1,200 hours of research and writing has culminated in this expert guide to customer retention best practices. Within the overview below, you’ll find 30+ links to original articles written on the topic. For highest impact, click through to what you feel is most pertinent. Read them now or save for later.
Customer retention is crucial. It’s a leading indicator of your business’ health and a key metric to determine its ultimate valuation.
You may have heard the metaphor already, but trying to build a business with poor retention is like trying to fill a leaky bucket. No matter what you do, you can’t gain traction to create a healthy business.
But with the appropriate programs and strategies in place you can have a long-term impact on your revenue.
What is customer retention?
The definition of customer retention is the business’ ability to keep customers returning to a product for subsequent purchases, sessions, or engagements.
Customer retention reflects the ability of a company to deliver value within its competitive market. Therefore a customer retention program reaches across teams and disciplines to retain money for a company.
You don’t treat your significant other the same on your first date as you do on date 50 or date 250. In order to improve retention and make your relationship with your customers last, it is important to address the problems specific to each customer along their journey.
To simplify the evolution of a relationship, we break retention into three stages:
Here’s a deep dive into retention strategies by stage.
If you’re new to retention, spending time studying some user onboarding best practices is a worthy investment. We’ve put together the ultimate user onboarding resource to help you master this stage of the customer journey.
Many companies have an onboarding experience that gets new customers activated. But even if you have something implemented that may be working, have you considered iterating on this process? It took Sidekick more than a dozen growth experiments before they improved their new customer retention.
There are places outside of your product from which you can engage your seasoned customers. Consider building communities and using different mediums for communication. We present dozen of ideas for better customer engagement.
Stage 3: Empower power customers
Your power users are a special group. Customers who get consistent value out of your product and stick around for years will have a lot to say about your business. Their perspective on your product can be amplified to bring in more customers like them. Sean Ellis has a growth framework to do exactly this. It’s a great read.
Despite your best efforts to reduce churn, you may still have a whole graveyard full of dead—or inactive—customers. It’s a mistake to think these customers are gone forever. It’s easier—and more cost-effective—to re-ignite that initial spark than to acquire brand new customers.
We’ve also seen that relying on your customer support, sales, and marketing teams will help you fine-tune a holistic strategy going forward. We’ve written about a few cross-functional efforts to get users back in this post.
While it may be tempting to try any and all techniques for reducing churn, applying product focus will help you prioritize which areas to tackle first. As Hiten Shah advises in this post on product focus, find a unified goal to rally your team around.
If you have to let customers go, why not design the cancellation process to be as smooth as the onboarding process? While it’s counter-intuitive, improving your offboarding process can actually help combat churn. Here are some ideas for designing offboarding to create the best last impression possible.
There are thousands of tools that you could choose to help you with retention. We talked to a number of smart SaaS companies who shared the strategic and surprising ways they chose their retention stack.