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As we all know, customer retention is the most cost-effective way to drive revenue. It’s far more expensive to acquire net new business than it is to retain customers (up to five times more expensive); and retention has greater ROI (a retention rate increase of 5% can result in a profit increase of up to 95%). In addition, long-term customers drive revenue the most, which means it’s essential for any business at any stage of growth to have a solid customer retention strategy in place.
Customer retention requires long-term commitment, strong relationships, credibility, and trust between all parties involved. Read on to discover the essential building blocks of customer retention and learn how to keep customers coming back year after year.
Once a customer has purchased your product, there needs to be a seamless transition between sales and customer success, followed by a user-friendly onboarding process. An unpleasant or confusing onboarding experience can negatively impact the customer’s overall experience with your product. Onboarding is a CS team’s opportunity to guide customers toward success with the product. It should include frequent touchpoints, personalized experiences, and resources that help the customer implement the product into their workflow. Since onboarding sets the stage for the entire customer journey, a positive experience will increase each customer’s likelihood of retention or expansion in the long run.
Each customer is unique—they each have their specific needs and goals, and your team should personalize each touchpoint accordingly. After implementing and investing in a product, customers rightfully expect a customized experience. With this in mind, it’s crucial for every CSM to align early and often on each customer’s goals and provide product guidance accordingly. By sharing personalized insights and data at every touchpoint, CSMs can show an intimate understanding of their customers’ goals, which will ultimately lead to greater trust and retention. Make sure your CS team knows each customer’s goals and pain points, can deliver concrete ROI data, and is prepared to make adjustments in case the customer’s goals shift.
The same old generic business review presentations just aren’t working anymore. Your customer needs to be able to see the actual value of your product, or else they won’t stick around. Every presentation, email, or report you share with customers should be data-driven, digestible, and engaging.
Data-driven content refers to customer-facing resources that tell stories and prove product value through data in a digestible, compelling way. Data-driven content may include data visualizations like charts, graphs, and tables to make obscure data easier to understand. Customer success teams that go the extra mile to share data-driven content are more likely to build credibility and prove that their product has helped customers achieve their goals.
Customer success teams should serve as a primary way to drive revenue through expansion, while continuing to nurture customer relationships. To contribute to revenue growth, customer success professionals need visibility into data so they can share key insights with customers. CS team members should also be trained to look for and recognize account expansion opportunities throughout the customer journey, and they need to be able to communicate these with other departments to make sure opportunities aren’t missed.
The more your customer adopts your product or solution, the greater benefits they will see from it within their organization. That’s why it’s important to share insights on product usage with your customers, even if the data isn’t favorable. By providing insights into how often your customers are using the product or certain features, you can position yourself as a trusted advisor by sharing feedback for improvement.
Customer retention also requires a streamlined feedback loop between the customer, CS team, product team, sales team, and executives. In order to make sure the customers’ voices are heard across your organization, be sure to connect with customers frequently, use data to identify any warning signs, share any warning signs or direct feedback to key collaborators, and work cross functionally to fix any problems. Make sure customers are kept in the loop about any new developments or changes, and be mindful of any churn trends. Feedback loops will help your team remain responsive to customers’ needs, which in turn will build trust.
To learn more about how to drive customer retention in 2023, check out Matik's Customer Retention Handbook.