Customer Retention Strategies & Why Customer Service Isn’t Enough

Customer Retention

You have a great product that solves somebody’s problems; you’re already attracting (mostly) your ideal customers; and your challenge now is keeping them. We’ll take these three facts as given, because without those ducklings in a row, you don’t have a shot at customer retention. Now, let’s talk about how to get your best shot at retaining customers and growing your business with the right customer retention strategy.

What is the customer retention definition?

Customer retention is the actions you take to reduce the numbers of customers leaving or failing to renew.

To keep customers coming back, as with a subscription-based model, or to earn repeat business, you have to do more that fix problems as they arise. You have to fix those problems before they even become problems.

No, we don’t expect you to pay a Tarot reader to predict when customers will have problems. You don’t need to be psychic at all, because by collecting the right data and using it effectively, you’ll always know how your customers are doing and which could use a little help.

Why Isn’t Customer Service Enough?

For one, a client contacting customer service is already showing signs of stress. Customers only ask for service when they’re already unhappy – and by the time you know a customer is at-risk, it’s often too late. Rather than waiting to hear from the customer, the idea behind customer success as a retention method is to have your fingers on the pulse of what clients need, allowing you to see early warning signs of attrition and identify opportunities to up-sell and cross-sell.

In short: You can’t afford to wait until your customers contact Customer Service.

Secondly, even if your Customer Service department solves the client’s problem so well the client goes away smiling, that’s not quite the same as the customer having success with your product or service. When your client relies on your product to achieve the results and benefits they want, that is success. And, the definition of success changes with each client.

Essentially: The question you should ask is not “how can I solve my customer’s problems?” but rather “how can I help my clients achieve the results they’re hoping for?”

The Customer Retention Process

The Art of Keeping Tabs on Your Customers

A good horse trainer knows to watch a horse’s ears for signals of what the horse is thinking, and whether it’s plotting to misbehave. There’s always a sign, and if the trainer catches that sign in time, he or she can prevent the behavior. People are no different. When someone disengages with your product or service, there are signs you can track. Look for gaps in login times, failure to complete profiles, sudden drop-offs in use, or if your product is something like an email marketing service, see if anyone is downloading their list of contacts. You may even want to have an exit survey. Once you know which behaviors indicate imminent departure, you can start to construct a plan.

The first step of your plan should be to find out which types of clients tend to leave, and which stay.

How To Identify Your Best Customers

Your best customers are the ones that offer the greatest Lifetime Value (LTV), and by identifying their common characteristics, your customer retention plan gains a focused target. You don’t need to retain everybody. You need to retain the right people. Look at which types of clients stay the longest, which ones stay for medium periods, and which customers check in and check out without unpacking their bags. Chances are, you’re spending the same amount of marketing money to acquire each segment, which means you may have some changes to make in your marketing strategies.

Now, you may find that your “best customers” – ie. Those who stay the longest – are the ones that never seem to check their auto-renewal payments. They might hang around for years, but if they’re not getting value from your product, they aren’t your best customers. Here’s why: The customers who deliver the best LTV are those who like your company and product so much, they’re happy to hear about upgrades, expansions, and additional services. And that paves the way for making more sales with less marketing spend.

5 Customer Retention Techniques to Keep Good Customers Coming Back

Now that you’ve developed systems to keep track of who leaves, when they leave, and why they leave, and you’ve identified your most valued customer types, it’s time to kick your customer retention strategies into high gear.

1) Start at the Beginning

Your customer retention strategy should start immediately, with the first contact you have with your prospective client. You’ll want to find the answer to one question: What do they want to gain from your product/service? Once you know their pain point and/or desired outcome, you can begin to help them achieve it.

2) Master the Sales-to-Customer-Success Handoff

Sales teams are in charge of landing new accounts, and in order to do so, they must first learn about each prospect’s business, problems, and desired outcomes. Ideally, the sales person in charge of winning a new account should work closely with a designated Customer Success team member, who can then keep track of whether the client is meeting his or her goals.

3) Stay on Client Radar with Meaningful Content

Whether they’re on your app or their Facebook page, you should have a presence on their desktop, smartphone, and tablet. But, you have to do it the right way (or they’ll block you), with strong content marketing that provides real value, along with active social media. However, you don’t have to be didactic 24-7. Don’t be afraid to use your social media to joke with users, answer questions, offer tips, and have conversations. Social media accounts are made to be interactive, yet many companies settle for shouting into the void.

4) Partner Wisely

Developing partnerships with complementary services can help you expand your reach, increase your usefulness, and make it more difficult for people to leave. You can either join an established company or invite other companies to build add-ons and integrations for your product.

5) Check Your Progress with CAC and LTV

You can find the ROI of your customer retention efforts by tracking your Cost to Acquire a New Customer (CAC). CAC calculations should include product cost, research, development, and marketing: everything you need to convince a potential customer to buy. Then divide the total costs of acquisition by total new customers within a specified period of time.

If your CAC number is higher than your LTV, either your retention efforts are failing, or you have a bigger problem, like:

  • Your marketing efforts aren’t reaching your target demographic.
  • That target demographic shifted since the last time you checked.
  • Your buyer persona is inaccurate.
  • Your keywords are off.
  • Your messaging is off (on your website, offer pages, CTAs and ads).

But, if your marketing efforts are on track and you’re employing customer success tactics effectively, you’ll find that lifetime value increases, CAC decreases, and your revenue skyrockets.



Chief Strategy Officer at @Inturact. Moderator at @ProductHunt &@GrowthHackers. Co-Founder [email protected] & @SaaSCommunity. Previously: Growth at @InboundOrg.
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