Many organizations use data visualization to increase customer acquisition and predict user behavioral trends. Without the data, effective business decisions are difficult to make in regards to marketing, venture capital, business development, R & D and the list goes on. Oftentimes, organizations focus most of their research and data analysis on customer acquisition, because they know the amount of effort it takes to acquire new customers. So much so, data that could be used to increase the value of customer retention is pushed aside and neglected, not realizing that it costs 5 times more to acquire a new customer than retaining a customer.
While organizations are not consciously neglecting customer retention data, they are missing long-term opportunities with customer retention, when they put all their efforts into acquiring new customers. Organizations become so proactive with acquisition and business development, which, in turn, become reactive with customer retention resulting in client departure. This cycle of proactive-reactive-departure falls into an endless loop, because they continually need to bring in new customers to replace customers on retention that leave.
Reactive customer retention
Reactive customer retention happens when the customer is no longer top priority. Common symptoms of a reactive customer retention include consistently putting out fires due to missed deadlines and misunderstandings to rushed deliverables to being the order taker instead of the innovator. When this happens the organization’s account managers are baffled when the customer dissolves the relationship. After the customer leaves, the organization declares an urgency to acquire new customers. It is a vicious cycle. What if it doesn’t have to be this way? What if this reactive cycle can be broken? What if an organization can grow by being proactive with both customer acquisition and customer retention?
Reactive customer retention can be broken with data visualization
If your organization is caught in this vicious cycle, the first thing you need to do is recognize that data is currency when it comes to customer retention. Second, you need to present the right data in a real-time data visualization tool such as a custom dashboard to guide your account executives, so they can effectively nurture their customers. With data visualization, they will be able to be proactively:
- Identify potential red flags that need to be addressed regarding budget, management changes or project obstacles
- Recognize areas for growth which allows them to be the thought leader and initiate ideas
- Shift resources for areas in the account that need more massaging than other areas
- Make decisions on accurate data NOT assumptions
- Decrease stress and tension with their customer
Data visualization can break the cycle, but it is an investment. If your organization is worried about the investment in data visualization for customer retention, you should take note that statistically a 2 percent increase in customer retention has the same effect on profits as cutting costs by 10 percent. This means by taking 2 percent of your investment in customer acquisition and shifting it towards the investment in data visualization for customer retention, you will see in increase in customer retention and your organization’s profits.