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What is Retention Cost?-Clickipedia

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What Retention Cost is: the amount of money you have to spend to keep a customer.

What Retention Cost is not: $0. Even if you think it doesn’t cost anything to retain your customers, it does! The amount would include customer support, the salaries of your Accounts Payable department, any promotions you do, and the list goes on.

Why we care about Retention Cost: You’ll need to know your retention cost in order to determine the lifetime value of your customers, and decide how much you want to spend on PPC advertising and other programs to acquire customers, as well as what programs you’d like to start or stop for retaining your customers.

This post is part of an ongoing Clickipedia series, defining all the terms you need to know for conversion rate optimization. Keep checking back each week to learn more, and don’t forget to check out the whole series.