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Customer Retention Tactics

According to the Harvard Business School, an increase in customer retention by just 5 percent, can lead to an increase in profits by 25 percent to 95 percent.

Customer retention is important to growing any successful business. But if you’re like the majority of businesses out there today, you know it’s hard! Because let’s face it, no business is perfect, and no one likes losing customers.


The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is 5-20% (from Marketing Metrics). Research also shows that a 10% increase in customer retention results in a 30% increase in the value of the company (from Bain and Co.) Anyone working at a SaaS business knows that churn and customer renewals are critical metrics for the business. Yet, many marketing plans are so focused on customer acquisition that they largely ignore customer retention. (note: I did a more recent post on this topic here: Customer Retention: 7 Ideas for Marketers)

Here are some ideas to help you kick-start your customer retention marketing:

Regular Communication with Customized Content and Special Offers – This is the cornerstone of any good customer retention program and careful attention should be paid here. Most companies have some sort of newsletter to communicate with existing customers but fewer are actively making offers to their current install base that are customized according to what is already known about the customer. This can be as simple as offering an upgrade at a special price to tiered discounts or preferred access to support or other resources.
Customer service – Poor customer service accounts for 70% of customer loss. Marketing should take that number very seriously and work with the support team to deliver content that can help service folks do their job. In my experience many thorny customer service issues stem from a mismatch between the offering functionality and customer expectations. Marketing can create content that can set customer expectations for functionality and performance to make sure there is a good match between the product and what the customer is trying to do.
Listen (and then talk) – The overwhelming majority of unhappy customers will never communicate their dissatisfaction with you. Regularly checking in on customers will help you to see signs of an impending departure while there’s still time to fix problems. Regular customer contact through customer advisory boards or other less structured customer calls will often alert you to bigger problems before they’re reflected in your metrics. You can learn a lot by eavesdropping on customers on blogs, Twitter and forums. Just remember that if you are going to engage with customers in this way you need to be prepared to act on the issues they are complaining about
Loyalty programs, appreciation awards and customer referral rewards – rewarding customers for referring you new business or for repeat buys is always a good idea. Even in markets where that isn’t appropriate (I’ve never seen a rewards program for enterprise infrastructure software for example) you can still give customers an award to recognize them (and give them something to brag about).
Bring Your Customers Together – at the larger companies I worked at our annual user conference was one of the most successful marketing tactics we did. Companies with smaller user bases and budgets are doing similar things by creating online spaces (in the form of forums, custom social networks, facebook or LinkedIn groups, etc) where customers can connect, share their experiences and learn from each other.

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