Customer Retention Management

Customer retention is the goal, but in order to achieve said goal a sound customer retention management system is key. Understanding how to retain customers is vital to building a successful business. The truth is there is no one shoe fits all but there are many universal truths. 

This is our comprehensive guide to customer retention. It’s packed full of expert tips, great ideas and the latest data and real-world examples. Use it to understand customer retention from base principles and shape a winning customer retention strategy.

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What is customer retention management?

Customer retention management is the process of managing the customer experience and customer satisfaction efforts within your organization. The ultimate goal of customer retention management is to keep the customers you acquire for as long as possible. Customer retention management is an ongoing process that is steered by customer retention strategy.

The 4 elements of customer retention management

There are 4 key elements of customer retention management. These are:

Customer acquisition

It might seem odd to have customer acquisition as a part of the customer retention management process. But it’s critical to have it here at the start. By customer acquisition we mean winning new customers. Any organization’s customer retention efforts must begin by trying to win the right customers, in the right way. 

Targeting and onboarding the wrong customers is a frighteningly easy mistake to make. It’s a question of expectations. If the customer clearly isn’t suited to your product, or won’t get any benefit from the service you’ve sold them, it will be an uphill battle to keep them. And one that could quickly make your efforts unprofitable – sending your customer acquisition and support costs skyrocketing.

Customer retention

Customer acquisition is the catalyst for sales revenue but so many businesses stop there and fail to actively try and retain the customers they win. Customer retention is a broad topic with many facets that we cover extensively in our Customer Retention Guide. It can be summed up as “the efforts an organization makes to retain customers in a sustainable way”.

Not all customers will necessarily be profitable for a business, and it’s important to focus on customers that can (and should) be grown. By the same token, you should be able to leverage data about your customers to pick off any that should be removed! Indeed, Gartner has predicted that 75% of organizations be doing just that by 2025 – and all because they know enough about their customers to make the right call.

It’s also the case that satisfied customers who’ve bought from you in the long term are generally happier to provide references and act to refer you on to their colleagues.

Customer lifecycle management

Customer lifecycle management (CLM) requires you to examine the different touchpoints you have with your customers, even those that happen before a potential customer. This is an extension of the customer journey mapping and mystery shopping exercises that are best practice for all customer experience programs. 

The principle behind CLM is to work out how to raise those experiences well above the industry standard. This is an important part of customer retention management, as it broadens the program beyond just stopping customers leaving. In effect, you are creating a complete ecosystem which they actively want to join, and stay a part of.

Customer development and growth

Customer development is focused around how you can grow the amount your existing customers are spending with you. Key account marketing, cross-selling and upsell marketing activities all fall into this category.

Customer development and growth is another form of ‘customer excellence’; the approach that focuses attention on making your customers more successful at what they want to achieve. One only has to look at the rise in ‘Customer Success Manager’ job titles at leading enterprises to see the effect of this. Once again, this taps into a perpetually recurring theme in customer retention: the concept of understanding, meeting and potentially exceeding customer expectations.

Importance of customer retention management

The importance of customer retention management is highly significant in growing your business. It also underlines the importance of using customer feedback to understand customer preferences and expectations, and act accordingly.

Customer Thermometer is used by organizations around the world to underpin customer retention management. Try it for yourself through our free trial. It takes seconds to register and get started on your journey to powerful customer insights.

Set Up Your Customer Satisfaction Survey Create a free Customer Thermometer account (No credit card required – Fully functional account). Set up a CSAT survey and discover why over 10,000 teams choose Customer Thermometer to track, measure and improve their customer retention program.