[Editor's Note: The above image is provided courtesy of #WOCinTech Chat.]
Acquiring new customers is fun and rewarding, but it’s easy to fall into the trap of focusing exclusively on customer acquisition and dismissing the importance of customer retention.
Sure, every business needs new customers to continue growth, but you already possess the easiest and most predictable source of revenue. Often times, the difference between simply surviving and real exponential growth is ensuring your current customers stay.
That being said, customer retention can quickly become overwhelming for your team if you’re not efficient with your tactics. But there are many ways to improve the customer experience and reduce churn without overbearing your support, marketing, or development teams.
Here are 8 customer retention strategies that will increase user loyalty without flooding your team.
1. Ensure you’re bringing in the right leads
When businesses think about churn and customer retention, the focus is usually on product value.
Founders find themselves asking “What can we do to improve our product? Are there more features we can develop?” And while this is not wrong, improving the product itself is not the only way to increase user loyalty and decrease churn.
One important area to analyze is actually the front of the funnel. Customer retention starts all the way back at user acquisition. If your teams are bringing in leads that aren’t the best fit for your product, churn can quickly become out of control.
As you begin to think about customer retention strategies, start at the beginning of a users’ journey: How is your product being marketed? Are you promising features you can’t quite deliver on? Are you bringing in users whose needs don’t really match your offer?
Aligning your entire team is the best way to combat this potential issue. Create open lines of communication between marketing, sales, customer support, and product development teams. Sit down with every department and create/review your buyer personas (and personas for unfit customers).
Ensure your marketing and sales teams are incentivized to sell to the right leads and ignore the unfit ones, your support team knows how to spot an unfit customer coming through the pipeline, and your development team feels comfortable communicating openly about product updates.
2. Optimize your onboarding to create successful customers
Now that you’re bringing in the right leads, make sure they are being set up for success. User onboarding is the most important part of the user journey. You could be losing up to 75% of your new users within the first week.
Perfecting user onboarding is no simple task, but like most business tactics, it just takes time, testing, analyzing, and recurrent tweaking. Don’t make the mistake of setting your onboarding and moving on. Your onboarding protocols should be constantly tuned and tested to find what works for your customer base at any given time.
As a general rule, the more you assist and educate on the front end, the more likely those leads are to become successful customers. You’ll want to focus this education on product features, but more importantly, pushing customers to the Wow Moment. This is the moment when the user first has a big success with your product. At this point, they see the value, it’s actively improved their issue, and they’re hooked.
Users who never reach this “Wow moment” are almost certain to churn. Consider adding in more resources, education, and one-on-one engagement into your onboarding process. This will guide them into the wow moment faster. The quicker your product becomes a part of their daily life, the better your chances are of retaining that customer. More work on the front end leads to more success later on for your team and your customers.
Extra Reading: Intro to User Onboarding
3. Use social proof
Have you ever picked one restaurant over another because of positive Google reviews? Or bought a product because your favorite Instagram account promoted it? Whether negative or positive, social proof has a major effect on how people perceive the value of your business. And this affects both user acquisition and user loyalty.
Consistently show your customers how other users are succeeding on your platform. Add testimonials and reviews onto your website and integrated throughout your marketing materials. Highlight successful customers via podcasts or blog posts and share them with your active user base.
Exposing your customers to social proof not only inspires and encourages your customers, it also educates them on different ways they can leverage your product or service. Not to mention, people love to be featured and promoted for their successes. Aim to create customer stories on high-value customers to support your relationship with those accounts.
Social proof is a simple strategy to launch, and it’s a double whammy for your company, helping improve both user acquisition and user loyalty.
4. Consistently educate your customers
Your customer retention strategy should boil down to two consistent motives: Keeping customers engaged, and ensuring they see value in your product. One of the core reasons customers voluntarily churn is when they no longer see the value in your product. But sometimes, they simply may not understand the value they could be getting from your product.
Consistently show users how your product benefits them and how they could leverage it more effectively. As your customers advance, their needs will ebb and flow. Constant communication and education is the key to continually proving your worth.
Customer success teams are invaluable at this stage. Create a system of communication between your customer success and content team, so you can address customer concerns and questions on your blog. Automate email campaigns to deliver educational and value-adding content to your customers such as new feature releases, customer highlights, product hacks, and more.
Creating these resources will not only benefit your users, but your support team as well. As your CS team sees trends in questions, your content team can whip up posts to address them. This collaborative work will educate your customers and decrease the amount of time your customer service reps spend answering questions.
5. Automate failed payment recovery
Involuntary (or passive) churn is the easiest revenue leak to plug, since these customers don’t intentionally leave your product. Unlike the customers who churn out due to an issue with the product itself, these customers churn out because of billing issues.
It’s common to think failed payments and billing issues aren’t much of a big deal for your bottom line, what’s a few failed transactions? However, over the past several years, Churn Buster has regularly encountered companies with up to 50% of their total churn being attributed to those failed payments.
Luckily, up to 70% or more of these payment failures are able to be automagically recovered through proper dunning. Start by revising your current dunning system. How much work is your support team putting into recovering failed payments? How often are these attempts successful? You’re likely letting far too many customers slip through the cracks, and burdening your support team with unnecessary work.
You should never lose a customer involuntarily. Manual dunning can be overwhelming for your team. Automate failed payment recovery campaigns and plug this leak without adding to your team’s plate.
6. Optimize card-update processes
When you need to ask for payment info to be updated, make sure it’s simple and quick for the customer. Reduce friction in the process and ensure you don’t lose customers because of outdated card information.
Here are a few ways to streamline this process for your customers:
- Host dedicated card update pages—no modals or pop-ups!
- Make the page mobile-responsive.
- Bypass the log-in. Do not require your customers to input a username and password to update card information.
- Encrypt the page and keep your customers’ information safe.
7. Monitor customer engagement
Remember those two core motives you should focus your customer retention strategy on? Customer engagement and customer appreciation (understanding your value). The more your customers engage with your product, the more it becomes an integral part of their life. If you listen to Spotify every day or watch Hulu every night, you’re very unlikely to cancel those services. Customer usage is invaluable to track and analyze in order to prevent churn.
Set up systems to monitor and flag user inactivity, or activity that looks like someone may cancel soon (visiting the pricing page or looking for ways to cancel). Then, develop a system of communicating with those customers to re-engage them before they leave. This can be supplemented with email sequences and automated live-chat messages to prevent your support team from burning out.
8. Automate surveys to your customers
Customer insight is vital to improving retention and reducing churn. Understanding where your product excels, and where it falls short in the eyes of your customers can drive your entire team to work more efficiently.
Set up automated email campaigns to send surveys to your customers after a certain amount of time or engagement. Gather and track the responses then share high-level insights with the whole team. Use the data to improve your product, hone in your marketing tactics, and educate your customer success team.
Retention All Around
Losing customers is never good, but losing employees can be even worse. When you invest in customer success, you are also investing in your own employees. These tactics empower your team to take ownership over the company's overarching goals.
A people-first culture within your product will translate to your internal culture as well. Retention is two-fold: Start reducing churn and empowering your employees today.