6 Significant Benefits of Customer Retention for Banks

Importance of customer retention for banks

Is it better to retain existing customers than to acquire a new one?

Getting a new customer is necessary for portfolio growth, but keeping your current customer is what will give you real value.

In today's increasingly competitive market, customer loyalty is a critical component of banking strategy (Cohen, Gan, Ay Yong & Chong, 2007).

Existing customers are more accessible to sell to than new ones.

You may not be aware, but loyal customers are more likely to spend money with you when they are retained?

Customer retention is critical for the company's portfolio to continue to grow.

It is estimated that the cost of acquiring a new customer is five times greater than retaining an old customer (Reichheld and Etal, 1996)

A customer that is "retained" and returns to purchase products and services saves time, money, and a lot of effort.

Profitability rises by 25% to 95%, increasing 5% in customer retention.
As a result of improving customer retention by 2%, costs can be reduced by 10%
It is estimated that loyal customers are worth up to ten times (10X) as those making their first purchase.

6 significant benefits of customer retention for bank

Customer retention enables banks to form long-term consumer relationships.
Customers can provide you with reviews.
More excellent Consumer Lifetime Value (CLV).
Customer retention enhances referral sales (upselling or cross-sell opportunity)
Customer retention creates a better brand reputation.
It helps for a greater return on investment (ROI).