customer retention

10 Customer Retention Techniques Worth Your Time & Effort

Lola BarbierLast updated on September 22, 2023
9 min

Ready to build better conversations?

Simple to set up. Easy to use. Powerful integrations.

Get free access

Customer retention refers to how successfully a business manages to keep its paying customers. Customer retention means earning customers’ trust and repeated patronage.

Why is customer retention so important?

An oft-quoted statistic teaches us that improving customer retention by as little as 5% boosts profits by anywhere from 25% to 95%. This is why customer retention should absolutely be on your mind if your business hopes to become sustainable and profitable.

Customer retention and growth

Customer lifetime value, or CLV, is a crucial metric when it comes to customer retention. CLV is the projected revenue that a given customer will generate over the course of their relationship with your business. Calculating CLV is a rather complex operation but it will give you an idea of how valuable it is to cultivate long-term engagement with your customers.

customer retention

Indeed, increasing your average CLV by even a small fraction can have momentous repercussions on your bottom line. If 1,000 customers go from paying you 10€ a month to 12€ a month, that’s an extra 24k (or a 16.7% increase) to add to your yearly revenue. But it gets better: repeat customers tend to spend 60% more per transaction, and do so 90% more often than first-timers, according to a study by Rosetta Consulting. So emphasizing customer retention means that your overall growth could be exponential rather than constant.

Customer retention and churn

Different sources and studies determine that it is between 3 and 30 times more expensive to sign a new customer than to conserve an existing one. That’s a sure argument for choosing to be a farmer rather than a hunter.

Mitigating customer churn is a necessity for any business hoping to last. Otherwise, you’re just expending effort pumping a well into a pierced bucket. If you focus on patching up that bucket, you won’t have to pump the well as hard in order to fill it up. The way to stop customers leaving is to provide a product that helps them succeed and ensure they are satisfied by your service. A solid customer retention strategy will help you in that regard.

Read on to find out about customer retention techniques sure to help you keep customers around in the long run.

Delivering great customer service to reduce churn

More and more, customer service quality is the great differentiator when it comes to choosing a brand over another. In fact, 68% of consumers report being willing to spend more in order to obtain better customer service. Conversely, poor customer service increases a customer’s sensitivity to price and the likelihood that they will churn.

That’s all the incentive needed to try to improve the quality of your customer service and incentivize customer retention.

1. Indulge the need for speed

Speed ranks extremely high in client expectations of customer service. Frequent pain points for customers include long wait times and multiple transfers. Customers even recall favorably experiences where they obtained a quick answer to a question, even if that answer wasn’t what they hoped.

customer retention

In order to streamline your customer service, here are some suggestions.

Save your customers time. Implement interactive voice response, so that they’re always directed to the most competent person to solve their issue.
Save your customers effort. Add a click-to-call button or an automatic call back feature. This spares customers patience and frustration.

2. Get personal

Increasingly, customers base their patronage of a brand on shared values and an emotional attachment. Consequently, sacrificing the human aspect of customer service in favor or efficiency won’t get you anywhere. A balance of the two is key.

While customer loyalty and customer retention aren’t synonymous, the two do overlap: loyal customers, ones with an emotional attachment to your brand, are much less likely to churn. Personalized customer service is a formidable tool in the quest to earn customer’s loyalty.

customer retention

The right bedside manner is required from your customer service team. Qualities like empathy, patience, and diplomacy are absolutely crucial to customers feeling cared for and valued when they get in touch. Learning to cater to your customer’s specific expectations and needs isn’t easy, but it is worthwhile.

3. Secure the right channels

In an omnichannel model, your customers expect your customer service to meet them more than halfway. Customers need you to be where they need you to be. Offering customer service over multiple channels is no longer a choice, but the execution of your omnichannel strategy is easy to fumble.

Make the channels you offer available to customers depending on context, such as localization, expense, or need. Don’t offer a channel you cannot man properly, since customers expect consistency over different channels above all else. Lastly, let customer information flow freely and let your different service channels complement one another without silos. This flow will serve your customers as well as your team.

Focus on sustainability in customer retention

Customer retention requires you to craft a business model with an emphasis on the ceaseless accompaniment of customer relationship. Enabling customer success is crucial to giving customers an incentive to repeatedly remain with your business.

4. Track the customer journey

With the help of monitoring software, you can segment the progress of a customer’s relationship with your product. This will allow you to cater to more specific needs of particular customer groups, thus retaining them through personalized service.

New customers won’t need the same attention than old-timers, for instance. When deciding to introduce new features or new pricing, targeting a specific demographic will be more successful than lumping all customers together. The holy grail of SaaS companies is negative churn: a state in which your revenue from existing clients outweighs the revenue loss from attrition. This requires innovative and targeted product development, tailored to your customer’s stage in their journey.

5. Lead customers to success milestones

A company focused on customer success will strive to make their product an integral part of their customers’ growth and triumph. Consequently, those customers will find themselves relying on that business for their own success, and will be less likely to churn.

customer retention

Customer success is a discipline of its own, but it plays an integral part of any customer retention strategy. Empowering customers to succeed in their own right means that they will repeatedly make the decision to stick with you, and that that decision will always have value. If your product can manage to lead customers from one success milestone to another, then you’ll achieve improved customer retention.

To accompany customers from one milestone to the next, you need to provide qualitative and proactive customer service, relevant product updates according to customer’s needs, and educate customers about those updates.

Customer retention through education

Your product may be stellar, but if your customers don’t fully grasp its advantages, they are likely to churn. Educating customers to the ways in which your product will help them succeed is key to retaining them.

6. Make onboarding an asset

Customer retention starts the moment you’ve signed a new customer. The onboarding period is an opportunity to inform and educate your customers on the value of your product. Without dedicated onboarding processes, your customers might churn simply because they don’t see how your product applies to their personal needs.

In order to successfully promote product adoption, you need to put in the work. Introduce customers to specific features they’ll find most useful to their activity, and follow-up on their technical grasp of your product. The lapse of time between signup and the customer’s first success milestone must be as short as possible. However, this work has beneficial results: dedicated training during the onboarding period mitigates churn and decreases the chance of customers needing to call up support a ways down the line.

7. Provide self-service resources

In order to accompany and empower your customers every step of the way, self-service resources are important to consider.

Through self-service, the repetitive and common support and service scenarios can be smoothed out with minimal effort on the part of your team and your customers. A useful FAQ or relevant knowledge base can go a long way in letting customers adopt your product and solve problems without the hassle of contacting support.

This gives your support team more time to handle the pricklier customers, and shortens wait times for the latter. But mostly, the DIY approach to service gives customers (especially the emerging Millennial demographic) a sense of accomplishment and strengthens their bond with the brand in question.

Measuring your customer retention success

Finally, to get an idea of whether your implementation of the previous techniques is working out, you’ll need to monitor the evolution of your customer retention strategy.

8. Set KPIs around customer retention

KPIs, or key performance indicators, are set up to measure the efficiency and progress of every area of activity: sales, support, etc. Involve your team in setting realistic and useful goals for these indicators. The KPIs relevant to customer retention are many, and deserve their own in-depth explanation.

In short, customer retention is a discipline as important as lead conversion, calls per agent, or customer satisfaction. Without the dutiful tracking and improvement of your customer retention numbers, your business cannot hope to grow and thrive.

9. Implement loyalty programs

Loyalty programs seek to incentivize and reward repeated patronage of your business. They can involve deals, coupons, rebates, etc. Customer loyalty programs should be seen as away to reward repeat customers with several advantages, while encouraging members to make more frequent purchases.

customer retention

Loyalty programs have their limits, however. First, they don’t have a real effect on customer loyalty, in other words on their emotional attachment to your brand, nor on their likelihood of advocating it. Second, loyalty programs often fall short when a competitor offers an attractive alternative and when your own service frustrates and disappoints customers.

10. Embrace feedback and complaints

For a business hoping to retain customers, every complaint is an opportunity to save a relationship. Customer complaints give you a literal, actionable way to convince a customer (and perhaps a whole bunch of customers, since for every one vocal customer, sixteen have remained silent) to stay. Besides, successfully turning around a dissatisfied customer and going the extra mile for them is a great way to leave a lasting impression of spectacular service, and perhaps gain a brand advocate.

Embracing feedback in general is necessary to improve customer retention. Solicit customer input through the judicious use of customer feedback surveys and monitor engagement through data collection and analytics. Use feedback to introduce relevant changes, then monitor the effect of those changes and start from the top. This continuous feedback loop of improvement and engagement will help you retain customers.

When dealing with feedback, especially complaints, customers expect a commitment to transparency. Be open about the link between the feedback you received and its concrete applications. This lets customers feel involved and listened to. We are all more inclined to trust and value a company which treats its customers like humans, rather than numbers.

The quest for customer retention is a long game. The results of such an undertaking won’t be seen overnight, and a delicate balance must be struck. This is hard work, to be sure, but the results are well worth the effort.


Published on January 30, 2017.

Ready to build better conversations?

Aircall runs on the device you're using right now.