At Xeno our business is helping stores improve repeat sales. We’ve spoken about it to 1000’s of retailers, restaurant and salons owners.One thought that lots of owners have is, “My customers already come back. What will you do for me?”.Ofcourse customers do come back to your store. But the reality is totally different from what you imagine.We’ve had people tell us that 80 to 90% of their customers come back, but when they sign up with Xeno, the data shows that only 35% of the customers back after their first order. Forget the customers that drop off after the second order and so on. The reason for this discrepancy is that we see the same faces or hear the same names again & again, and our mind gets influenced by recent or familiar things, we’re all human after all. Machines haven’t become a part of us yet :)If you think, this is an isolated case, I can tell you that we’ve seen data for 100’s of brands that have from 1 store to over 50 stores, and none of those brands has a retention rate better than 50%. None.Overall, 70% to 85% of any brand’s customers are lost customers.So, good retention doesn’t mean that all your customers are coming back. No matter how good your product & service is, that will never happen. So how do you know is your retention good or not? How do you measure retention? I’ve built a simple tool in excel to help you find out (if you’re a Xeno user you can skip this excel exercise and see your brand’s retention rate on your dashboard).
Step 1: Decide the retention time period
Eg. month over month, quarter over quarter, year over year etc. Their is a science to calculate that the appropriate period you should look at for your brand, but after doing this exercise with many of our clients below are the numbers we recommend.
- Retail - Yearly
- Restaurant - Quarterly
- Salon - Quarterly
- Gym - Monthly
Step 2: Download data from your POS.
To get the retention rate, we need to compare data from the previous and the current time period.For example, let’s say we are looking at a quarterly retention measurement. Say, Current Quarter = 1 June to 30 Sep Previous Quarter = 1 Mar to 31 MayNow you can download a simple report giving you the list of all the customers phone from both the above quarters.
Step 3: Get retention rate
Once we have the data for both quarters, just open the 2 excel sheets & copy paste the phone number’s into the retention rate calculator excel file I’ve created. That’s it & you’ll have your retention rate.
Now that we have the number, you know the true answer to the question, are my customers really coming back? Always remember no matter how good or bad retention truly is after looking at the numbers, there's always room to improve retention through smarter marketing to your existing customers. More on that later.Now time for a 1 sentence sales pitch, if you’re looking to see how we help owners improve customer retention for their brands, click here to request a demo of Xeno.[mc4wp_form]