Customer retention refers to the processes and activities of an organization that aim to reduce customer churn and/or prevent customers switching to a competitor. Increasing customer loyalty is a key goal of any business as it has been proven that there is more value in keeping existing customers than acquiring new ones. However, despite this knowledge, customer retention has often taken a back seat to driving sales. Fortunately, as industries become more customer oriented this trend continues to change.

For most customer experience programs, reduced customer churn is typically the main objective as it is one of the few tangible means of linking customer loyalty to revenue and often leads to new ways to fund CX improvement efforts, such as the development of new customer loyalty programs.

To gauge the effectiveness of customer retention initiatives, organizations will deploy surveys to their customers at different stages in their journey. Often, these surveys include questions that are used to calculate loyalty in a way that can be easily measured and scaled, such as a Net Promoter Score. An example of one of these questions may be: “On a scale of 0-10 how likely are you to recommend our company to a friend or colleague?". In instances where customer churn is unavoidable, customer loss surveys are also used as a way to understand what made a client leave and how to provide a better customer experience in the future. By identifying particular pain points in the customer journey, companies can work to prioritize improvements that directly impact the customer experience.

What Are the Benefits of Customer Retention?

Benefits of investing in customer retention and customer retention programs include:

• Sustainable company growth

• Increased CLV (Customer Lifetime Value) as well as other preferred customer retention statistic or metric – the longer customers stay loyal, the more they tend to spend

• Historical data from customers (behavioral data, purchase history) that can help organizations make better business decisions

• Acquisition of new customers via positive word of mouth from existing clients

How Do You Retain Customers?

Retaining customer require the integration of several key strategies, including:

• Providing great channels of communication for customers to get in touch with you when things go wrong, in the channel they deem appropriate

• Building Customer Success strategies for account management teams – focusing not only on customer retention metrics, but more importantly on the value customers get from your products and services

• Implementing a Voice of the Customer program that focuses on measuring customer experience – a program that will put powerful insights in the hands of those who can take action and drive improvements at every stage of the customer experience journey.