customers are leaving you for the competition, where the gaps in your processes are, and what customers value most about a company.

Using a third party will elicit candid comments that customers may not want to share with an employee of your company, and the surveys will provide very specific feedback, so you can solve any issues quickly. At Winsby, we see an increase in retention rates of 30% or more when customers are routinely surveyed about their experience with a company.

That means that 30% more of your customers are staying with you each year, moving closer towards those higher purchase frequency and purchase volume numbers.

Our customer satisfaction surveys are highly effective

The best type of customer satisfaction surveys are phone surveys, because they typically provide a better sample. At Winsby, our team will usually reach a customer over the phone on every third call. Then, once we reach them, 97% agree to take the phone survey. This rate is much better than responses for email surveys, for which a good response is 2% of recipients.

When conducting customer surveys, we get to the heart of what your customers care about, how well you are fulfilling their needs, and any areas they feel you should improve. Surveys give you the ammunition you need to act, so you can boost customer retention, purchase frequency, and purchase volume.

If you want to increase your customers’ purchase frequency and purchase volume, then

contact the Winsby team today!

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