Measure the Right Things
In today's lead 1to1 Weekly article, Forrester Research reports that many banks talk a good game when it comes to customer retention strategies, but as of now the money's still being spent on acquisition. Nearly all of the decision-makers polled by Forrester (95 percent) indicated that customer retention is "very important" or "critical." But they have a long way to go to actually make that happen. "Banks have not traditionally focused on loyalty," says report author Mary Pilecki. "In general there have been very few strategies and they don't measure who stays and who goes."
When it comes down to it, banks in general may just be measuring the wrong things. It's easy to measure how many customers you had last month, and compare it to how many customers you have this month. But by focusing on different metrics, companies can get a better sense of how their customers act, and in the long run, if their value will improve over time. Ask how much customers is spending, if they're buying new products, if they are recommending the bank to others, and of course, who's leaving and why. It may provide some pretty interesting answers.
What do you think are important customer retention metrics? How does your company approach customer retention strategy?
