Most people think of software when they think of increasing Customer Retention. Software is good. But there’s something else that’s better than software. And, over time, this method will give you the confidence and ability to predictably increase your Customer Retention. In this article, Anita Toth from Anita Toth Inc will teach you what this method is and how it can help you.
The Challenge of Customer Retention
Like most big business problems, increasing Customer Retention is hard because there are many areas where the seeds of churn are planted along the customer’s journey.
Our company has identified 25 Churn Factors. These are areas where churn is likely to take root. The majority of these are within your company’s control. This means that as you make changes to these areas, your churn and retention rates will be affected.
Most companies have some activities related to increasing Customer Retention/reducing Churn. The problem is that these activities are scattered across the post-sale customer journey. By being scattered, they lose the benefits of leverage and momentum. This translates into a lot of work for very little gain.
The most common Customer Retention activities include metrics like Customer Health Scores and surveys like Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES). While these surveys and metrics are helpful in collecting some customer data, the customer insights they produce are surface-level. This means you get very little context into what’s really going on with your customers’ choices to stay or leave.
The problem with software solutions
Choosing software to increase retention seems like the right choice. And it might be. However, choosing software to increase retention often causes unintentional problems. It’s because software tends to amplify the existing problems within a company’s processes rather than improve them. Unless your processes are optimized, choosing software to increase your Customer Retention will cause you and your team frustration and wasted time. Not to mention that your customers will likely be negatively impacted. You end up focusing on fixing the new problems that the software has caused rather than moving the needle on increasing retention.
The best method for increasing Customer Retention
This will likely seem obvious when you read it, but most companies never create or implement this particular Customer Retention method. And yet it’s incredibly powerful and simple. The method is creating and implementing a Customer Retention strategy.
Most leaders don’t know where to start creating a retention strategy. It’s not their superpower. And it’s not likely yours either. But that’s ok. Creating and implementing Customer Retention Strategies is my superpower. And my passion. Let’s look at some of the benefits of a retention strategy.
Benefits of having a Customer Retention Strategy
The most obvious benefit of creating and implementing a Customer Retention Strategy is . . . that you’ll increase customer retention.
But there are second-order benefits that most people miss — each customer you retain also has unrealized future revenue growth opportunities. These opportunities include the chance to upsell, cross-sell, renew, and get referrals from those retained customers. That’s a lot of untapped revenue!
You will discover the areas in your processes that sow the seeds of churn.
Not only will you discover these areas, but you’ll also have some insights into the potential fixes for these problematic areas. A Customer Retention Strategy that encompasses more than surveys and scores will give you deep insights into the processes that cause your customers to move from being happy to unhappy. By focusing on fixing these problematic areas, you can start keeping more of your customers happy. And retain more of them too.
Increase Customer Retention
You will become the retention expert within your company.
In creating and implementing a cohesive Customer Retention Strategy, you will start leveraging the customer insights data you collect. You’ll also build momentum. You will begin to see potential retention opportunities more easily. Your executive team and board can’t help but be impressed with your ability to increase customer retention. A well-developed customer retention strategy will help you get there.
At this point, you may be thinking that a Customer Retention Strategy might be the answer to increasing your customer retention. You may be already using surveys and metrics like Customer Health Score, Net Promoter Score, Customer Satisfaction Score, and Customer Effort Score to help you. These are good. But they’re just the beginning.
A good Customer Retention Strategy includes the right mix of other activities like customer interviews, focus groups, and several others. These 2 activities alone will yield you deep customer insights that you’ve never had access to before. And it’s these insights that can help you understand where the seeds of churn are being planted across your customers’ journey so you can fix them.
[…] This means setting up periodic customer surveys to gather feedback. You’ll also want to analyze customer churn and retention rates to identify any price-related […]