Why is customer retention important for DTC brands?
Benefits of customer retention for the business:
- Not dependant on new customer acquisition to make sales. Orders from existing customers are cheaper or even free which means higher margins and better profitability.
- Increases the return on initial marketing efforts that brought in those loyal customers.
- Stable customer base with predictable behavior (e.g. holidays, yearly cycle) so you are able to prepare
- Predictability in revenue and more secure cash flow
- Shorter the buying cycle
- Growth is scalable and more affordable than paid acquisition
- Good sign of product-market fit
- Can be the reason for investors to back you with capital