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What does good retention look like?

What does good retention look like?
Different companies will want to measure their retention rate in different ways. This is due to the fact that the frequency with which customers return to purchase items or use a service will in large part be determined by the nature of the product or service.

Some things we need or want often, and others much less so. While Facebook wants users to be returning daily, Apple knows that purchasers of an iPhone will likely not buy a new phone for several years (except for the raving fans who always immediately purchase the newest version), so it won’t know if a given iPhone buyer has been retained until perhaps three years, maybe more. 

The frequency with which buyers search for listings on sites like Zillow also varies from how often diners search Yelp for restaurant recommendations, just as the search and purchase frequency for customer looking mattresses will differ from those looking for a new pair of shoes.

For e-commerce, the basic metric of retention is the repurchase rate of customers, which might, for example, be the number of times customers make a purchase per month. Many e-commerce companies, for example, measure the repurchase rate per 90 days, but again, this time frame varies depending on the product sold.

Written by Bookcademy.

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Today's Challenge

What do you think is the key point of this paragraph?

Score: 10pts

1

The key point is that in crafting your retention metrics, it’s not so important to benchmark your results against the best information you can get.

2

The key point is not to compare with other competitors even if your are working in the same space for the same customers

3

The key point is that in crafting your retention metrics, it’s important to benchmark your results against the best information you can get. These benchmarks are the only way to tell whether what you’re seeing with your customers is typical, better, or worse than expected.

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