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Jessica Malnik on September 3, 2020 • 28 minute read
Did you know it costs anywhere from 5x to 25x more to acquire a new customer than retain an existing one?
In addition, customer retention starts when someone first hears about your company or lands on your website––not after they buy something.
When you focus on providing a great experience throughout the entire customer journey, the odds of a customer sticking around greatly increases.
In this post, we’re sharing 26 ways to improve your customer retention rate, including:
Customer retention rate is the number of customers who are still using your service or products in a given time period.
Basically, it’s the opposite of churn rate.
Churn measures the number of customers who you are losing in a given time period.
While retention is the number of customers who are sticking around.
The easiest way to measure customer retention rate is:
Existing customers at the end of the time period – new customers added at the same time period divided by the number of customers at the start of the time period multiplied by 100.
Let’s say you measure customer retention rate on a quarterly basis.
If you started the quarter with 100 customers, added 50 new customers, and lost 20 customers this quarter, your customer retention rate would be 80%.
In an ideal world, your customer retention rate would be 100%.
However, this isn’t the most realistic goal. Even the best businesses with world-class customer experience will lose some customers.
The best way to see how you stack up is to set benchmarks based on your historical retention data. If the trendline is generally moving in the right direction, then you know your team is getting better at keeping customers around.
“One really good tip for improving customer retention is to improve your customer experience from top to bottom,” says Nate Rodriguez of LIFTOFF Digital. “Write out your existing touchpoints through 90 days of your service. Go through each step and brainstorm ways to optimize. Beginning implementing the optimizations one by one. Repeat this process every 6 months until it’s filled dialed in. This is simple but very effective way to improve customer retention rate.”
“Create an impressive onboarding process,” says Karl Armstrong of EpicWin App. “Right from the start, you have to show your customer your best foot forward. Show them that you care. After they purchase your product, guide them on how to use it. Set their expectations.. Let them know that they don’t need to exert too much effort if they need any help. From there, they will be guided and avoid feeling lost. Remember, first impressions last. Their confidence in your product will be set by their initial experiences.
Also, 75% of the customers purchase another product from a brand during the first few months after purchasing the initial product. This means, if your onboarding process is impressive, there is a high chance that they will immediately buy another product or service from you. Onboarding process is simply knowing their needs and wants right from the start. If you were able to set this right, their confidence and trust towards your product or brand will skyrocket. Thus, they will continue to support your product/services due to the high-quality service that you offer.”
Nicole Suther of Human Marketing adds, “For ecommerce businesses, send emails prior to their product arriving and give them tips on how to use your product. This will keep your customers excited about their new purchase and prepare them for what to expect. Then send emails after they’ve received their product to check-in and offer more engaging content. This should be customer-centric and focused on delighting customers beyond receiving the product they purchased. Finally, use next purchase predictive data and send timely emails or SMS messages to encourage them to purchase again. Your customers will be much more primed to purchase with you again if they’ve had a delightful experience the first time.”
“If a new customer doesn’t see the value of your product or service right away, then you don’t have a good shot at keeping them,” says Robert Baillieul. “For that reason, you have to provide users with some quick wins during the onboarding process. That triggers the aha or wow moment. If a customer immediately understands how your service will help them accomplish their goals, then they are far more likely to stick around.”
“Once they’ve made a purchase, check in with their satisfaction,” says Melanie Musson of AutoInsuranceEZ.com. “A little while later, communicate again. Make sure that when they have a question or need something, you are the first place they think of. The phrase, out of sight, out of mind is popular because it’s true. Keep yourselves in their sight and you’ll stay in their minds.”
Paige Arnof-Fenn of Mavens & Moguls says, “Emails are a great way to build relationships over time and keep the conversation going. It is just so much easier now. You do not need to be a big multinational company to have the tools at your disposal anymore. It is impossible to time your outreach so that you are in front of potential customers exactly when they need your help so I just try to stay in regular communication with them so that when they have a problem I can help them solve they will think of me first. We are all in the relationship business after all. Wasn’t it Woody Allen who said 90% of success is just showing up. It is a strategy that has worked for me. Email is fast, convenient, cheap and effective. For me you can’t beat it.”
Dan Christensen of Averse Pest Control adds, “Brands that experience consistently high turnover usually don’t last long. We’ve implemented a series of touch points with customers, including a “random” gift that lets customers know that we appreciate them. They get something that they weren’t expecting, so they are doubly impressed by us and end up being much more loyal than to our competition.”
For example, Noelle Brooks of Choice Premiums says, “It does not have to be overly complicated, or advanced – something as simple as a scripted email that you and your team uses and can customize will suffice.
The key is to make a genuine effort to understand your customer’s experience with your product and services. Rather than ask for a generic rating or refer to a survey (which we are all fatigued with), ask how the service or product helped solve (or not solve) a problem. Also, this should be a frequent check-in, even with those customers you believe are loyal. We all want to be heard and validated- the more often your customers experience this from you, the better.”
Jake Moffett of RevenueZen says, “Something all businesses should do is create content that helps all of their buyers, including those who have bought from you! This means businesses should create collateral that helps clients after they’ve become customers, well into the relationship. It might look like content that helps them use what you offer in a new way, it can be advice checklists that’ll help them out with their own work. Anything to engage clients after you’ve sold them is a great way to retain customers.
Andre Oentoro of Breadnbeyond agrees, “Creating easy-to-digest content is crucial for a better customer retention rate. Most of your visitors go to your website or interact with your brand for the first time and don’t convert. It doesn’t mean you aren’t a good brand. It just means they’re in a different spot in the sales funnel. They research and compare the price and quality of service. If you follow them up and stay on their radar by providing them with engaging content like videos, you’re able to keep that top of mind awareness. That way, your customers can feel familiar with your brand and trust your brand faster.”
“When a customer is loyal to your brand or you want them to be loyal, you can introduce a loyalty program for the customer,” says Adeel Shabir of Infinite Recovery. “This program can offer discounts on specific products for the customers. This way they can stay loyal towards your business.”
Andrew Ruditser of MAXBURST says, “One way for improving your retention rate and making sure your customers return, is to create a customer loyalty program. This program can include sending special email offers to customers that have made a purchase from your company previously. Whether it is free shipping on their next purchase, 10% off, etc. You can also amplify your program by creating a long term points system. For example, every 10 purchases that customer makes, they will receive a free item or 20 dollars off. This should be something more beneficial than a simple percentage off. This will intrigue customers to want to continue making purchases so that they receive these special perks and even more”
Daniel Heuer of Copyfluent adds, “For CPG brands, one of the best ways to improve customer retention is by having a rewards program. Rewards keep customers loyal and coming back on a regular basis because they know that they’ll get something out of it if they don’t switch to another brand. Starbucks is a great example of this.”
“Referral Programs are excellent for improving a company’s customer retention rate,” says Jack Paxton of VYPER. “With a referral program, your customers are rewarded for introducing new customers to your brand. Rewards can be anything such as discounts, vouchers, free products or services, and even cash.
Now, if a customer is motivated to take part in your referral program, they will continue to stay loyal to your brand. Especially if your referral program helps them to unlock exclusive VIP services like priority support.
Dropbox rewards users additional storage space for life for every new user they refer to the platform. A user will need to return to Dropbox to make use of that storage space. This is an excellent example of using a referral program to get your customers to keep on returning to your brand, while also fighting to reduce churn.”
“Getting feedback from customers is important, but how do you know people are telling you what they really think vs. what they think you want to hear,” says Sean Higgins of BetterYou. “The Mom Test is a framework you can use to get feedback from customers. It asks, what problems does the customer face? How are they solving those problems today? When was the last time they googled for a way to solve the problem?
You then dive into your product. What, if anything, is the customer finding value in? What, if anything, do they rarely use.
It’s called the Mom Test because you wouldn’t ask your mom if you have a great product. She loves you too much to tell you the hard truth you need to hear to get better” .
“Overdelivering is the best way to improve your customer retention rate,” says Jonathan Aufray of Growth Hackers Company. “Make sure your customers are amazed by your services and you always do more than was expected or requested.”
Irina Rauchenwald of Supercalifunnelistic adds, “I strongly believe that if you deliver more than you promised, your customers will be willing to stay with your product/service. Going above and beyond to provide things your customers didn’t expect will make them the most loyal advocates of your brand. For example, you could offer a free bonus or a discount, quickly fix the issue they face on a Zoom call, add a feature they requested to the next update, and so much more. Just think how you would want to be treated if you were in their shoes.”
For example, Michael Alexis of TeamBuilding says, “One way to improve your customer retention rate is with customer perks. Not random sales that are available to your entire email list, and not elaborate schemes that actually are a net-loss for them, but genuine perks. For example, we’ve sent our clients important and proprietary data, credit that really is exclusive to them, opportunities to participate in free team-building events, and more. A good way to identify a true customer perk is to ask if they or you have more to gain from the transaction; aim for them.”
And, Jessica Furlong of LIV Student adds, “One of the best ways to improve customer retention rate is to go above and beyond with customer service. Even if someone has an issue with your organization, if your customer service team can remedy it with exceptional service, they will more than likely become a repeat customer.”
“As a law firm, providing excellent service to our customers is our main goal but the most important goal is to make our customers come back to get our service,” says Jacob J. Sapochnick of Law Offices of Jacob J. Sapochnick. “That’s why we take good care of our customers to improve our customer retention rate to continue giving exceptional service to them. Eventually, these customers can recommend us to other people.”
Valerie Cox of TopSEOs.com agrees, “Building relationships with customers (ex. sending out birthday messages or promotions, including their names on marketing emails and messages, etc.) instead of offering a generic, cookie-cutter approach. Customers should feel like they are part of the family, and it’s essential to make them feel valued because they are key to a company’s success.”
For example, Taylor Lindores-Reeves of Digital Speed says, “Take them out for dinner if you can. Business relationships don’t always have to be transactional. Your client is a human, treat them like a friend and they will be your friend.”
“Regular communication is the most effective customer retention method I have used,” says Jason Harriman of Harriman Ventures. “It doesn’t matter what I say or the occasion, by simply checking in and being top of mind my customers know it is an open dialogue between us that they can utilize whenever and that I may do the same.”
Rachel Blakely-Gray of Patriot Software, LLC says, “Never underestimate the value of communicating with customers in a kind, helpful, and humble way. Whether it’s over the phone or via email, online review platforms, or social media pages, be consistent in the service you provide customers. Acknowledge inconveniences or mistakes, don’t leave a question unanswered, and remind your customer base how much you value them.”
Laura Hall adds, “An effective way to improve your retention rate is to simply ‘show up’ and become a helpful resource or partner that they are always pleased to hear from. Communication shouldn’t always be about selling or product updates. It can be a refreshing change for your clients to simply receive a call or email from you to say ‘hello’ or check in to find out how business is, what they are currently looking for, and if there may be any exciting developments on the horizon.
If you are adding value to them in some way, for example, providing a solution to a problem they have or by offering insights and industry data that could help move their business forward, you will become a trusted source and someone that remains top of mind and most importantly, someone they want to do business with.”
Noman Nalkhande of WP Adventure agrees, “Communicating with your customers on a regular basis is one of the most effective ways to retain them. The communication channel could be anything that the business is comfortable with. Think about these times when customers are going through a rough patch. It’s a great time to simply pick up the phone and call your existing or past customers to check in on them (without having any inclination to do business). Simply asking them about their well-being during tough times like these, will make a positive impact on their relationship with you and it won’t go unnoticed.
Another way is to send emails updating your customers about what’s brewing in your business. Perhaps, your business is going to diversify and you’re looking for feedback; or maybe the team is working on a new range of products and you want to clue your customers in. Whatever it may be, communicating regularly with your customers – on a professional or personal level, will make them feel valued, heard, and improve your overall customer retention rate.”
Anthony Money of Qualified Online Traffic recommends, “Never let the customer go more than two weeks without hearing from you. You need good and constant communication with them to answer any questions and so they know and feel like you’re taking care of them.
Something as simple as a quick update of the past 2 weeks and what has been done and what’s next to come with a Q&A for customer feedback.”
“Putting your customer at the center of your flywheel,” says Shiran Sugerman of Spitfire Inbound. “Everything you do, every interaction you have from the salesperson to the delivery team should offer the same experience to your customers.”
Julio Viskovich of NexLevel Sales adds, “Value your customers/clients. Cards to say thanks, thank you presents for onboarding new customers as well as limits to your most faithful clients can say a lot. In any event, something so basic as acknowledgment via web-based networking media for your most faithful clients can be significant.”
“Being proactive with the clients,” says Filip Silobod of Land and Aerial Surveys Ireland. “Showing that you care about their business more than you do about yours goes a long way. Of course, that takes more time and energy, but you profit in the long run, as the customer retention rate increases.”
Christina Strickland of Crackerjack Marketing adds, “Consumers often take to social media to air their complaints. Many times, they may not reach out to you directly or @mention you in their post so you may never see it. If you don’t already have a system set up, subscribe to a service such as Brand Mention or Brand 24 that aggregates mentions of your brand or product and review these daily, or several times a day, depending on the volume of conversation around your brand. This will give you an opportunity to respond to those grievances quickly. Not only can you save a customer but you’ll get the added benefit of that customer’s friends and followers seeing how great your customer service is.”
For example, Jay Purohit of Acquire says, “It is necessary to be proactive towards the management of customers’ requirements.
One may start by leveraging all the data collected from customers to first understand their needs and wants.
As I work for a SaaS firm, here is an example to improve online customer retention.
If by analyzing the data you figured out that your customers are constantly getting stuck at a certain part on the web page, either you can generate triggers to help them work with that issue or utilize the technical advantage of Cobrowse support to personalize the customer experience.
This will go a long way to incorporate the image of the brand that customers don’t get stuck and are helped when in need.
As a SaaS firm, there has to be a different approach as it involves more of digital experience, hence, this is how one can leverage automation of triggers and support via cobrowse to enhance the experience that the customers stay and become the brand’s service ambassadors.”
Polly Vodenicharova of Ricemedia adds, “Stay connected and proactive. Don’t just expect that customers and clients will remember you indefinitely, even if you provided the greatest product/service. We all like to feel appreciated and to receive personal attention, so making sure you regularly connect with your clients through email, email campaigns, courtesy call or by sending them some useful advice or observation (depending on your industry), one can really improve retention rates. A customer or client, which feels valued won’t have the need (and time) to look elsewhere.”
For example, Nadine Nocero-Tye of SyncShow says, “At SyncShow we focus on regular touchpoints, monthly and quarterly, to meet with our clients and discuss their digital marketing plans for success. We’re open and transparent about how we’re reaching their goals and what needs to be done to pivot if necessary. 90-days out from a contract end, we ensure we’re proactively discussing the next steps for their campaign to ensure seamless retention for their next year’s marketing efforts. If we’re showing value and supporting their goals, retention is a no-brainer.”
“Customer service, customer service, customer service,” says Ashley Sterling of The Loop Marketing. “The moment the client feels you don’t have their best interest at heart, you run the risk of losing them to a competitor. By being a rock-star customer service-centric business, you will have the ability to morph your services into customizable options that fit and work on a client-by-client basis. This will increase the chances of them sticking around as the primary foundation was established on trust.”
Daisy Jing of Banish adds, “Immediate assistance and attention are vital to have a good customer relationship. It shows them how important their account is and they pay loyalty back in return – meaning longer customer retention. Proper assistance with respect and empathy are needed to assure our customers that we are listening and want to give them the best service possible. It is important for us to provide both good products/service in both GOOD & BAD times.
Aside from that, loyalty points help a lot. From staying within the brand to trying/buying more to earn points and getting obsessed to know more. We make sure that we have a cult, not just customers.”
For example, Rizwan Girach of Chessgammon says, “As an online traditional board games company we tend to find that one of the most effective ways in which we can improve the retention rates of our customers is by providing them excellent service. When we talk about service we don’t only mean responding to queries and issues as quickly as possible but also offering a quick and optimized delivery service and an excellent product that is worthwhile for what the buyer has paid.”
Editor’s Note: Use this free HelpScout Customer Support Dashboard to track responsiveness, handling times, and customer happiness scores.
“Customer retention is about making sure the expectations set by marketing meet or exceed the experience delivered by production,” says Chris Clegg of PortMA. “80% of the time, your issues with retention can be fixed by resetting expectations through better marketing communication.”
“Retaining customers is all about providing value,” says Samantha Kohn of AutoVerify. “Make sure that the product or service you offer provides measurable value, and communicate with your clients regularly about their ROI. If the clients know without a doubt that your product or service is providing a positive, measurable return on investment they’ll have no reason to go anywhere.”
Nick Hollinger of Visitor Queue adds, “To improve your customer retention rate, ensure you have resources available to support and encourage them to get their account set up to the fullest. This could be any combination of sales reps available to demo them, pre-recorded demos, onboarding checklists, resource library, written guides, etc. The more features and settings they customize, the more likely they are going to stay with your solution.”
“Perform a customer roundtable,” says Tyler Burch of BoardActive says. “This works for new customers and for your long-time customers to draw out insights on what they like about your product/service. It also helps them teach each other about how to get the most out of what you offer. As they receive more value, the retention rate will also rise.
“Pick up the phone,” says Paul Bies of Mystique Brand Communications. “Obviously, we are in a digital economy, however, as marketers, we cannot ignore offline channels. To improve customer acquisition and retention we must prioritize both calling our customers — and picking up the phone when they call.”
Thiago Neres of Vendasta adds, “Talking to your customers is a very effective way to improve retention rate. It shows that you value their opinion and are willing to act on the feedback provided. People want to feel heard, and this is also a great opportunity to identify friction points and address them before your churn rate increases”
“Even as a digital marketing company, we believe that screens will not replace handshakes and practice this in several ways,” says Sara Bandurian of Los Angeles Website Design. “When onboarding a new client, we send them a box full of our company’s swag, complete with a thank you card to welcome them into our family. While we’ve had to conduct client meetings virtually due to the pandemic, we usually meet with our clients in-person. We also make a point to remember clients’ birthdays.
Companies that give that personal touch to their clients stand out among others. This effective method not only retains customers, but you will more likely receive referrals as well.”
“Transparency – from communication, reporting, team visibility to billing and your own agency goals,” says Emily Pederson of Leighton Interactive. “When you are transparent with nothing to hide, the barrier is down between client and agency. All conversations, regardless of topic are easier to have, decisions are clearer to make and there is a more pure partnership that will spur mutual success.”
Robert Donnell of P5 Marketing, Inc. adds, “Agencies need to do the hard work of documenting the work we do for our clients. Then make that work VISIBLE to clients. We need to take credit for all the work we do and not hide our efforts.”
“There are a few different angles you can assess customer retention rate from, but one metric that will help you learn how well your sales and marketing campaigns are working is your revenue growth from existing customers,” says David Adler of The Travel Secret. “Taking a look at how your relationship with existing customers is growing and improving can help you figure out how to be more economical with your marketing and scale your business because it’s more cost-effective to upsell then sign on a new client.”
“I recommend regularly surveying your whole customer base,” says Nikola Roza of Nikola Roza- SEO for the Poor and Determined. “Surveys are great because they will show you what the common problems are, so you can fix them proactively and before churn happens.
And when you run the survey and get the results, you need to focus on the fatty middle i.e., don’t look at the result’s edges where one person said this, and another that.
Instead look for patterns and common problems that get mentioned over and over.
Then fix those and you have prevented churn for the most part.
You will always have some churn and it’s inevitable. But by fixing the most obvious problems you prevent your customers from taking their business to your competitors.”
Tony Amante Schepers of Canto Solutions adds, “Know which measurements to follow, and which ones to ditch. NPS, Customer Churn Rate, Customer Retention Rate, CES, CSAT, NES, etc etc. There are many metrics out there. And many organizations don’t know which one to use. Best to focus retention efforts by following the correct metrics.”
“In order to improve retention, we measure customer sentiment early and often with NPS surveys as well as simple satisfaction surveys,” says Jennifer Lux of LyntonWeb. “We set the expectation that we’ll provide 5-star service and ask our clients to tell us if we ever fall below that level of service. We position our team members as strategic partners from day one and work collaboratively with our clients to solve their business challenges. Retention is easy when you provide value.”
Dylan Max of Netomi adds, “Measure your Net Promoter Score (NPS) often. A dip in NPS can often indicate early warning signs of customer churn. You can significantly improve customer retention rate by allocating resources to strategically address low NPS raters. By monitoring NPS frequently, you can nip any potential problems in the bud.”
“Leverage the feedback you get from your customers by collecting it and assigning a cost/benefit score,” says Stephane Gringer of Chameleon Collective. “Start with your high-benefit, low-cost items, naturally. Maintain this backlog and discuss it on a frequent basis with the team, put a plan into place, invest some time and money, make some changes to the customer’s experience, then move on to the next item.”
Adam von Reyn of Parlor.io adds, ”Improve your retention rate by treating your customers’ feedback as an invaluable source of input into your product roadmap. Let your customers know that you received their feedback, update them as related product priorities are added to the roadmap, and then let them know when the related feature has been released. Even though you can’t build everything your customers ask for, a transparent feedback management process will show your customers that their feedback is a big part of your product roadmap. Customers who believe that the things they need will be built, even if not immediately, will be far less likely to churn.”
Editor’s Note: Prioritize and log all of the customer feedback you receive using this free Jira dashboard template.
“You have covered every possible channel and collected customer feedback across every touchpoint, but now what,” says Supriya Agnihotri of SurveySensum. “When customers submit feedback, they expect you to ACT on it. And responding to it in a timely and effective manner, addressing their concerns or even praises is important to secure a positive customer experience.
Today there are a plethora of brands to choose from offering similar products at competitive pricing which makes it more challenging to retain customers and build brand loyalty.
By closing the feedback loop through a simple follow up or a meaningful action you encourage a positive experience that leaves the customer feeling valued. The stronger the positive experience, the better is the relationship with the customer and they stay life-long.”
“Most businesses don’t realize that customer retention begins at home (your company) by making sure your staff is working in the right environment,” says CJ Xia of Boster Biological Technology. “And building a relationship with them will only be a step ahead for them, but it will translate into their relationship with your customers. Once you’ve ticked that box, you can move forward on increasing retention. The strategies I find to be most rewarding is one, and it’s good to ask your customers for their opinion as it makes them feel cherished. Just make sure you implement them and give them the recognition for contributing to your company.
Providing a great experience doesn’t just start after someone buys your product. Instead, it starts when someone first hears of your brand and lands on your website all the way through using your product or services. These tactics can help you turn more buyers into repeat customers.
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