Which choice is part of establishing a customer retention program?

Businesses tend to think of customer retention as a metric, losing sight of what matters the most: their customers.

It’s true that improving customer retention positively impacts revenue—research by Bain & Company found that increasing customer retention rates by just 5 percent can boost profits by up to 95 percent.

But at its core, customer retention is about building lasting relationships with your customers that make them feel valued.

This requires you to think of your customers as people, as opposed to a percentage, conversion, ticket, or sale.

Fostering the kinds of customer relationships that last through times of prosperity as well as uncertainty starts with building a set of skills and strategies to reduce customer churn and build loyalty.

What are customer retention strategies?

Customer retention strategies and customer retention programs are processes and initiatives businesses put in place to build customer loyalty and improve customer lifetime value.

The best customer retention programs don’t just get customers to buy more, they build authentic relationships and turn customers into brand ambassadors.

As Teresa Anania, VP of Global Customer Success and Renewals, Zendesk said: “Our goal shouldn’t be about the customer is buying from us. Our goal should be about them getting value.”

“Our goal shouldn’t be about the customer is buying from us. Our goal should be about them getting value.”Teresa Anania, VP of Global Customer Success and Renewals, Zendesk

Types of customer retention methods

Customer retention isn’t a responsibility that falls on one single team to earn for the entire business. It involves:

• The honesty of your marketing campaigns
• The transparency of your pricing models
• The ease of your sales cycle
• The quality of your actual products or services
• The speed and convenience of your customer service

Likewise, some types of customer retention programs might fall under marketing while others might involve your customer service or sales teams. The companies that create the best customer retention strategies understand how each part of the business works together to create a great experience for customers.

If Sally reaches out to return a blender, the company might keep her around by ensuring an agent is easy to reach and shows her empathy. That agent can then note the reason for the return in a CRM so the marketing team can send her an email with a discount for a different blender that better meets her needs. The support team can also share her feedback with the product team so they can make improvements.

How to improve customer retention

Improving customer retention starts with meeting customer expectations. And all year, every year at Zendesk, some of the world’s sharpest analysts are doing research and then painstakingly interpreting it to illuminate the coming year’s biggest trends in customer expectations. Here are a few:

1. Quick and easy resolutions
2. Access to preferred service channels
3. Opportunities to answer questions themselves via help centers
4. Personalized online experiences
5. Data protection and privacy

Read our blog to learn more about each trend. We’ll also dive deeper into some of them below.

12 customer retention strategies that work

Businesses often narrowly focus their strategies on growth and what it takes to get a potential customer in the door.

But only investing in customer acquisition and not prioritizing your existing customers doesn’t build loyalty and isn’t budget-smart.

In fact, acquiring a new customer is five to 25 times more expensive than retaining an existing one.

But retaining customers isn’t about luck—it requires teams to use their customer focus, transparency, and empathy skills while being strategic in how they do so.

Here are 12 examples of customer retention strategies to elevate your customer retention game.

1. Implement a Voice of Customer (VoC) program

Customers aren’t likely to stick around if they don’t feel heard.

A VoC program enables you to foster a feedback loop with your customers by making them active participants in your brand.

This involves using insights from your customer service analytics and satisfaction surveys to capture customer feedback.

The next step is to incorporate that feedback across the business.

“VoC programs are an important customer retention strategy because they give customers a seat at the table,” explained Stephanie Lee, Sr. Lifecycle Marketing Manager, Zendesk.

At Vimeo, support team members are looped in before every product launch. They look at designs, anticipate pain points, and voice common feature requests from customers. After launch, the support team shares how customers are receiving the new feature or product, tracking any pain points or issues.

2. Build trust through knowledge and community

According to Zendesk’s Customer Experience Trends Report 2021, customers prefer to help themselves—yet only a third of companies are delivering on customer expectations when it comes to self-service.

Harnessing the power of self-service with a knowledge base builds trust.

It empowers your customers with a one-stop-shop for information they know they can turn to whenever they get stuck. And forums build in peer-to-peer support, fostering brand loyalty through community.

Canva regularly updates its knowledge base with content tailored to where a user is in the customer journey. This includes specific articles where a new customer can find tips for getting started during the onboarding process.

3. Focus on the human touch

A study by Deloitte revealed that emotional connections drive customer loyalty—and even outperform discount incentives like loyalty rewards.

This requires brands to think beyond the kind of “buy five coffees, get one free” loyalty program.

Instead, they need to build real, human relationships.

“Build interpersonal rather than transactional relationships with your customers”

“Making personal connections with customers that go beyond your actual product is essential to retaining customers,” said Lee. “The most successful retention efforts build interpersonal rather than transactional relationships with your customers.”

Since your agents are on the frontlines interacting with your community of customers directly. They play an important role in fostering human connections with your customers.

Thrive Market trains its agents to become knowledgeable about natural foods because its members value understanding where their food comes from. This enables its customer service team to relate to customers on a more human level.

Agents engage customers in topics customers are passionate about.

As part of Birchbox’s Service Recovery Program, agents follow up with customers who rated an interaction poorly. Zappos sends customers flowers when they need help returning shoes for a loved one they lost.

4. Leverage AI to create proactive experiences

Another important retention strategy is being proactive. of companies competing on the basis of customer experience. Reacting to customers’ needs isn’t enough to stand out.

Customer expectations are higher than ever—so much so that customers today expect you to provide them with what they need before they even ask for it.

48% of customers are more likely to be loyal to brands using the latest technology to engage with them

Technology can help— of customers are more likely to be loyal to brands that use the latest technology to engage and connect with them.

Ultra Mobile deployed a chatbot on its website to connect customers with the right person, right away, before they bounce. Pinterest’s agents use AI to predict customer satisfaction during support conversations, before a customer takes a survey.

5. Communicate quickly and according to your customers’ channels of choice

Zendesk research found that communicating quickly and according to your customers’ channels of choice is a powerful driver of loyalty.

A great customer experience is an effortless one. Customers increasingly expect your business to meet them wherever they are, whether that’s on your website, mobile app, or social media.

Delivering an effortless experience across channels requires a connective layer of tissue that arms agents with context and conversation history.

If someone has to repeat themselves three different times to three different departments they aren’t likely to become a repeat customer.

Airbnb meets its customers wherever they are across the globe. It does so by providing help through the phone, email, social media, SMS, and social messaging channels.

Airbnb is able to deliver an effortless experience on the front through its sophisticated customer support software on the back that connects channels with the full view of the customer.

Agents have context to effectively help a customer no matter what channel that customer reaches out on. This gives them insight into the urgency of the problem, if a customer is on a trip or if they’re preparing for one, and their history with Airbnb.

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