What is considered a good retention rate?

[Ehsanuls55]

A good customer retention rate depends on the sector and the type of product or service offered.

For example, in the SaaS industry, a retention rate of 85% or higher is considered high, while eCommerce companies may consider a good retention rate to be between 40-60%, depending on the product lifecycle.

It's essential to compare your customer retention rates to industry benchmarks, but chairman email lists the most important aspect is to improve your own over time.
Pro Tip: To measure SaaS customer success, focus on metrics like product adoption, frequency of use, and customer satisfaction (CSAT).

Strategies to increase user retention
It's one thing to get users through the door, but retaining them is where the magic happens. Here are some strategies to help you increase customer retention if you're looking for the best ways to increase user retention.

1. Optimize onboarding
Users’ initial experience with your product is crucial. Optimizing onboarding helps users quickly understand how to maximize the value your product offers.

A smooth initial experience reduces friction and increases the chances of users returning.

Focus on clarity and simplicity. Guide users through essential features without overwhelming them. Use tooltips, in-app tutorials, and short videos to highlight key features. The goal is to make users feel confident navigating the app, which increases the likelihood that they will continue using it.

Also, ask for as little information as possible during onboarding. Reducing the number of fields and steps helps improve conversion and decreases the chances of dropouts.
Read also: Customer Experience vs. User Experience: Key Differences

2. Personalization and user segmentation
Standard approaches don't always work when it comes to retaining customers.

Personalizing and segmenting users allows you to address specific needs, behaviors and preferences, making them feel valued and understood.

Segment users based on their activity or behavior.

For example, separate groups for new users, active users, and those who haven't interacted recently allow for more targeted communication. Tailoring messages and content to each group can increase engagement.

Offer personalized recommendations based on past behaviors or preferences. The more tailored your product is to each user, the more likely it is to build loyalty.

Example: Spotify tailors experiences to each user with playlists like “Discover Weekly” and “Release Radar,” which offer recommendations based on listening habits. Features like “Spotify Wrapped” highlight personal music preferences, while updates about new releases and events keep content fresh.