Retaining Customers In An Economic Downturn

In the face of the ongoing U.S. economic downturn, it's never been more important to retain your current customers.

The U.S. economy contracted by 0.6% in Q2 2024, and consumer confidence has dropped nearly 10% year-over-year. Inflation remains high at 4%, with interest rates around 5.5%—the highest since 2007. Looking forward, many economists forecast further slowdown, with a potential recession looming in 2025.

During times like these, customer retention is critical, particularly for customers on annual or multi-year contracts. Acquiring a new customer can cost 5 to 7 times more than retaining an existing one, and improving retention by just 5% can increase profits by 25% to 95%.

As new business becomes scarcer, focusing on solidifying your base of loyal customers is essential. If you don’t have full clarity on which of your annual or multi-year contract customers might churn at renewal, you aren’t doing enough. With rising costs, it's critical to have real-time insights into customer satisfaction and behavior to address concerns before they turn to a competitor.

Now is the time to double down on retention strategies and protect your existing revenue streams