¿Qué es la retención?

What is retention and why is it important for startups?

Retention is a fundamental concept for any startup, as it refers to the ability to retain customers over time. Depending on the type of company, this definition can vary significantly. For example, in a SaaS (Software as a Service) startup, monthly retention is crucial, while for platforms like Facebook, the focus is on daily or weekly retention. Understanding how retention is measured and affected can be a deciding factor in a startup's success.

Why do retention metrics vary by company?

For a SaaS company, it is essential to retain customers on a month-to-month basis, which translates into recurring revenue. However, for social media platforms, success is measured by the number of daily or weekly active users, who do not necessarily pay for the service. These differences in metrics reflect the different realities of the business models.

• Facebook: Seeks to understand how many users are active each day or week.
• SaaS: Focused on monthly retention of subscription-paying customers.

How do you interpret a good retention rate?

A good retention rate is not only measured by the high percentage but also by the impact it has on the business. For example, a 95% retention rate implies a 5% monthly loss of customers. Although at first glance it seems positive, at the end of a year, only 54 of the initial 100 customers would remain for every 5% churn. Small improvements in this rate can have a significant effect.

• 95% retention rate: This means that at the end of one year you will retain 54 out of every 100 customers.
• Lower churn rate: Dramatically improves financial results.

What is the retention standard in different industries?

Retention rates vary widely across industries. Having a clear understanding of what is good retention in your industry helps to make realistic comparisons.

Which industries have the best retention rates?

In general, SaaS companies have a good reputation with respect to retention with a rate close to 95%. However, the IoT (Internet of Things) industry stands out even more because devices such as cameras and sensors are difficult to uninstall. This is not necessarily due to better service, but to the nature of the product.

• SaaS: Retention around 95%.
• IoT: High retention, close to 100%, due to the complexity of uninstallation.

How does the type of product affect retention?

Product type has a direct impact on retention rate. A notable example is hardware products which, by their very nature, tend to be retained longer due to the difficulty of uninstallation. On the other hand, digital products, such as applications or services, allow users to move more easily between vendors.

• Hardware: High retention due to difficulty of uninstallation.
• Digital: Dynamic retention, dependent on the quality and usefulness of the service.

Should I focus more on retention or customer acquisition?

Many companies are torn between focusing their efforts on acquiring new customers or retaining existing ones. While customer acquisition may seem attractive, retention often has a more significant long-term impact.

What are poor retention practices?

In the attempt to improve retention, some companies may fall into bad practices, such as making it difficult to cancel services. This not only affects the company's reputation but can alienate current and future customers.

• Difficulty canceling: dissatisfied customers and possible loss of trust.
• Customer awareness: It is vital to be a product that customers want to return to because they find it valuable, not because they can't leave.

Retention should be a goal, but not at any cost. Understanding the dynamics of your industry and product will help you define what retention is really important and how to approach it in a healthy and sustainable way.