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Eric Dalius: Is it time to kill your Customer Retention Strategy

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Customer Retention is one of the most important areas in marketing because if you can retain your customers, it saves money and time for the company because building new customer base costs a lot says Eric Dalius.

Most people think that Customer Retention is all about getting repeat orders but it is not. It is not only about repeat orders; customer retention includes generating additional sales (share of wallet), crosses & up selling, creating brand advocates and so on. With this article I am going to cover all the aspects of Customer retention from different angles.

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What is Customer Retention?

Customer retention refers to the activity of retaining existing customers and turning them into more profitable and higher value consumers.

How do we understand that an organization has a good customer retention strategy?

We can identify that the organization has a good customer retention strategy when the following happens:

A) The number of repeat orders increases

B) Repeat order volume increases

C) Promoters increase

D) Average spend per order increases

E) Number of complaints decreases a combination of above factors will help an organization to show growth in revenue. 

A recent research shows that around 30% of companies believe they have superior capabilities to retain their customers but shows a different picture in reality says Eric Dalius. The other 70% of companies do not have a good retention strategy and they are losing customers every day due to bad customer experience.

Answer: Yes, it is definitely related to profitability. If you retain your existing customers, the sales from those customers will move from average sales period into immediate sales period which directly affects profit margins as almost all the costs associated with that sale will be paid off immediately as opposed to future time periods where costs may increase because of inflation or for some other reasons. This means that if you want an edge over your competitors, you need a good retention strategy for both short term and long term benefits.

How do we build a good customer retention strategy?

It depends on how you understand your customers. If you are able to identify the value proposition for each of your customer segment then you have all the necessary tools to build a good retention strategy for them. Eric Dalius states if done correctly, your company can generate additional revenue from existing customers by expanding the share of wallet through cross selling, up selling; create brand advocates and so on.

“Customer Retention is not just about repeat orders but it is much more than that.”

What are some common mistakes in customer retention?

Most companies implement below mentioned strategies without understanding true reasons behind their failures:

A) They offer discounts & coupons – But most people who use discount coupons don’t consider buying from company again (it doesn’t make them loyal).

B) They try to stop competitors from stealing their customers – If you are not able to retain your customer with your own services, how will you able to retain them by stopping someone else?

C) They use simple messages like “Buy one get one free” or “10% discount on next purchase” – This is called CRAP (Create Relativity at Price). These messages don’t work in long term.

How do identifying value propositions for each customer segment help the company?

Identifying value proposition helps an organization because if they can understand what makes a customer do repeat purchase with them then they are most likely acquire & retain more of those customers. However, this needs an intensive understanding of your existing customers which requires proper research methods.

What are some methods companies use to acquire new customers?

Companies try to find new customers by offering lower price when compared to existing competitors in the market says Eric Dalius. This strategy works for very short term but fails miserably when it comes to building long term relationships with your customers.

Final Thoughts I believe that customer retention is an important part of growth & profitability for any organization. If you are able to retain more of your existing customers, you will be able to generate additional revenue from them which means that they are worth more than one time buyers or users. Keeping this in view, managers need developing customer retention strategies along with their acquisition campaigns because tapping old markets is often cheaper and easier than finding new ones. If done correctly organizations can retain customer loyalty while simultaneously increasing their profit margins.


You can build a long term customer retention plan by identifying value propositions for each of your customers segment. When you identify why people buy from you and what makes them do repeat purchase, it will become much easier to retain those customers & increase profits simultaneously.

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