7 Customer Retention Programs That Work

Do you want to retain more customers? A customer retention program is the best way to increase retention, reduce churn and grow revenue.

Research by HBR found that an increase in customer retention by just 5 percent, can lead to an increase in profit by 25 to 95 percent. That’s a serious stat that can’t be laughed at.

Additional research by John Fleming and Jim Asplund found that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm.

These two research studies clearly show that focusing on retention and keeping customers engaged can add significant revenue to your bottom line.

To increase customer retention, I propose you implement a customer retention program. In this post, I’ll take you through seven customer retention programs that reduce churn, boost customer lifetime value and increase revenue.


1. Deliver proactive customer service

This involves anticipating problems before they occur and proactively offering solutions before problems get out of hand. Companies with high retention rates have systems in place to prevent problems from happening, and when they do happen, they have procedures that get the problems solved, quickly.

Proactive service is about anticipating customer complaints and addressing concerns before they happen. A great example of anticipatory service is displayed by many major airlines. Everyone hates a delayed flight, there’s nothing worse than having to wait hours at an airport. The best airlines proactively contact their customers to inform them of delays. A simple text message with something like, “Flight BS150 has been delayed by 50 minutes due to air traffic” is a common way they deliver proactive customer service.

Think about what services and day to day tasks you can take a more anticipatory approach towards.

Are you looking for an easy way to get started? I recommend you ask for customer feedback. Conducting surveys can help identify areas of concern that you can try to proactively address in the future.

Related: 19 Ways to Get More Customer Feedback


2. Offer a consistent customer experience

Consistency is important to delivering amazing customer experiences that build loyalty. A loyal customer is a lot less likely to defect to a competitor. The Net Promoter System found that promoters (what they call loyal customers) defect at lower rates than other customers; resulting in longer, more profitable relationships with a company.

Offering a consistent customer experience involves having all departments talking to each other. Marketing needs to talk to sales; sales needs to talk to customer support. All departments should have shared goals in what customer experience needs to be delivered to each customer.

The best companies recognize that customers interact with different parts of the organization and across multiple touch points. They know customers engage with different employees when they make a purchase, when they’re getting service and support, and when they’re talking to billing or accounts.

Implement a customer experience strategy and start delivering a service that builds loyalty.


3. Focus on exceeding customer expectations

“Here we go again Ross, another blog talking about exceeding expectations…”

Yes, I hear you… but guess what, it still makes my list of customer retention programs.

Why? Because setting, meeting and exceeding customer expectations is still the number one way to increase customer retention. Your customers love being WOWed and they love it when you go above and beyond what is expected.

Exceeding customer expectations involves delivering a service that goes the extra mile. Whether it is remembering a special occasion, spontaneously sending a bouquet of flowers, or offering a free ticket to an event; these are all examples of exceptional service.

When customers have high expectations and the reality fall short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, luxury resort, for example, might receive a lower satisfaction rating than a budget motel—even though its facilities and service would be deemed superior in ‘absolute’ terms.” – Marketing Metrics

Customer expectations set the bar for customer satisfaction and also affect repurchase decisions. If a customer feels like you under-delivered, they won’t come back and buy from you again.

Are you ready to learn more about expectations? Read this: The Complete Guide to Customer Expectations


4. Learn, measure and use the Net Promoter Score

The Net Promoter Score (NPS) is a powerful tool to measure and evaluate customer loyalty. Since we know customer loyalty directly affects customer retention, it can be used to help increase retention rates.

The NPS works by sending a quick, one question survey to your customers that asks them;

“How likely is it that you would recommend Company X [or Product X] to a friend or colleague?”

The question has a 1-10 rating scale for respondents to answer. With 10 being extremely likely to recommend and 0 being not at all likely.

To learn more about the NPS, read my popular post explaining Net Promoter Score.

NPS is used to better understand how happy your customers are. This in term gives you a good indication of how many customers are not happy and likely to defect to competitors. NPS calls your unhappy customers “Detractors” and they are the ones you should be concerned about and are ‘at risk’.

By using the NPS, you can see who your Detractors are, and follow them up to quickly resolve any problems and retain their business. It’s a great tool to proactively address concerns before it’s too late.

Looking for an alternative to NPS ?
Client Heartbeat is a simple customer feedback tool automates the feedback process. It surveys customers, measures satisfaction and identifies customers that are ‘at risk’ of leaving. Retain more customers with Client Heartbeat.
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5. Track and trend customer satisfaction

Measuring customer satisfaction will give you more insight into how happy your customers are. 96% of your customers won’t tell you when they are unhappy and will not repurchase. Using a customer satisfaction tool, you can proactively gather customer feedback and see how happy they are with your service.

Tracking changes in customer satisfaction is important so you can see whether the initiatives you have implemented are having a positive or negative impact. You want to be able to see if overall satisfaction has improved, and whether individual satisfaction for unhappy customers has improved.

On the flip side, you also want to know if satisfaction has declined. This gives you the ability to proactively flag them and follow up.  By knowing who is unhappy, you can quickly address ‘at risk’ customers and retain their business.

monitor customer satisfaction

Track and Trend Customer Satisfaction


6. Delight customers by being personal

Personalized service builds rapport, trust and stronger customer relationships. Your customers don’t want to feel like they are speaking to a ‘brand’, ‘company’, or an automated email system.

Being personalized with all communication is important to show that you care. It shows that you value their business and are genuinely interested in a two way business relationship.

Implementing a personalized service is easier than you think.

Here are five quick tips I recommend:

  • In all communications, always address customers by their name.
  • Show that you can by remembering special occasions.
  • Check in with customers spontaneously, invite them to business events and share interesting content.
  • Tailor marketing messages based on customer profiles – send relevant offers, content and emails.


7. Build dependency by becoming a trusted advisor

Become the trusted advisor on all things inside your area of expertise. For example, if you’re an IT Support company, be the IT Guy that offers advice around anything to do with technology, even mobile phones!

This takes a bit of extra commitment and means you will offer some services and time, free of charge. But it significantly improves your business relationships and creates ‘sticky’ customers that won’t defect to competitors.

Start by offering free advice around particular topics of interest to customers. I like to recommend starting a blog and offering webinar Q&A’s around specific topics. Keep the conversation open and encourage engagement.

By becoming a trusted source, you can build a relationship which leads to a dependency. They trust you and rely on you to give the best advice; you become an integral part of their business success. Now all of a sudden, your value isn’t just in the service or product you sell, it’s also in the intangible advice and experience you offer by being their trusted advisor.

See also: Becoming a Trusted Advisor: The Ten Behaviors


Retention programs boost revenue and reduce churn

Customer retention is important to all growing businesses.

How can a company grow if it keeps churning customers?

Use these customer retention programs to build stronger relationships and create a better experience for your customers. This will help you increase customer retention, reduce customer churn and increase overall revenue.

By increasing retention you also boost customer lifetime value. Your customers will spend more money and they’ll make more repeat purchases.

Gordon Tan

Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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