The Positive Power of Customer Retention in Direct Mail



Today, we wanted to talk about something that’s often overlooked in everyday marketing – the incredible power of customer retention. We all know how exciting it is to acquire new customers, but sometimes, it’s the folks who’ve been with us for a while that deserve more of our attention.


First things first, let’s talk about money. Customer acquisition can be expensive, and it often involves a lot of trial and error to find the right audience and messaging that works. On the other hand, retaining existing customers is usually far more cost-effective. Research suggests that it is five to six times more expensive to find a new client than it is to reactivate an existing client (American Express, 2023). When you’ve got a loyal customer base, the cost per sale tends to be lower because you don’t have to spend as much on advertising and promotions to keep them coming back.


You might be asking, well how do I even calculate my customer retention rate? Thankfully, there is a very simple formula available to help you out.


The formula for customer retention rate is:


Customer retention rate = ((Total customers – New customers) / Initial customers) x 100 


For example: Imagine you start the year with 15 customers, gain two new customers in the first quarter, and have one customer churn [(16 – 2) / 15)] x 100 = 93% retention 


Here’s another example: You have 50 customers, you gain 20 new customers, and 15 customers churn:[ ( 55 – 20 ) / 50 )] x 100 = 70% retention 


Improve your CRT


The Benefits of Customer Retention

One of the significant benefits of customer retention is that it provides a more predictable revenue stream. When you rely solely on acquiring new customers, your income can fluctuate wildly, making it challenging to manage your business effectively. Loyal customers, however, provide a steady income, allowing you to plan your marketing and business strategies more accurately. Only a 5% increase in customer retention can increase company revenue by 25-95% (Hubspot, 2022)


This leads on to the idea that loyal customers spend more. This might seem like a no-brainer, but it’s a point worth emphasising. Loyal customers tend to spend more over time than first-time buyers. When someone is already familiar with your brand and has had a good experience, they’re more likely to make repeat purchases. In fact, some studies suggest that loyal customers can be up to ten times more valuable than their initial purchase.


It’s important to note that customer retention isn’t just about making sales – it’s about building trust and nurturing relationships with your customers. By continually engaging with your existing customers, you’re showing that you care about them beyond just making a sale. Trust and emotional connections are often stronger with long-time customers, and this can turn them into brand advocates who recommend your products or services to their friends and family.


Your existing customers can provide you with invaluable feedback that can help improve your products or services. They’ve been with you through thick and thin and can offer insights into what’s working and what could be better. This information can help you make informed decisions to enhance your offerings and keep your customers happy.


If you want to see how your customer retention compares to other companies in your industry, check out the below stats provided by Statista in 2020 


Retail: 63%

Banking: 75%

Telecom: 78%

IT: 81%

Insurance: 83%

Professional services: 84%

Media: 84%


(Source: Statista, 2020)


If you notice that your customer retention is falling below the average customer retention for your industry, keep reading to see how automated direct mail can help you meet this and even exceed this number.


Automated Direct Mail’s Role


Now, let’s connect the dots between customer retention and Paperplanes. Our Automated direct mail model allows you to engage with your existing customers regularly without much manual effort. We can help you to set up personalised campaigns, offer exclusive deals, and segment your customers with high degrees of accuracy so that we can ensure that we are targeting the correct customers for your preferred campaign types. We also provide monthly deep-dives so that you know exactly how much ROI you are getting each month along with any changes in your average basket values as a result of your campaigns. This consistent checking in on your campaigns strengthens the relationship with your customers and keeps them coming back for more.


In conclusion, while acquiring new customers is essential for business growth, customer retention should never be underestimated. It’s not just about keeping the status quo; it’s about growing your business steadily, predictably, and with the support of loyal customers who value your brand. When you combine the power of customer retention with the efficiency of automated direct mail, you’re setting yourself up for long-term success. So, remember to give your existing customers some love – they’re your real treasures!


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read more:




Barron, S.B. (2022) Here’s why customer retention is so important for roi, customer loyalty, and growth, HubSpot Blog. Available at: (Accessed: 09 January 2024). 


Statista Research Department and 6, J. (2022) Customer satisfaction: Retention rates by industry worldwide 2018, Statista. Available at: (Accessed: 09 January 2024). 


Silver, K. (2023) Customer acquisition vs. Customer Retention Marketing, Business Class: Trends and Insights | American Express. Available at: (Accessed: 09 January 2024).