Written by Sophia Bernazzani @soph_bern
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What's better than acquiring
one new customer?
It sounds like a trick
question, but the answer isn't "acquiring two customers." It's
actually retaining an existing customer.
While there's a certain allure
that comes with capturing new customers, keeping customers coming back will
continually result in a greater ROI — and it costs 5-25X less.
But how do you create a
customer retention strategy that keeps your current customers engaged and
happy?
Free Resource:
Customer Churn Analysis Template
We've broken down some of the
most applicable customer retention strategies that the biggest brands are
currently using to inspire loyalty. From leveraging convenience to prioritizing
personalization, we’ll cover all the must-haves that any customer success or
marketing team can test out today.
How to Retain Customers
1. Track and analyze churn
metrics.
2. Implement a customer feedback
loop.
3. Maintain a customer
communication calendar.
4. Send a company newsletter.
5. Start a customer education
program.
6. Build trust with your
customers.
7. Offer unique services.
8. Start a customer retention
program.
1. Track and analyze churn
metrics.
You can't fix what you don't
understand. Companies should be diligently tracking and analyzing the number of
customers who churn, alongside the reasons that they may decide to churn.
To help you with that, we
created a Customer Churn Analysis Template.
Use this template to store and analyze qualitative and quantitative feedback to
better understand and reduce your churn rate – and increase retention.
2. Implement a customer
feedback loop.
It's hard to improve your
business if you don't know how your customers feel about it. To start retaining
customers, you need a process for obtaining customer feedback and
sharing that information with the rest of your organization. This is where a
customer feedback loop comes in. It provides a system for collecting,
analyzing, and distributing customer reviews and surveys.
There are a few ways to collect
customer feedback. The most common way is with a survey like Net Promoter Score®,
or you can ask customers to participate in user testing and focus groups. Using
a few of these methods regularly should provide your team with ample and
relevant customer feedback.
Once you’ve gathered them, you
should analyze your survey results by
looking for trends in customer behavior and other areas to enhance user
experience. Then, share this information with teams that will benefit from it
most.
For example, product reviews
should be distributed to engineers and development teams so they can address
flaws in your product's design. By using this system to collect and share
customer reviews, your business can efficiently address criticism and improve
the customer experience.
3. Maintain a customer
communication calendar.
Even if your customers aren't
reaching out with feedback, your team should be proactive in communicating with
them. If customers haven't interacted with your brand for a while, you should
reach out and re-establish your relationship. Consider adopting a communication
calendar to manage customer engagements and create opportunities to upsell and cross-sell.
A communication calendar is
a chart that keeps track of customer communication. It tells you the last time
that a customer has reached out and alerts you when existing customers haven't
interacted with your brand. This makes it easy to launch promotional offers
and proactive customer service features
that remove roadblocks before customers know they're there. For example, if a
customer's subscription is set to expire, you can send out an email letting
them know they need to renew their account.
4. Send a company newsletter.
A company newsletter is a
simple and cost-effective way of retaining customers. You can use email automation to
send updates or offers to all of your customers at once. And, you can send the
email using an RSS feed on a designated frequency, so you don't have to
manually update the content or remember to click "send." Even though
it's simple, newsletters can remind customers of your brand every time they
open their inbox.
5. Start a customer education
program.
A customer education program
demonstrates a long-term investment in your customer base. Under this
initiative, your business creates a variety of customer self-service tools
like a knowledge base and
a community forum. Then, customers use these features to locate solutions to
service problems before reaching out to your support team.
This program can extend beyond
your products and services as well. For example, HubSpot Academy courses
cover generic marketing, sales, and customer service topics. That way, HubSpot
customers know how to use the HubSpot tools in their everyday workflow. We'll
discuss HubSpot Academy later on, but this approach has become a proven
strategy for optimizing customer success.
6. Build trust with your
customers.
Two things are true when it
comes to building trust between your company and your customers:
·
Don’t assume they trust you because they buy from you.
·
Trust takes time to build.
When deciding to make a
purchase, 81% of customers say that trust is an important factor in
their decision. Building trust isn’t a one-size-fits-all tactic that any
business can implement overnight. After all, the definition of
trust is the “firm belief in the reliability, truth, ability, or strength of
someone or something.” Reliability is a key factor in building trust, so your
company should be consistent in delivering value to customers.
Consistently following through
on your brand promise and doing what you say you’ll do over time will have an
impact on whether or not your customers perceive your brand as trustworthy.
7. Offer unique services.
Offering a product or service
that’s superior to your competitors in the eyes of your customers is no easy
feat, but the reward is worth it in the long run. If you’ve developed a niche
for your business that solves a critical customer pain point, you’re on the
right track to retaining customers.
People ultimately buy what
holds value to them. Eliminating a bottleneck, removing a kink in a workflow,
or automating a process in a way that no other company can is a strong reason
for a customer to commit to your brand.
8. Start a customer retention
program.
A customer retention program is
an amalgamation of several types of tactics. There’s a program for just about
every business case. Below, we define customer retention programs, explain the
most common types, and show you examples of how to implement them within your
organization.
By retaining customers,
companies can help them derive more value from a product, encourage them to
share feedback to influence potential new customers, and start to build a
community of like-minded customers or users they can connect with. Below is a
list of strategies you can start executing this week.
Excellent Customer Retention
Strategies
1. Adopt customer service tools.
2. Apologize when you make
mistakes.
3. Inspire with a mission.
4. Empower customers with
convenience.
5. Leverage personalization.
6. Speak to your customers.
7. Create a divide between you and
your competitors.
8. Use subscriptions to bolster
the experience.
9. Use experiences to elicit
positive feelings.
10. Capitalize on social proof.
11. Educate your customers.
12. Surprise and delight.
13. Offer support on the right
platforms.
14. Thank your customers.
15. Provide incentives before a
customer can terminate their membership.
16. Build trust with your
customers.
17. Form a community around your
product or service.
18. Become part of the customer's
lifestyle.
19. Establish loyalty with a
one-of-a-kind product.
20. Offer a product or service that
solves a problem, but not every problem.
21. Keep things interesting.
22. Use gamification and referral
programs.
1. Adopt customer service tools.
If you're a small to mid-sized
business (SMB), your support team may only consist of a few people. However, as
you grow your customer base,
service demand might spike and force you to expand the bandwidth of your
support team. Hiring is expensive, which is why many businesses turn to
technology to supplement their customer service needs.
Customer Retention Strategy
Example: Santa Cruz Bicycles
Santa Cruz Bicycles did
exactly this when it realized its current approach to customer support wasn't
sustainable. While the company was committed to providing excellent customer
service, that standard became harder and harder to meet as more customers
purchased their bikes. Rider Support Lead, Kyle Harder, notes this challenge in
the graphic below.
Instead of hiring more reps,
Santa Cruz Bicycles turned to customer service tools. It started with a CRM, using the
software to record customer interactions and create support tickets. Reps used
the HubSpot task tool to
mark open support cases and ensure each ticket was responded to in a timely
manner. This kept the Santa Cruz support team organized while creating a more
delightful customer experience.
As the company grew, the
support team needed a more refined tool for its daily workflow. So, the
organization adopted Service Hub to
centralize customer service operations. What this meant was that all support
inquiries were funneled into a shared inbox where
reps could collaborate on complex service tickets. This made it easier for the
team to streamline urgent or sensitive issues, improving their likelihood of
preventing churn.
2. Apologize when you make
mistakes.
Try as you might to avoid them,
mistakes happen in business. Whether that mistake is a data breach, an outage,
a billing error, or something else, a mistake can put you at risk of losing
your valued customers — depending on how you handle it.
Customer Retention Strategy
Example: HubSpot
HubSpot Research found that, in
cases of company error, 96% of survey respondents would continue buying from a
company they regularly purchased from if they apologized and rectified the
situation. So what that means is, you need to develop a plan for the
inevitability of a mistake — and a plan for how to solve it promptly, apologize
honestly, and move forward to retain your loyal customers.
HubSpot had an experience with
this during INBOUND 2018 when an outage we suffered impacted numerous
enterprise customers. We worked quickly to fix the mistake, to learn how it
happened and to prevent it from happening again — and then, our COO and VP of
Customer Success apologized,
explained what had happened, and detailed how we would prevent it from happening again publicly
on our blog, and privately to customers via email.
3. Inspire with a mission.
Sometimes a brand inspires
loyalty not through tactics and systems, but through what it stands for —
its mission or vision.
Customer Retention Strategy
Example: TOMS
If you've ever watched Simon
Sinek's TED talk "Start with Why,"
you probably already know a thing or two about the importance of having a
mission, or "reason why."
TOMS has built its entire
business model around making the world a better place.
The way it does this is in its
"One for One" policy. For every pair of shoes that are purchased, it
gives a pair to people in need, thus far donating over 60 million pairs of new
shoes.
As consumers, we're focused on
the altruistic and environmental effects that our buying habits have beyond
consumption. Doing good is becoming more and more important to us.
This doesn't mean you should
build your marketing around an altruistic message just to do it. The lesson is
in finding something that people care about and positioning your brand around
it.
4. Empower customers with
convenience.
No matter the industry your
business is in, you want to make your product or service convenient to partake
in.
Customer Retention Strategy
Example: Starbucks
The coffee goliath Starbucks
has always been innovative with its marketing, especially in the customer
acquisition department.
In the early days, Starbucks
founders Zev Siegl, Jerry Baldwin, and Gordon Bowker focused on the sounds and
the smells inside their shops to provide a delightful customer experience.
But to grow, they had to get
innovative. One of their most innovative customer retention moves is the Mobile Order & Pay feature within
the app. Thanks to the feature, customers can order their coffee before they
even arrive at the shop.
The simplest takeaway here is
this: Make your products and services as accessible as possible. Identify the
desires and behaviors of your customers and create tools and systems that
empower them. Whether that be an app or other traditional methods, it's up to
you.
5. Leverage personalization.
When it comes to personalization,
people are the priority. Customers not only want to be treated like people
through the personalization of recommendations and service but also want to see
the humanity behind your brand.
Customer Retention Strategy
Example: Tesco
This supermarket giant has
a strong presence in the UK, with nearly 4,000 stores nationwide.
For huge brands like these,
coming across as authentic and human can be a challenge. Online grocery
shopping and self-service scanners are convenient, but people still like
dealing with other people.
Customer service is still
necessary, and the folks at Tesco have chosen to use Twitter as
a way of executing this with a human touch. They show they care by adding
personality to their interactions with customers. Check out this recent
interaction:
To get started with an approach
like this, identify your audience personas and communicate with them on their
preferred channels. It doesn't matter if it's email or Snapchat, as long as
it's where their attention is.
From here you should encourage
customers to speak directly with you through that channel. Make it part of your
messaging and remind them during and after the buying experience.
In addition, always add
personality to every message. Nobody likes a canned response, so make sure
whatever you're communicating sounds like it's coming from a human.
6. Speak to your customers.
It’s vital to any business to
both listen and connect with
your customers. You can learn from firsthand accounts of what is going right or
wrong in your strategy.
Customer Retention Strategy
Example: R&G Technologies
We've taken a look at several
B2C examples, but what about the B2B world? R&G Technologies is an
Australian IT support firm that has developed strong, long-term relationships
with its clients.
It solidifies these
relationships with rapid response times and strict service-level agreements
(SLAs). They get back to their clients quickly, and their employees have been
bought in on this by tying these KPIs to how much they earn.
However, the biggest lesson is
in its customer satisfaction surveys.
R&G Technologies clients have an opportunity to express what’s doing well
and what isn’t. This allows the company to identify unhappy customers before
they churn.
R&G focuses heavily on
asking the right questions in order to gain insights it can execute on. This
information is used to make better business decisions and retain customers.
Most importantly, these
discussions identify the challenges of R&G's audience. This can help inform
both the overall marketing and retention strategy.
Don't underestimate the power
of one-on-one conversations with your clients (especially if you're running an
online business).
7. Create a divide between you
and your competitors.
You have a reputation to
cultivate, and setting yourself apart from your competitors can help establish
authority.
Customer Retention Strategy
Example: Apple
Want your customers to see you
as the obvious choice over your competitors? Make note of Apple's strategy,
demonstrated by their "Mac vs. PC" ad campaign.
The campaign starred John
Hodgman as the inept PC and Justin Long as the cool, collected Mac. The two
would quip humorously over what made the Mac a better choice than a PC in a
really entertaining manner.
The "Mac vs. PC"
campaign was very tongue-in-cheek — and it generated a lot of dispute. Not only
that, but it divided the market and set Apple apart from its competitors by
identifying the kind of consumers who should buy Apple products.
Sticking true to who you are as
a brand shows integrity and makes it easier to attract customers that just
might become your strongest brand advocates.
Can you find a cause to fight
for (or against)? If your brand is more friendly than this, you can still put
some fire behind your story and create a rally effect. Don't be afraid to be a
little bold in your marketing to get the best results from this approach.
8. Use subscriptions to bolster
the experience.
Customers will be more inclined
to repeat purchases from your business if they get special treatment over
one-time buyers.
Customer Retention Strategy
Example: Amazon
It's unusual for a
commodity-based organization to implement a subscription service into its
business model.
Which is exactly what Amazon
created in the form of Prime. The subscription was originally created to bring
customers faster delivery. It generated a lot of controversy, but quickly
became popular with regular shoppers on the platform.
How can you use subscriptions
to achieve growth goals and increase customer
retention?
You don't need to charge a fee
for your subscription model in order to gain customer loyalty. Providing
benefits in the form of exclusive content and events is another way to leverage
this approach without spending a ton.
If you're going to take a page
directly from Amazon's playbook, then make sure you're offering something
people want. This goes back to customer development and understanding your
audience's desires and challenges.
9. Use experiences to elicit
positive feelings.
Experiential marketing has long
been used as a way for brands to create positive sentiments with customers, and
tapping into their sentiments is worth a try.
Customer Retention Strategy
Example: Coca-Cola
Coca-Cola had a 70-day campaign
around the 2012 Summer Olympics, and part of this was their "Coca-Cola
Beat Generator" app. This experience brought together music, sports, and
the Coca-Cola brand.
They showcased it during their
roadshow around the Olympics, using samples and sounds from the games
themselves. Users could then take the MP3 recording with them and share it via
social media. The results? 16,500 visits to the web version and 1.78 million
Facebook impressions.
Even though Coca-Cola produces
beverages, they figured out a way to tap into the positive hype around an event
by providing delightful customer experiences that reached beyond the
point-of-sale.
Look for ways to create
positive feelings in the form of new experiences outside of your main products,
services, and value propositions.
10. Capitalize on social proof.
Sometimes, the greatest form of
advertising isn't your own. In fact, customers are more likely to trust
opinions from family, friends, and other consumers more than branded content
and ads.
Customer Retention Strategy
Example: Codeacademy
Using the power of testimonials
and customer stories, Codeacademy uses
social proof to show prospective customers the value of its products — with
stories straight from the horse's mouth about how it helped them:
More than 97% of
customers report that online reviews influence their buying decisions, and
seeing that lots of other brands and individuals like you use a product
actually makes you want to do it, too — FOMO is a
powerful marketing and retention tactic.
Use customer testimonials and
information to attract new customers, and to convince existing ones to stick
around or upgrade their products. Highlight loyal customers — and their stories
— on your website or your social media networks and share their successes to
help you grow your own.
11. Educate your customers.
Just because your customer has
made a purchase from you doesn't mean you should stop trying to close the deal.
As they have more options available to them than ever before, go the extra mile
and offer them something invaluable — like a free educational program.
Customer Retention Strategy
Example: HubSpot Academy
Education is one of the most
valuable things you can offer your customers (or even just your site
visitors). HubSpot Academy offers
free marketing, sales, and customer service training videos and certifications
that anyone can use to learn and grow their skills — and some are only
available to HubSpot customers and partners. These unique, exclusive offerings
help make the HubSpot community more engaged and interested in staying in the
loop with our educational programs.
12. Surprise and delight.
Exceeding your customer’s
expectations with something like an added gift or benefit will give them joy
they won’t forget. Take this company’s approach for instance.
Customer Retention Strategy
Example: Chewy
People are passionate about how
much they love their pets. (Just ask my cat Leela, who I recently purchased a
condo for. It's only four feet tall, but still.)
Pet supply eCommerce company
Chewy knows its customers love their pets. It also knows they can buy pet food
and supplies from a variety of companies — including Amazon — for similar
prices.
So it uses the principle
of surprise reciprocity to
delight its customers with spur-of-the-moment gifts and cards for their pets.
These surprises don't need to be big or expensive, but they're memorable to
their customers by demonstrating care for their fur children. The example below
is a painting Chewy had commissioned of a customer's pet — other ideas could be
hand-written thank you letters or
free samples of new products.
13. Offer support on the right
platforms.
Part of knowing and
understanding your customers is knowing where they spend their days using your
product, and how they most want to get customer support when needed.
Customer Retention Strategy
Example: Slack
For the most part, Slack
functions perfectly as a workplace communication tool. But like all
technologies, it experiences the occasional outage that impacts its users —
many of whom immediately start asking their coworkers around them and the
Twittersphere if their Slack is down too (or, they make jokes that maybe they
were fired and had their Slack deactivated).
Luckily, Slack is there to help
when things go wrong. They know their users are active on Twitter, and
frequently update on Twitter in case of outages or other customer issues.
Spending time in your
customers' shoes to get to know how they look for help and information when
they do encounter issues will prevent them from feeling like they're in the
dark — and will make you reliable in their eyes, even when things go wrong.
14. Thank your customers.
To the point above, taking the
time to say thank you to your customers — outside of an email campaign or a
customer purchase — goes a long way toward building a brand that's lovable and
memorable.
Customer Retention Strategy
Example: Zappos
Clothing and shoe eCommerce
site Zappos is well-known for its excellent customer service — including its
efforts to show customers how much they care by saying thank you and sending
gifts.
In fact, Zappos even has
an office-wide tally of
how many gifts and surprises have been sent to customers during the previous
month to make sure the whole team is doing their part to show customers how
much they're appreciated.
Saying thank you is a simple
customer retention technique, but an effective one that distinguishes faceless
websites from beloved brands.
15. Provide incentives before a
customer can terminate their membership.
We’ve all been there before.
Your free trial, one-year subscription, or introductory pricing is set to
expire in a few days. You’ve set an alarm to cancel it before you’re charged
again. Companies like Adobe recognize this all-too-common churning technique
and put steps in place to mitigate it before it happens.
Customer Retention Strategy
Example: Adobe
Adobe offers Creative Cloud
Apps on a monthly subscription that locks customers into the service for one
year at a time. If they choose to cancel early, they have an option to receive
up to two months without payments in order to keep their Creative Cloud service.
The company is purposefully
attempting to retain customers with two months of a free subscription, and
they’re offering it at a time where customers are attempting to decide their
long-term relationship with the company. By stepping in at this stage, Adobe is
giving customers a reason to stay a little longer so the brand can prove its
value to them.
Your business can take this
technique one step further by giving extra care to these customers. Follow up
with them on a phone call or with a personalized email to understand how you
can make their experience better over the next two months.
16. Build trust with your
customers.
There are many different ways
to approach building customer trust, and one key method is to show that your
customers are valuable, and solve for their unique needs.
Customer Retention Strategy
Example: Classy Curlies
Classy Curlies builds
trust extremely well by doing something most business owners might scratch
their heads at — they show their customers how to accomplish the company’s
mission on their own.
On the website, customers will
find DIY kits and tutorials on how to care for their hair and skin with
everyday products they can find at home or in the grocery store. And by the
way, Classy Curlies also sells these DIY kits if customers want a more
specialized regimen.
By putting the customer first
and offering these solutions free of cost, Classy Curlies has been able to
build trust with customers and retain them. Whether they opt for the latest DIY
kit or they’re a faithful reader of the DIY blog, odds are a new customer will
find something at Classy Curlies that’ll keep them coming back for more.
17. Form a community around
your product or service.
Establishing a following for
your product or service can encourage prospective customers to join in on the
benefit.
Customer Retention Strategy
Example: Flo
For people who want to manage
their reproductive health, Flo offers a
world-class platform that predicts, analyzes, and tracks individual health
data. The app offers a calendar to easily view when their cycles begin and end
and delivers daily health insights to make sense of all those predictions. All
of these features and more are integral to managing individual health trends,
but there are plenty of apps on the internet that do this.
What sets Flo apart from its
competitors and helps them retain customers is the community within the app.
Flo provides prompts for the users to discuss, pairs each user with a virtual
health assistant, and even holds space for anonymous chat rooms where users can
discuss their health concerns privately.
While none of the offers Flo
provides to its users are meant to take the place of professional medical
advice, the community within this app bridges the isolation gap that some
people might feel while they wait for medical results, when they seek a medical
professional, or when they want recommendations for the best products to use. A
robust community like this isn’t easy to find, so Flo can retain customers with
this unique value-add.
18. Become part of the
customer's lifestyle.
You have the ability to turn
your company into something that inspires your audience and makes them want to
be associated with your brand. You can make your product offering a part of
their lifestyle.
Customer Retention Strategy
Example: Cash App
Repaying a friend for a round
of appetizers. Collecting funds for a surprise gift to a coworker. Tipping your
barber when you’re short on cash. There are virtually endless uses for a
finance app like Cash App that makes money sharing simple and quick.
Their business model is simple
— they make money off of a small fee that users pay when depositing money into
their bank accounts. But how exactly do they retain these customers so that
they’ll send and receive money through Cash App next time?
The secret to their customer
retention strategy isn’t really a secret at all. The magic lies in the
lifestyle that is attached to the app. It takes at least two people to use Cash
App — someone to send money and another to receive it. If you have at least one
friend, acquaintance, or coworker who uses the app, you’ll probably find
yourself using it at some point to pay them back for grabbing your morning
coffee.
So long as the app is
conveniently available on our phones and at least one other person we know uses
it, we’re likely to be a customer for much longer than we ever anticipated.
19. Establish loyalty with a
one-of-a-kind product.
How can you keep customers
coming back in a market full of competitors? By offering something that can’t
be replicated.
Customer Retention Strategy
Example: Bath & Body Works
If you’re anything like me,
you’re obsessed with wallflowers from Bath & Body Works. They smell
amazing, they’re usually on sale, and they last much longer than traditional
candles do. But I’m willing to bet that the scents, price, and longevity are
secondary to the reason the company has kept you as a brand loyal customer for
so long.
Their retention strategy? The
wallflower fragrance plug.
Only Bath and Body Works
wallflower fragrances will work in the corresponding plug-in and that’s not by
accident. AirWick, Glade, and other fragrance plug-ins are designed this way,
too. If you decide to purchase one brand over the other, you’re committing to
the scents that come with it. Once you’ve made the one-time purchase for the
plug-ins, it’ll be a lot harder to switch brands and make that one-time
investment again. So, you stay loyal to the brand and try out new scents and
products as they’re released.
20. Offer a product or service
that solves a problem, but not every problem.
As crazy as it sounds, you
don’t need a product offering that can do everything — but a product offering
that can do a handful of things extremely well.
Customer Retention Strategy
Example: Canva
When Canva first stepped into
the graphic design market, they were competing with some of the most
established brands in the industry. They were the little fish in a big pond.
Now, they’ve become a household name (at least in every tech and marketing
household).
This company has successfully
acquired new customers and retained existing ones over the last few years by
solving one problem: access to easy-to-use professional design tools for
non-designers.
Long gone are the days of
watching an Adobe Illustrator tutorial to whip up a great-looking social media
post. Canva offers ready-to-use templates, icons, elements, images, and fonts
that just about anyone can pick up and create a masterpiece with.
The company has listened to its
customer feedback and developed, even more, features like animations and
enterprise-level accounts so that non-designers can work faster and produce
high-quality work. Canva recognizes that it can’t replace Adobe Creative Suite,
and it doesn’t have to in order to retain its customers. It simply solves a
major problem to the best of its ability.
21. Keep things interesting.
If you can manage to change the
products you have for sale, you can potentially have customers coming back for
the novelty of surprise.
Customer Retention Strategy
Example: Five Below
A common shopping place for
teenagers to spend their allowances, Five Below is teaching those of us in the
business world some valuable lessons about customer retention.
The brick-and-mortar store
sells inexpensive products which is a commonality among businesses with high
customer retention rates. However, Five Below makes shopping for their
inexpensive products an experience for every customer who visits a store. Every
few weeks, Five Below switches
up a large portion of their inventory. On average, estimates show that a customer visits a Five Below
store every 99 days, so they’re bound to see something new
and exciting every time they shop.
The novel “fear of missing out”
(FOMO) can be a large factor in people visiting your store or website.
22. Use gamification and
referral programs.
Offering your pre-existing
loyal customers incentives to bring in more is a win-win situation for both
your company and their experience.
Customer Retention Strategy
Example: MeUndies
Touted as the most comfortable
pair of underwear in the world, MeUndies drives great retention through two
elements. The first, which we've already covered, is in its "reason
why."
The folks at MeUndies were
tired of the struggle that comes with finding a great, comfortable pair of
underwear. To back this up, they've fostered a strong culture and are very
transparent with the production process. They have an entire page dedicated to their
factory (it's beautiful by the way).
Although this makes for great
retention, our focus is on their clever referral program. Customers are
encouraged from the moment they purchase to refer a friend, and therewards are
worth it: For every friend you refer, you get $20 and they get 20% off their
first purchase.
There's a gamification element
that shows how far through the buying experience your friend is, too, including
a "nudge" button. If a friend adds a product to the cart but hasn't
completed checkout, you can use this to send an email reminder about it. In other
words, MeUndies has found a way to use their current customers to reduce cart
abandonment, while providing social proof in the process.
And there are many different
ways to conduct an effective customer retention program than just this single
example, and we’ll walk through them with you below.
Customer Retention Program
A customer retention program is
a specific initiative designed to encourage customer loyalty. Customer
retention programs can be company-led, such as instituting a customer
onboarding process, or customer-led, such as downloading and using a mobile app
to make purchases.
Client Retention Program Ideas
There are several types of
customer retention programs you can start for your business. If you're not sure
which is right for your company, here's a list of client retention programs you
can implement to delight your existing customers.
1. Onboarding Program
Onboarding is a customer success function
that teaches new customers how to use your product or service. Rather than
learning by themselves, customers are taught by a company representative who
personalizes the training according to their needs. This way, customers not
only save time but also understand how the product can help them achieve goals.
Onboarding is also an effective
customer retention tool because it prevents churn with
new customers. When users are first working with your product, they may get
frustrated if they don't understand how to use it. Customers have deadlines and
they can't afford to spend time learning how to master your product. Onboarding
ensures customers know how to utilize your products or services so they can complete
their goals on time.
At HubSpot, we offer a variety
of tools that each have their own distinct features. To help our customers get
the most from our tools, we offer a one- to three-month onboarding process
where company representatives work with customers once or twice a week. This
helps keep our customers happy and provides insight into common roadblocks we
can correct over time.
To learn more, read our guide
to starting an onboarding program.
2. Customer Loyalty Program
While it's important to focus
on customers who are at risk of churn, you shouldn’t forget about your loyal
customers in the process. After all, what will these customers think if they
see you putting all this effort in for users who don't love your brand yet? It
doesn't seem too fair, does it?
A customer loyalty program should
reward customers for their continued commitment. The more they shop and
interact with your business, the more they're rewarded. This keeps customers
happy because they're getting more from the experience than just your product
or service. And, since the top percentile of your customers spend much more
than the rest of your customer base, you'll want to make sure these users are
more than satisfied and coming back.
For example, many companies
offer a point-based program that gives customers points every time they make a
purchase. After they earn a certain amount of points, customers receive a free
product or discount. Since the points can only be redeemed at your business,
this incentivizes customers to return to your company and makes competitors
appear less appealing.
3. Customer Advisory Board
As we mentioned above, your
most loyal customers are also your most valuable ones. Not just because of the
money they spend, but also for the information they provide. They tell you why
they love your brand so much and make suggestions as to where you can improve
it.
Creating a panel of these
customers can help you fine-tune products and services at your business.
Additionally, you can increase customer advocacy by encouraging participants to
publicly share their reviews. Customer testimonials are
an effective method for building rapport when attracting and engaging potential
leads.
4. Corporate Social
Responsibility Program
Your company is more than just
a product or service. Customers look at everything your business buys, sells,
and advertises to its target audience. If they sense any inconsistency between
your brand's messaging and its actions, they'll be quick to recognize the
ingenuity.
Instead, it's important to get
involved with your customers beyond product and services. Think about their
values and create a Corporate Social Responsibility (CSR) program that pursues
a moral goal. While your initiative doesn't have to be as ambitious, getting
involved with your customers' communities and personal goals is a great way to
demonstrate your commitment to their needs.
5. Beta Testing Group
Similar to the feedback loop,
customer beta testing (also known as user testing)
groups serve a dual purpose — they provide your business with specific,
actionable observations from the customer’s POV and they keep customers
invested in the new feature your company is beta testing.
Beta testers are usually an
exclusive group since every customer isn’t asked to give their feedback on a
new feature due to bandwidth limitations. The exclusivity alone is usually
enough to entice customers to commit to the process for a few weeks or months,
but incentives like swag and gift cards can sweeten the deal.
Ideally, different customer
retention programs work hand-in-hand to create a customer experience that
cultivates loyalty, positive sentiment and makes customers more willing to
continue purchasing.
Which customer retention
strategy is right for your business?
Now that you’re equipped with a
list full of good customer retention strategies, which will you choose? Every
strategy won’t work for every business, but as long as you’re keeping the
customer’s needs in mind, they’ll be happy to purchase from you every chance
they get.
Editor's note: This post was
originally published in September 2019 and has been updated for
comprehensiveness.
Originally
published Feb 14, 2022 7:00:00 AM, updated February 14 2022
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