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Retention is (arguably) more important than acquisition

During a pandemic it makes logical sense to focus on keeping existing customers rather than acquiring new ones (battering down the hatches, if you will). By some metrics it is 5x more profitable to keep an existing customer than acquire a new one (depending of course on your cost of acquisition, as well as your life-time-value of that customer).

Here's a decent read I found which does a meta-analysis of a few thousand blog posts showing how focussed we are on getting new customers, and not on retaining them. I recommend giving it a looksee. https://www.profitwell.com/blog/lessons-from-10342-blog-posts-on-growth

On the flip side, after some searching for good content on retention I just kept getting content marketing posts and almost smoked a cigarette (it's been 2 years smoke free).

If any of you fine people have some decent reading on reducing churn and improving customer retention, my psyche (and lungs) will thank you.

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    The lifetime value of a customer is higher than the cost of acquiring them.
    Acquiring a new customer is great, but retaining that customer is even better. A loyal customer will spend more with your company over time and are less likely to churn. In fact, the lifetime value of a loyal customer can be 10 times that of a new one.

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    Have you read about the jobs to be done framework? Instead of thinking about what features are missing (and falling into the trap of the "just one more feature" cycle), you ask, what problem is my customer trying to solve?

    That's hugely oversimplified and I'm probably explaining it wrong, but that might be a start. My takeaway on churn is it remains high until you can find product market fit. And even if churn is low, it can creep upward over time as customers find better alternatives and your product falls out of product market fit.

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      I'm familiar with the framework and feel like I'm pretty good at not responding features. I believe that there are a handful of reasons for customer churn (in JustSketchMe's case):

      • Lack of education on product (solved by creating easy-to-digest onboarding for paid features, maybe some videos)
      • Customer feedback and interaction (I've got a pretty good system for this, and it seems that a lot of the feedback for cancellation centers around price)
      • And this ties into the above point: Pricing (I'm playing around with different price points, as well as different contract lengths. One of the issues is that I have a VERY generous free tier so there isn't a huge incentive to upgrade at the price point I'm at)
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        That’s interesting about the free tier. Does it feel like your paid plan is competing against your free tier? I’m sure you have, but have you thought about removing features from the free tier?

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          I've considered it, but I never intended this to be a paid service from the beginning. I actually just really wanted to make this so people could use it. It would certainly be easier to close off the free tier, but so many people (and artists are notoriously poor) are benefiting from it. I'm just working on making the paid tier more awesome.

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