All You Need to Know About Customer Retention Management

It’s not really a secret. The longer your customers stay loyal to you, the more profitable they become. Once you know how to tweak your CS and post-sales ops strategy to minimize churn, you’ll unlock multiple growth and advocacy opportunities. Let’s take a closer look at how your customer retention management should look in 2024, along with some best practices to get started.

What is Customer Retention Management?

Customer retention management can be defined as a set of strategies meticulously crafted to inspire enduring loyalty among your clientele. Standing at the core of Customer Success, this is a state of commitment and loyalty where existing customers choose not to churn since your business  perfectly aligns with their requirements, needs, goals, beliefs, and ongoing concerns.

The effectiveness of a customer retention management strategy is elevated by taking customer data-driven actions based on the insights derived from communication data, user reviews, engagement metrics, and more.

Customer retention management essentially helps fight churn with 3 core practices:

1. Understanding Customer Needs: Customer retention management programs leverage customer insights gathered from surveys and communication data (support tickets, emails, chats, and more). These assessments unveil customer sentiment about your product and brand, offering valuable insights into the factors that influence their decision to stay.
   
2. Closing the Loop with Proactive Measures: Armed with the customer intelligence data mentioned in the previous step, it then becomes imperative to proactively address customer concerns. The art of “closing the loop” involves timely interventions at pivotal touchpoints and reaching out in real-time to deal with sentiment drops to improve account stickiness.
   
3. Data-Driven Optimization: Recognizing that not all churn drivers are equal in impact, effective customer retention management has to be data-driven. This unveils the financial ramifications of specific churn drivers, empowering strategic prioritization for optimal growth. This automated approach is extremely important while scaling up in today’s harsh economic climate.
   

Not only does it cost less to retain customers today, happy and satisfied customers are 140% more likely to spend more. They are highly inclined to engage more and participate in your upselling, cross-selling, and advocacy initiatives.  

Related: All You Need to Know About Customer Churn Prediction

Tools and Technologies in Customer Retention Management

Customer retention management is not an easy thing to pull off, especially with CS, sales, support, and marketing leaders now having to do more with less. There’s only so much you can do manually with limited resources. With the shaky economic situation all over the world, B2B businesses need to be spot on with their tech stacks to achieve good results, collect data, and break it down accurately. 

Here are the  key components of the customer retention management tech stack:

Customer Relationship Management (CRM) Systems

CRM systems help businesses, especially sales teams,  maintain accurate customer contact info, track interactions, and usually serve as the “single-source-of-truth” for all contacts and accounts. Its primary goals are improving cross-department collaboration/transparency, enhancing customer relationships, and boosting Customer Lifetime Value (CLV). This is crucial due to the immense volume of data generated on a daily basis.

With multiplying communication channels, CRM systems are helping manage customer data effectively with minimal friction. Each phone/Zoom call, email interaction with a customer, or engagement with a prospect generates valuable insights. In the past, this data was often scattered across offline mediums or even confined to individuals’ memories. CRM systems to the rescue.

Recommended solutions for 2024: Salesforce, HubSpot, Monday Sales CRM, Pipedrive, Capsule

Customer Analytics and Reporting Tools

Good customer retention management requires a data-driven mindset. This means that you should be looking closely into product key metrics, customer relationship KPIs, and have a clear snapshot into your accounts’ health, enabling you to identify trends in customer behavior and assess the effectiveness of your retention strategy.

However, for a deeper understanding of your customers and product enhancement, it’s crucial to delve into the motivations behind user actions. To achieve this, you need tools that offer qualitative insights into users’ opinions and emotions as they navigate through the customer journey. Customer analytics and reporting tools are helping businesses achieve just that.

Recommended solutions for 2024: Mixpanel, Staircase AI, Heap 

Communication and Engagement Platforms

Customer engagement platforms are software solutions designed to assist businesses in managing and enhancing the customer journey. They provide  different methods for engaging customers, such as in-app messages, educational videos or nurturing, getting customer feedback and other value-based engagements. This allows companies to achieve personalized customer experiences and internal learning.

Recommended solutions for 2024: Zendesk, Intercom, Freshdesk, EngageBay

Customer Retention Management Best Practices 

Without further ado, here are some best practices:

1. Think BEYOND traditional crisis management

Don’t wait for the s#!% to hit the fan. You need to feel the pulse continuously to retain your customers, which means keeping them happy, reducing friction, and making sure they are consistently engaged with your product. 

• Know your customer churn signals
• Set up your own alerts for customer churn signals like engagement drops, app usage changes, sudden rises in support tickets, or other predictive metrics
• Respond proactively to issues, or pull senior stakeholders as required

2. Prioritize customer sentiment

Businesses with effective customer retention management strategies treat customers as revenue generators and not cost centers. LTV is the name of the game today. Tracking customer sentiment is critical to maintaining long-time customer relationships. Don’t wait for NPS to detect 5% of your customers’ sentiment. Use AI-powered customer sentiment methods to evaluate sentiment in real time, 24/7.

• Track negative sentiment, even subtle ones, and treat it with care 
• Track positive sentiment and acknowledge it with appreciative gestures
• Positive sentiment can turn into an expansion opp or advocacy initiative

3. Build a robust loyalty framework

Keep your customers engaged and provide value consistently by implementing one or more customer loyalty programs. Understand that good customer loyalty programs only “push” your product to customers and ask them to take action, but excellent loyalty programs “push and pull” – you are also showing social proof to draw in customers to take additional actions to help you grow faster. 

Loyalty programs that integrate community or Customer Advisory Board (CAB) programs will likely yield superior results  by aligning customer benefits with their  actual needs, rather than what we assume they need. And no matter what you do – always reward customers for sharing their time, feedback, ideas, quotes, and suggestions. These are true gold mines.

4. Always listen to your customers

Tune in to customer feedback across all comm channels. This should ideally be done in realtime to prevent irreversible sentiment drops and save accounts before it’s too late. Not only will the product and support teams get accurate insights to optimize their work; understanding customer needs, long-term goals, and pain points is the best way to improve internal processes and align seamlessly.

5. Personalize your accounts’ outreach  

How can you scale without customers feeling the scale? Customize your customer retention management strategy to each use case, and trigger accurate CS playbooks or personalized emails based on user activity and customer signals.

Customer Retention Management in 2024 and Beyond 

As per our 2023 State of Customer Churn Report, churn was one of the biggest challenges B2B businesses faced in 2023. Based on the in-depth analysis of 1,000+ accounts with a total of 100,000+ engagements, 51% of customers churn out of the blue. Businesses now require a data-driven, unbiased, and accurate customer retention management approach.

There’s no way to sugarcoat this – the primary cause of churn is customers not receiving value. To accurately measure value, businesses must implement the latest customer retention management tools and employ AI-based continuous sentiment analysis and relationship tracking. The key to customer retention lies in extending beyond NPS surveys and email reach outs, while increasing valuable touchpoints through proactive outreach, strategic account advice, better QBRs, and relationship building. 

Retention problems sneak up on you, fast. Elevate your game now.