What is customer retention? (2024)

The following tips provide businesses with a good starting point when it comes to improving customer retention. Taken together, they can serve as a solid foundation for a successful customer retention strategy.

1. Improve user onboarding
2. Create an achievable roadmap with your customers
3. Use client feedback to find weaknesses and constantly improve
4. Understand your clients with customer experience and journey mapping
5. Get personal with social media support
6. Segment customers to deliver the right content at the right time
7. Use automated emails to encourage inactive users to take action
8. Upsell to existing customers
9. Identify customers that are likely to churn
10. Create a personalised customer loyalty programme
11. Create a referral programme

One key reason for churn is that users simply do not understand how to get the most out of a product. During the onboarding process, a company should ensure that the client is aware of the key benefits that a product offers.

One great way to do this is through training sessions that teach users about best practices and standardised workflows. Giving your customers the tools they need to succeed will maximise customer satisfaction and decrease churn over time.

Be realistic when it comes to setting and delivering on customer expectations. What levels of success did comparable businesses achieve? Take the time to schedule a session to jointly map out a roadmap that your new client is comfortable with.

The roadmap should include with realistic milestones and achievable goals. Key players, such as the customer success team, should be able to easily access this customer roadmap and act on this.

User feedback is absolutely essential when it comes to improving customer retention. This is relatively self-evident, as the way a client feels and perceives your brand ultimately determines whether they will become a loyal customer or jump ship.

Businesses need to gather accurate feedback from their users. This can be accomplished through satisfaction surveys or a feedback bar on the website or platform where users can submit feedback while they are using the product.

Customer experience mapping and customer journey mapping refer to the process of charting your customers’ interactions with your brand across all touchpoints. The more you understand the different journeys customers take en route to purchasing, the more you can optimise their customer experience.

Brands like Aston Martin were able to create a truly unique and highly personalised customer experience benefit from extreme customer loyalty and excellent retention rates.

Social media is the channel of choice when it comes to immediate response. Clients expect immediate and personalised customer service and social media really lends itself well to this task. Social media is a great way to quickly resolve potential customer support issues or queries.

What’s more, it’s also a great way to a create a connected and unified customer experience.

The way a business collects, groups and ultimately acts on data is vital to its success. Sales CRM software usually allows the segmentation of prospects and customers into groups based on how they interact with your brand. Businesses can use these insights to tailor marketing campaigns to the individual level of awareness of its customers and prospects.

When it comes to retargeting efforts, email segmentation is the key to delivering the right content at the right time. A loyal existing customer does not want to receive offers for an initial purchase. Companies, such as Perkbox have witnessed great success by using email nurturing campaigns based on segmented customer and prospect data.

One way to increase retention is by ensuring customers are as active as possible. If a user has remained inactive for a while, an automated email through your CRM system can induce this user to take action.

For example, if you are tracking how users interact with your product and notice that they have only used a small array of the features, an email explaining how to use other features could re-ignite their interest. Emails could include educational content such as best practice guides or successful case studies from other customers.

This strategy is best aimed at relatively inactive users. Users that are already comfortable and active with the product will not appreciate a barrage of automated emails.

Upselling is a great way to boost customer retention amongst loyal customers. By convincing them of the need for a premium or upgraded service, they become more invested in your brand.

Using existing content assets such as ebooks and whitepapers is a great way of reminding existing customers about all the features product offers while ensuring that they remain as active as possible.

One strong argument for basing KPIs around customer satisfaction is that it makes it easier to identify customer that are are likely to churn. Often, there are many warning signs before a user churns, including level of activity. If a user has not used the product for 30 days, a business should look into this and find out why.

Some businesses use a traffic light system. Green signifies users that are happy with the product and very unlikely to churn. Amber is reserved for users that potentially have an open issue, but that this issue is not critical. Red is for users with a serious risk of churning. This could be due to a serious complaint levelled against the company, or simply that they have expressed that they are not satisfied. Efforts should be prioritised to keep the at-risk users from churning.

A customer loyalty programme is a great way of giving something back to customers while at the same time offering a chance to build a personal connection.

Companies like Belly are enjoying great success in providing retailers with a trackable loyalty points programme and insightful analytics into customer behaviour.

A referral programme can incentivise satisfied customers and increase customer loyalty. By offering upgrades, credits or other extras to existing clients, you can greatly increase the number of new signups while engaging your existing users at the same time.

Actively turning your most loyal customers into brand ambassadors increases their emotional connection to your brand - and that boosts retention.