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Customer Success

Customer Success

8 strategies and tactics to improve customer retention

Build better customer relationships, increase retention, and grow LTV with these strategies.

Chloe Rose

Chloe Rose
Sep 14, 2023

19 min read

Customer retention is a familiar challenge for growing companies, but managing churn has become especially difficult as inflation drives up prices and, with it, customer expectations. 

When customer success teams work to boost value for every customer, their organizations spend less and make more. That’s because the longer a customer stays with you, the more valuable they are. They’re more likely to continue purchasing your products and services, and they cost less than new customers to retain. They can also help bring in other customers through word-of-mouth. 

In this article, we share eight of our favorite tried and true customer retention strategies, outline common reasons for losing customers, and cover how Calendly can help your team retain more customers.

The value of customer retention

Customer retention costs less than customer acquisition

Studies suggest that it costs businesses anywhere from five to 25 times more to acquire a new customer than to retain an existing one. This makes sense in context: creating trust and loyalty from scratch demands more resources than strengthening ties with current customers who already know and love your brand.

Returning customers spend more 

Repeat customers aren’t just less expensive. They also spend more on average. Research shows that loyal customers are 23% more likely to spend with you than other businesses, and increasing customer retention rates by 5% increases profits by 25% to 95%.

Customer loyalty generates word-of-mouth marketing from trusted sources

Have you ever sought a friend’s advice on what new software to buy? Have you ever been that friend, gushing about your favorite app? If so, then you know the power of word-of-mouth marketing. It won’t surprise you to learn that 88% of consumers say that they trust recommendations from people they know above all other forms of marketing messaging. The numbers clearly show how customer satisfaction and loyalty goes way beyond the money spent by a single individual.

8 customer retention strategies that work

The art of successful customer retention begins with relationships. Customers want to feel valued, and they will reward businesses that put effort into providing meaningful support and positive experiences.

Our top 8 retention strategies revolve around that fundamental understanding:

1. Personalize your messaging and offers

Personalization is one of the cornerstones of successful customer retention. Customers prefer businesses that treat them like unique people, not just numbers on a spreadsheet, and they’ll respond positively when businesses express appreciation and investment in an ongoing relationship.

The numbers back this up: 78% of people said personalized communication from a company would make them more likely to buy from that company again. That’s because adding a personal touch, even a small one, demonstrates that your business:

  • Cares about their time and won’t bombard them with irrelevant information

  • Is more likely to deliver exactly what they want each time

  • Will be more responsive when they have a question

  • Will anticipate their needs

  • Is open to receiving customer feedback

Many marketing automation tools let you segment audiences based on their needs, industries, and demographics, then personalize your messaging to specific segments. For example: Say you’re a software company that sells a complex suite of tools. First-time users might appreciate invitations to guided tutorials and basic tips, while veterans are more interested in advanced features. With audience segmentation, both user types only receive messages relevant to their experience level.

2. Make your communications relevant

An important element of your communication strategy is relevance. Customers want you to respect their time and energy, and nothing gets customers hitting that unsubscribe button faster than irrelevant spam.

Communications customers appreciate are:

  • Reminders (again, personalized, when possible!) for upcoming appointments, deliveries, and subscription renewals. These communications are helpful for your customers, remind them of your brand, and encourage repeat purchases.

  • Feedback requests after a specific purchase or service, followed up by a thank you. Reaching out for feedback via customer surveys is an excellent way to show that you care about their experience.

  • Information about products or services that the customer has already purchased. This shows that you’re invested in bringing long-term value to your customer’s purchase and can include upgrade offers, walkthroughs, and deals on relevant add-ons or accessories.

Increase adoption and reduce churn with these CS strategies and automations

E-book: Increase adoption and reduce churn with these CS strategies and automations

Customer success experts share how to proactively identify signs your customers may churn — and how to provide the kind of value that keeps those customers engaged.

3. Reward customer loyalty

When customers feel valued, they're more likely to stick around. A customer loyalty program is an excellent way to keep customers coming back. 

Here are a few perks you can include in a loyalty program:

  • Personalized rewards, like birthday gifts and messages

  • Loyalty program points customers can collect and trade in for more products

  • Early bird offers for new products

  • Exclusive promotions and events for members only

  • Referral programs that reward customers for sharing their promo code with friends or on social media

The first step to creating a solid customer loyalty program is to figure out which type of program makes the most sense for your business. Should customers pay a flat fee to join, or be added automatically after their first purchase? Should they accrue points based on the value of their purchases, or only when they buy specific items? 

When you’re ready to launch, make sure you reach out to existing customers with personalized messages to promote your new program. Offering bonus points to these loyal customers for signing up is a great touch!

4. Collect and boost customer testimonials

Did you know that 72% of consumers say positive reviews and testimonials make them trust a business more? That’s a huge boost to your credibility for very little investment.

It makes sense: Would you go to the restaurant with no online reviews or the one with a few dozen thumbs up? Even recommendations from strangers go a long way.

Collecting and boosting social proof is a great way to reinforce customer loyalty among the people you enlist to provide them. Their success is your success! 

Ask for a customer testimonial right after every successful service experience, when it’s still fresh in their mind. This tells customers two things: you care about their happiness and success, and you value their opinion. When your satisfied customers actively reflect on positive encounters with your organization and put them into words, it reinforces the good experience and their connection with your brand.

Testimonials can range from short pull-quotes to long interviews. So while email and text are two quick and easy ways of asking for small reviews, if you think a customer might be willing to go into greater detail about their experience, then reach out to schedule a call.

5. Build customer profiles and keep them updated

Customer profiles are internal documents containing key information about your customer base. These can include their basic information, like age range and location, and more detailed customer data, like buying habits and interaction history.

These profiles allow you to dig deeper into how (and why) customers are engaging with your business and products. Your CX team can then leverage these insights to create more personalized experiences.

CRM platforms like Salesforce and HubSpot can help you track and compile information about your customers at every step of the customer journey. CRMs are especially helpful when you integrate them with the other software your sales, marketing, and CX teams use, like your scheduling automation, customer service, sales automation, and email marketing software.

“We can easily go back and reference what customers need and product feedback they might have shared to ensure we're delivering a great experience. It's a great way to keep a record of that customer relationship and better understand that partnership over time.”

Testimonial author

Emily Sandy

Senior Customer Success Manager at Calendly

For example, when a customer reaches out for help with a product via customer service software like Zendesk, the interaction gets recorded and added to their profile in the CRM. When they reach out again later with a similar problem, your team will know which team member the customer spoke with and what they’ve already tried. 

Customer profiles don’t just make your CX team more efficient; they tell customers you’re invested in seeing them succeed. Solving a problem quickly can build more brand loyalty than not having a problem at all.

That said, remember that concerns over data privacy are at an all-time high. Maintaining transparency around your business’ data collection practices is critical to building customer trust.

6. Offer subscriptions

The subscription model isn’t a good fit for every business, but offering special treatment to repeat customers can help keep retention numbers high. The reason is simple: Provided your customer is satisfied with your services, paying for the same subscription service every month is easier than turning elsewhere.

The trick is to make the benefits to subscribers over one-time buyers clear and relevant, such as access to exclusive content and deals related to a customer’s specific interaction history. Offering incentives can dramatically lower customer churn rates.

When Amazon Prime launched in 2005, it was designed to provide faster delivery times to loyal shoppers. It’s since ballooned out into a massive ecosystem of adjacent services, like free shipping, credit card rewards programs, and Prime Video streaming. By providing multiple, diverse benefits under a single subscription umbrella, Amazon enjoys extraordinarily high customer retention rates.

Keep in mind you don’t need to charge a fee for subscriptions, and many businesses offer tiered subscriptions that begin with a free, limited version. “Freemium” plans allow customers to dip their toes in while your business puts other retention strategies in motion.

7. Understand and calculate customer retention rate (CRR)

An important tool for mastering effective customer retention strategies is the customer retention rate (CRR). Even if your business isn’t losing customers, knowing how to calculate your CRR will help you project the long-term health of your business and stay one step ahead of any potential problems. Your CRR tells you how many customers you retained over a given time period.

The CRR formula:

CRR over a year = (number of customers at the end – number of new customers) / number of customers at the beginning

Here’s an example: You had 400 customers at the beginning of the year and 300 customers at the end of the year. Fifty are new customers (started during the year). Using the formula you get: (300–50)/400 = 0.63 or 63%.

This means that, of the 400 customers who started the year with you, 63% of them stayed while 37% of them left. You can do this math over any time period to see how your CRR changes over time. Do you have seasonal highs? How do new competitors affect your numbers?

Your CRR can be an early warning sign for problems, though it’s worth remembering that the CRR alone can’t provide you with specific reasons for customer loss or solutions. If your CRR drops too far below your industry’s average for two straight quarters, it’s time to conduct a thorough investigation.

8. Monitor other customer retention metrics

In addition to CRR, companies should regularly monitor these other useful customer retention metrics for insights.

Customer lifetime value (CLTV)

Customer lifetime value (CLTV or CLV) is a metric that indicates how much value you’re gaining from your returning customers, on average. Basically, the longer a customer stays with you, the more money they’ve spent on your subscriptions and products.

The CLTV formula:

CLTV = (average spend per customer x average customer lifespan)

Let’s dig in with an example. Disney Plus subscribers in the US pay $11 a month. If the average subscriber stays with the platform for one year, then the CTLV is ($11 x 12) = $132.

Comparing CTLV trends over time can help you suss out potential problems and opportunities. A dropping CTLV, for instance, can indicate issues with customer retention; perhaps your customers are spending less or leaving early, and you need to optimize your pricing and upselling efforts.

Repeat customer rate (RCR)

Your repeat customer rate (RCR) shows the percentage of customers who have made at least two purchases with you during a certain period. It’s extremely helpful in evaluating overall customer satisfaction and habits.

The RCR formula:

RCR (%) = (number of customers who have purchased before / total number of customers) Ă— 100

For example, if your e-commerce website had 1,000 customers complete a purchase in the past week and 200 of them were returning customers, your RCR is (200 / 1000) x 100 = 20%.

You can adjust this formula to account for different time frames to find inflection points, such as consumer trends, price changes, and marketing campaigns.

Purchase frequency

On the flip side of RCR is your customers’ purchase frequency. Purchase frequency tells you how many times customers made a purchase from you within a certain time period and is another strong indicator of customer satisfaction and habits. 

Generally, the higher the number the better. When the same person buys from you multiple times (pushing up your purchase frequency score), it’s a good sign. It means you’ve retained them during that period.

The formula for purchase frequency:

Purchase frequency = (number of orders / number of unique customers)

For example, say you run an online tutoring company and you want to evaluate how well a new service is doing. Over one month, 200 sessions were booked by 40 unique customers. Your purchase frequency was: (200/40) = 5. Great! This means that your average customer booked five tutoring sessions with your company that month — a strong indicator for positive retention. 

Average order value (AOV)

Your average order value (AOV) tells you the average amount customers spend per order. When you compare your AOV month-over-month, this number can help you evaluate (and then predict) trends in customer purchasing habits. Are there certain times of the year when customers spend more on your products? Does it coincide with seasonal events like Christmas or back-to-school? These insights can influence your pricing strategies, marketing efforts, and when you offer deals.

The formula for calculating your AOV:

AOV = (revenue / number of orders)

Many companies monitor their AOV at monthly intervals to spot trends and opportunities. For example, say your ecommerce jewelry store brought in $25,000 in June with a total of 960 orders, then $20,000 in July with the same number of orders. Your AOV is ($25,000 / 960) = $26 in June and ($20,000/960) = $21 in July. What might have brought that number down?

Common reasons for losing customers

When your business starts losing customers, your priority should be to figure out why and then decide how to pivot. Many common reasons for customer churn mirror the above retention strategies; when you fail to respect your customers, they won’t stick around!

Lack of follow-up

Whether you’re going through emails, phone calls, or notifications, follow-ups are essential to building new customer relationships and retaining the ones you already have. 

Make sure you tailor your follow-ups to each customer situation. For example, if a customer calls your help line with a problem, your follow-up should mention their specific issue and the solution your agent offered. Adding additional resources to your follow-ups, like links to relevant pages in your knowledge base, are another great touch. These small bits of personalization show customers that you care about their experience and that they can expect high quality service every time they have an issue.

Here are five basic steps to improve your follow-up game:

  1. Make a schedule for follow-ups. (Aim for sometime in the first 24-48 hours.)

  2. Use automation to schedule and send follow-ups so you never forget.

  3. Track follow-up stats, like the open rate on follow-up emails.

  4. Personalize your follow-ups using customer profiles. (Try including their name and referring to the problem they reached out about.)

  5. Invite customers to complete a survey about their experience. Surveys have the two-fold benefit of helping you improve your customer service while also telling customers that you value their unique opinion.

Lack of customer profiles

When you don’t have robust customer profiles, personalizing your interactions with customers becomes difficult and sends the wrong message to people who have interacted with you previously. It says, “We don’t remember you or what your needs are.”

Having no customer profiles also leaves your CX team in the lurch, without enough data points to meet customers’ needs or expectations during a service interaction. Without access to basic customer information, such as their name and purchase history, reps are stuck gathering these details before helping, wasting your organization’s time and that of your customer.

Now compare that interaction with one that begins with a rep greeting the customer by name, with information about their purchase history and pain points in front of them. These human touches help drive retention by making customers feel heard and valued. 

Difficulty in getting through to customer service

Nothing quite compares to the frustration of trying and failing to reach customer service when you’re having a problem. Conversely, easy access to customer support reflects well on your business.

It’s helpful to look at customer service and success interactions as opportunities instead of points of failure. A positive customer experience goes a long way toward building trust and loyalty.

How can you give customers quicker access to support and success? Scheduling automation is one great tool that can help smooth out the process. Instead of having to email back and forth to schedule a meeting, clients can book a call with your team directly in just a couple of clicks. Customers get the services they need faster and more efficiently, which tells them you respect their time and are eager to help.

Use Calendly to make your customer retention strategy effective and easy

Customer success teams use scheduling automation to improve response times and create a consistent, responsive customer experience. The results? Higher customer satisfaction, more retention, and less churn. A study conducted by Forrester Consulting found that Calendly drove a 1.5% increase in customer renewal rates, boosting annual profits by $180,000.

With Calendly, your team can:

  • Integrate with Salesforce and other CRMs, so customer profiles are updated in real time without spending time on data entry.

  • Create team pages that let customers select from several options to meet with your team, whether they need tech help, have a pricing question, or want to schedule user training.

  • Automatically send personalized emails and texts to customers before and after your meetings.

  • Sync availability from multiple calendars, including Google Calendar, Outlook, Office 365, and Exchange.

  • Embed Calendly into your website for one-click booking that improves response times.

  • Route requests according to your customers’ needs, eliminating manual work.

  • Track meeting data, like no-shows, cancellations, and popular meeting times to improve your team’s effectiveness. 

The Total Economic Impact™ of Calendly

A study conducted by Forrester Consulting found that Calendly provided customers a 318% ROI over three years. Read the full study for real customer insights about the benefits of using Calendly.

[eBook] The Total Economic Impact of Calendly (TEI)

Automate meeting reminders and follow-ups with Workflows

With Calendly’s Workflows, you can automate personalized messages for meeting follow-ups and reminders, then apply them to all of your Calendly events. This consistent personalization helps your team meet customer expectations, and pre-scheduled event reminders and confirmations can improve meeting attendance and results.  

When CI Assante Wealth Management’s nearly 800 advisors started sending automated reminders through Workflows, it boosted their client outreach by 143%. 

“Setting up a Workflow and being able to assign it to many different Event Types saves the advisors significant time and money. We even started using the thank-you email as a digital business card.”

Testimonial author

Asiya Khan

Manager, Branch and Business Practice at CI Assante Wealth Management

Salesforce integration keeps customer profiles updated 

When you integrate Calendly with your Salesforce instance, Salesforce automatically creates a new lead, contact, or opportunity when someone new books a meeting with your team via Calendly. If the person already has a record in Salesforce, the event is added to the existing record, ensuring customer profiles are updated with all the right data.

Screen image of Calendly meeting Event Type embedded in Salesforce activity record
When a customer or lead books a meeting through Calendly, the Salesforce integration adds the event to their Salesforce record.

Having up-to-date customer profiles allows reps to quickly access all of the relevant information about a customer, like their meeting history and recent purchases, before jumping into a meeting.  Your team can skip the tedious data collection phase at the start of every meeting and show customers you’re ready to dig into their problem. 

Connect customers with the right reps, instantly

Calendly’s Round Robin scheduling lets you offer more availability to customers while managing your team’s workload more effectively. On your team scheduling page, the customer chooses the meeting time that works best for them, and Calendly automatically pairs them with the next available team member. Your team spends less time manually assigning meetings, and your customers can instantly book the time that works best for them.

And with Calendly Routing, you can deliver fast support by immediately connecting customers with the right CSR. Customers simply fill out a form and, based on their responses, are automatically matched to the  team member best suited to help them based on product knowledge, language, or department. For example, when a customer has a question about integrations, you can automatically route them to the booking page for your product specialists. 

Stylized screenshot of a customer success form that connects the customer with the Product Specialist Team.
With Calendly Routing, you can make sure customers can instantly book a meeting with the right rep or team.

Plus, Calendly’s real-time Salesforce lookup lets you automatically route known customers to their account owner’s booking page, so it’s easy for valuable customers to connect with the customer success team members who know their business best.

Connect all of your teams on the same software for better collaboration

Some scheduling platforms limit users to one-on-one meetings. Calendly’s team scheduling features bring teams together for more productive, collaborative meetings. 

For example, when a sales rep closes a new customer, they can easily book a collective onboarding meeting with the account manager and product specialist at a time that works for everyone. A seamless handoff from sales to customer success keeps your teams working efficiently, and an easy onboarding process creates a great customer experience from day one.

When all of your employees work from the same platform, admins can keep users aligned with company standards and best practices, ensuring customers always receive the same level of care no matter who they’re interacting with. 

With Calendly, HackerOne’s customer success team realized 169% ROI, booked 114% more meetings, and saved 588 hours on scheduling in a 12-month period. The CS team uses that reclaimed time to deliver more enablement training and collaborate better with cross-functional teams.

“That increase in meetings gives us more connection with our customers. We stay aligned with their goals and objectives, which leads to renewals and expansion, and that golden egg of net retention.”

Testimonial author

Alek Relyea

Manager, Customer Success at HackerOne

Ready to hit your customer retention goals?

Implementing successful customer retention tactics is essential for both growing and established businesses. Not only is it cheaper to retain existing customers, but they’re also an invaluable source for referrals, cross-selling, and boosting brand reputation.

Tackling one strategy at a time, imagine putting all of these customer retention initiatives into play: First your business starts tracking more customer retention metrics, and notices new trends. Then you invest in building better customer profiles and emphasizing personalization in all of your messaging. Automation helps carry some of the load, and before long your CX team starts seeing changes in customers’ satisfaction levels. Your retention numbers are up and your employees are working more efficiently.

When you’re ready to implement these customer retention strategies and create a consistent, responsive customer experience, get started with Calendly for free.

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Chloe Rose

Chloe Rose

Chloe Rose is a journalist and B2B SaaS content creator with over 8 years of reporting, research, and writing experience. She's currently working towards a degree in biochemistry at Concordia University and raising her scoundrel dog, Goose.

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