What is Customer retention?
A customer who feels heard will feel like they’re in a loving relationship with a partner that not just hears them but listens to them. The emotional impact that listening creates results in loyalty. And loyalty improves customer retention.
If you’re not providing a superb customer experience by listening, your customers will leave you in a heartbeat and go with your competitor.
86% of customers are willing to pay more for another provider if they receive a better customer experience.
Customer retention refers to how skilled a company or product is at retaining its customers over a specified period. High customer retention is synonymous with repeat business. It involves lots of listening and infusing the feedback into your product. By doing this, you will continuously set the bar high and blow your competition out of the water.
It costs five times more to acquire a new customer than to retain an existing one. Customer retention is just as critical, if not more so than customer acquisition. What determines your success isn't the new business you can generate; the real victory lies in how good you are at retaining your existing clients.
Why customer retention matters?
“ 65 % of a company’s business comes from existing customers. “
Your returning customers are your most significant and most frequent spenders. They also become your biggest promoters down the road, as they refer friends and family, thereby sending more business through your virtual doors.
“ Businesses miss out on $1.6 trillion in revenue from losing customers to a competitor. “
That is why organizations invest millions, sometimes even billions, every year into customer retention programs with the primary intent of boosting customer satisfaction, loyalty and encouraging their customers to spend more.
While there is a certain appeal and excitement that comes with landing new clients, customer retention should be where you are concentrating your efforts.
How to calculate customer retention
Customer retention rate is a measure of the number of customers that a company continues to do business with over a given period. Customer retention rate is expressed as a percentage of a company's existing customers that maintain loyalty to the business in that timeframe. It is the inverse of the churn rate. The churn rate is calculated by subtracting your customer retention rate from 100%.
Keeping track of retention metrics is critical for any business today. Especially one that wants to quantify the efficacy of its marketing strategy and customer service program. Ultimately, using surveys to increase customer retention can make an immediate impact on your customer lifetime value and your company's desired outcome.
Top 5 Surveys You Can Create To Improve
Your Customer Retention Rate
We now know what customer retention is, why it matters and how to calculate it, let's look at the 5 best surveys you can use and when to send them to boost customer retention.
1. Customer Onboarding Survey
So, you just got off a call and landed a new client called John. A little while later, you teach John how to use your product and answer all his questions.
The onboarding went so well! Or did it? Two months later, John churns, and you're left wondering why. That’s a dangerous position to be in because it might happen again with another customer. And that’s not what we want.
If you had sent John this Customer Onboarding survey, you would have discovered if he had a problem that needed solving. And you would have been able to help him attain his desired outcome with your product.
What is customer onboarding?
Customer onboarding is the process through which new users are provided and acquire the necessary knowledge and skills to become up and running and effective users of a website, app, or software service. It can be automated or performed manually.
How to improve customer retention using an Onboarding Survey
1. Ask the right questions
With the Customer Onboarding Feedback survey, you can minimize churn by asking these questions:
What made customers buy your product?
How would you rate the onboarding session?
What part of the onboarding process was most helpful?
What part of the onboarding process was least beneficial?
Onboarding saves your customers the headache of trying to figure out a new tool all on their own. This way, not only do you shorten your customers' learning curve but help them understand how your product can help them achieve their goals.
Survicate's onboarding survey is one of our many effective customer retention surveys because it lowers the risk of churning. Using this survey allows you to collect customer feedback on the onboarding process quickly. Then you can use that insight to better your onboarding process. Ensuring you make a good impression from the very start will drastically improve a customers’ experience and set you apart from your competition immediately.
2. When to send an onboarding feedback survey
When it comes to when to send an onboarding survey, there is no right or wrong answer. If you send it early on, you'll gain valuable insights right off the bat. However, sending it later in the process can result in more accurate responses, as the customer will feel more at ease providing candid feedback. What matters is that you send one. Multi-phased surveys sent after a month and three months are a great way to ensure you cover all bases.
2. Customer Satisfaction (CSAT) Survey
Customer dissatisfaction is like an invisible thundercloud looming over your relationship with your customers. It grows darker and more ominous when the customer feels like their feedback is falling on deaf ears. Then suddenly, lightning strikes in the form of customer churn. Using a Customer Satisfaction Survey (CSAT) will help you tackle customer dissatisfaction before the customer decides to leave by helping you recognize where your clients are unhappy in their customer journey.
What is customer satisfaction?
Customer satisfaction is a measure of how products and services provided by a business meet or exceed customer expectations.
“ 96% of customers say customer service is important in their choice of loyalty to a brand. “
For more about Customer Satisfaction in-depth: 8 Quick Tips on How to Improve Customer Satisfaction
How to improve customer retention using a CSAT survey
To make sure you increase customer satisfaction and maximize customer retention at every stage of a customer’s journey using CSAT surveys, adopt these two strategies:
1. Keep in touch
Don't just keep in touch when you're asking for money. Contacting customers only after they make a purchase is known as a transactional relationship. And this often causes you to rank low on customer satisfaction.
Keep in touch periodically. You have got the customers' data, send them personalized emails thanking them for their loyalty, and as a cherry on top, reward them for the loyalty. Encouraging your customer service team to keep in touch with clientele is an excellent way to nurture your relationship with them and eventually develop a loyalty program to keep your customers delighted.
The good news is that Survicate's CSAT surveys provide you with vital insights from your clients that will aid in ensuring your customer service team stays on top of their game and deliver the best customer service bar none!
You should not survey too often, but just enough. Surveying your customers every 3 to 6 months is enough to give your team time to act on and implement the relevant changes gleaned from the insights collected by the survey.
3. Net Promoter Score Survey (NPS)
The net promoter survey consists of two questions. The first question asks the customer, as mentioned above, to rate how likely they are to recommend your goods or services. The second question is a follow-up question asking why they gave the specific score.
What is a Net Promoter score?
A Net promoter score is a measure of how likely a customer is to recommend your goods or services to a friend, relative, or colleague.
By using NPS surveys, you can track your customers' satisfaction with your brand or product. If you are unfamiliar with NPS surveys, this NPS comprehensive guide is an excellent place to start.
How to improve customer retention using an NPS surveys
1. Act on promoter, passive and detractor feedback
The customers that give you a rating of 9 and 10 are your promoters. And although they’re pleased with your product, they deserve to be appreciated for that.
Don’t rest on your laurels once you see 9s and 10s in the survey results. Go the extra mile and appreciate your most engaged customers. Appreciate them by offering loyalty programs and or discounts. For customers, the best way businesses can show their appreciation, according to 64% of respondents, is to offer sales or just lower prices in general. Reward loyalty, and your customers will reciprocate by rewarding you with more actionable insight and more loyalty. Retention is through the roof, your customers are happy. It’s a win-win
Showing gratitude where it's due is important but addressing negative feedback is equally important. It would be detrimental not to act on it. A few ways you can act on negative feedback are to sympathize with your customer, listen to understand where they’re coming from and not to simply respond. Secondly, as you respond, start off with an apology and explain the situation and assure the customer that you’re working on solving the problem. Lastly, respond quickly. Don’t shy away from responding. The feedback can be scathing, I know. But the quicker you are to respond, the more likely you are to placate the customer. Never let the tension build up. A quick response will usually diffuse it. You never want them to feel like they’re being ignored on top of them being unhappy.
Now the passives. Passives are the customers who give a rate of 7 or 8. Passives are neutral and the best approach when it comes to them is just to reach out to them. When you do, you can easily sway them to become promoters by asking them how you can earn their recommendation. I know right. So easy.
For more in-depth information on how to act on feedback, we have an article titled, “15 ways to act on feedback” just for you.
2. Send them at the perfect time and frequency
Deciding when to send an NPS contingent on the business model your business runs on. If you’re a subscription-based business or SaaS company, chances are that customers are interacting with your product regularly — if not on a daily basis.
So given the nature of a SaaS business model, the easier it is for your customers to churn each month if they’re unhappy with your product or service. So if you don’t have meaningful interactions with your customers via surveys, you run the risk of losing them because you cannot gauge how satisfied they are.
Fortunately, scheduling your NPS surveys for customers is a piece of cake with Survicate’s recurring NPS website surveys.
You can set the survey frequency to daily, weekly, monthly, or quarterly. That way, you’re able to track your customer’s satisfaction with your product or service.
After you’ve sent your first NPS survey, chances are you’ll want to send follow-up surveys in order to track changes in your NPS over time. Plan to send follow-up surveys on a regular basis. For instance, for an event like a product update. You need to know if the update is keeping your promoters happy and or addressing a detractor or passive’s dissatisfaction.
However, if you wish to send out your NPS survey via email using an ESP(Email Service Provider like intercom, you can easily set up the frequency of your NPS by automating them. Here’s how you can do just that.
NPS is a long-term measure of customer loyalty, so depending on your industry, sending out an NPS at the right time is crucial. The reason being is you want to make sure you better or maintain the experience you would’ve been delivering.
The right frequency depends on multiple factors. Here are a few things to consider when choosing the frequency at which you want to send out NPS surveys.
Quarterly NPS surveys are best suited for companies that have an established customer base and stable customer relationships, like a subscription service.
Annual NPS are often well-suited for companies with a periodic transaction frequency, such as banks, insurance companies, and high-end retailers.
More frequent NPS’ can be implemented by companies that have less predictable customer interactions or operate in incredibly competitive industries.
4. Customer Effort Score (CES) survey
A recent study conducted by Capterra revealed that 74% of field service companies counted functionality or ease of use as a top priority for choosing new software.
I prefer an iPhone because it’s intuitive and more user-friendly than an Android. Chances are you’ve heard this statement before. Maybe even found yourself in one of these heated, never-ending Apple vs. Android debates.
This shows you how much people are willing to ditch a brand in favor of another simply because of ease of use.
But when you click through some sites or software, some aren’t as straightforward as we’d like them to be.
Great support is also about making life easy for your customers. An effortless experience is guaranteed to mitigate churn. Sending out a Customer Effort Score Survey can help you identify your customers’ pain points and fine-tune the customer’s overall experience.
What is a Customer Effort Score (CES)?
Customer Effort Score is a metric used to gauge the amount of effort a customer had to put in to use a product or service, and find the information they needed to solve a problem. So, what is a good Customer Effort Score? There isn’t really an industry-standard but 5 points on a 7 point scale, for example, is considered good. As a general rule, the higher the CES score, the better.
How to improve customer retention using a CES survey
1. The types of questions you can include in your CES survey
The first question could be one of the following:
“ Did our [your company] Customer Success representative make it easy for you to handle your issue? (1 is strongly agree and 7 is strongly disagree) "
“ How easy was it to use our product? ”
“ Did you find the setup process easy? “
A CES survey can have just one question, but to get the most out of it, we recommend adding an open-ended follow-up question as the second question asking the customer what it is that they liked or disliked. Here are a couple of examples:
“ Do you mind telling us exactly what you liked? “
“ What did you dislike about the setup process? “
2. When to send Customer Effort Score survey
Because CES surveys ask customers to rate the amount of effort they put into solving a problem, sending surveys at regular intervals isn't practical.
Instead, send the survey after a customer service touchpoint, such as when a support case is resolved or after a service-related experience, such as reading a help center article, to determine whether it was helpful.
Another time to send out a CES survey is immediately after a transaction.
Although ease of use is sometimes subjective, it is worth deploying a CES survey to identify the most frequent customer complaints that you can fix. Ease of use is often overlooked but pays massive dividends in the long run.
5. Customer Churn reason survey
Not knowing why a customer churned is frustrating. And will cost you a lot down the line if it isn’t addressed because to prevent churn from happening again, you need to seek to understand the problem and nip it in the bud.
The simplest way to understand why a customer would have churned is to send them a survey that asks them why. It sounds deceptively simple, but it does work. A customer churn survey is one such survey you can send to ask your customers.
How to improve retention using a Customer Churn reason survey
Unfortunately, when you send out this survey, it can only mean one thing. The customer is unhappy and has already churned. But this isn’t a complete loss. Instead, it presents a unique opportunity for you to ask them why so you can prevent it from happening again.
For example, if a customer leaves feedback pointing out that you don’t have a feature they need, respond quickly by thanking them, and go on to notify your product team of the newly acquired feedback. Once you do that, your product team can look into making the feature available as soon as possible. If you don’t, you run the risk of losing even more customers to the same cause.
Although you can only improve retention only after the customer has jumped ship, you should still send a Customer Churn reason survey. The perfect time to send a Customer Churn Survey is, you guessed it, after they churn. Preferably the sooner you can, the better.
Maximize on customer retention using Survicate surveys or Risk being Played out
Customer retention is the lifeblood of your business. Using surveys is a sure-fire way to skyrocket your retention. And last but not least, nurture your relationships with your customers.
The race is on! Businesses worldwide are now vying for the only commodity that truly matters – customer feedback! Customer retention using surveys is not hype. It can help your business boost retention and reduce churn.
Reducing churn begins with listening intently to your customers. And by using an NPS, Customer churn, Customer Satisfaction (CSAT), Customer Effort Score, and Customer Onboarding, you will become a good listener.