How to Improve Customer Retention

Philip Cleave
February 12, 2024
Exploring four ways to improve customer retention

Behind every flourishing business, there are always happy customers. These loyal customers can contribute greatly to an organisation’s long-term revenue and growth simply through the positive word-of-mouth referrals they provide.

While perfecting a loyal customer base in today’s uncertain economic climate is no simple feat, customer experience professionals are unwavering in their commitment to improving retention. Yet, this isn’t so surprising when you consider that loyal customers typically spend 67% more than new ones and the cost of acquiring a new customer is significantly more than retaining one.

Here’s four solid ways to boost your customer retention rate.

1. Improve customer engagement

Consider for a moment your own relationship with the companies you need to deal with, whether that’s suppliers or people you regularly like to purchase goods or services from. It’s likely that you’ll be thinking more about those you have a regular dialogue with, rather than those that you don’t.

Similarly, it’s important to keep your own customers fully informed about any new products, promotions or changes. After all, if you regularly communicate with them, they’re more likely to have your company top of mind, feel valued and develop stronger brand loyalty as a result.

Yet, you’ll still want to know exactly what they’re thinking, whether that’s good or bad. In addition, by actively seeking their opinions, suggestions and experiences with your products and services, it will demonstrate how much you value their input, and provide crucial insights into their needs and preferences. And the best way to achieve that is through a customer survey.

Listening and responding to customer feedback, helps demonstrate your commitment to ongoing improvement, helping to improve customer satisfaction and build a stronger customer rapport. Furthermore, by encouraging customers to shape your offerings, it helps nurture a sense of ownership in your brand and foster long-lasting relationships.

2. Get a measure of your customer experience

Customers who find your brand easy, satisfying and enjoyable to interact with are more likely to stay with you. So, it’s vital that you’re able to measure this, so you know if you’re delivering a strong customer experience or need to improve.

Fortunately, there are some customer experience (CX) metrics that can help you with this. Here are the key ones you should know about.


The Net Promoter Score® (NPS) is a key metric that can be used to gauge the strength of your relationship with your customers, by measuring their loyalty and willingness to recommend you to others.

NPS can be measured by asking your customers the following question:

‘On a scale of 0 – 10, how likely would you be to recommend our company to a friend or a colleague? (on the basis that 0 represents not likely and 10 very likely)

The higher your NPS score the more desirable it will be.

NPS is a crucial metric, as there’s a high correlation between an organisation’s NPS score and its revenue. Subsequently, any increases in NPS can signal more growth and profitability ahead, while providing year-on-year benchmarks and industry comparisons with competitors.

With regards to the customer journey, NPS can be used to gauge how customers feel at key milestone points such as after onboarding or before a membership renewal. In addition, NPS can also be useful to use after direct customer interactions, including customer service calls, complaint resolutions and any other service-related initiatives.

For more information about NPS, including ways to calculate it, you may like to visit our Net Promoter Score page.

Customer satisfaction score (CSAT)

The customer satisfaction score is another key metric that CX professionals can use.

While NPS offers an effective way to measure a customer’s overall opinion of your organisation, CSAT, can be a more effective way of gauging their satisfaction with a specific product or service.

You can work out your CSAT, by asking your customers to answer the following question.

‘How satisfied were you with our (product, service, support interaction)?

Each customer is then invited to rate their satisfaction on a 5-point scale ranging from the lowest rating, which is very dissatisfied to the highest rating, which is very satisfied.

You can then calculate your CSAT by dividing all the positive responses you’ve received by your total number of responses and then multiplying this figure by 100, to leave you with a CSAT percentage.

Those scores that are closest to 100% demonstrate the highest levels of satisfaction, while those at the other end of the scale the lowest levels of satisfaction.

For a quicker and more convenient way of working out your score you might like to try our CSAT calculator.

Customer effort score (CES)

The final CX metric that you should know about is the customer effort score. This metric asks the customer to rate the amount of effort it required for them to complete an interaction with you. This metric question could cover a range of different contexts from how easily their support issue was handled to how simple it was to find or buy something from your website.

So, if you wanted to measure how much effort they had to expend to get their support issued resolved with your organisation, you might ask them the following CES question.

‘On a scale of 1 – 5, how easy or difficult was it to get your support issue resolved through us? (where 1 represents very easy and 5 very difficult).

Following this, you can calculate CES by dividing the sum of all individual customer effort scores by the number of customers providing those responses. This should leave you with a score between 1 and 5 – where the lower the score, the more desirable it is.

Again, if you’re looking for a faster and more convenient way of calculating your CES, you might like to try our CES calculator.

3. Respond swiftly to customer needs

Customers who feel listened to and can see that their feedback has resulted in concrete actions or improvements, are more likely to perceive your company as genuinely committed to their satisfaction. Consequently, when you respond quickly to a customer need it helps build their trust, improves their overall customer experience and increases your likelihood of retaining that customer.

The timelier your response the better, as it demonstrates to your customers that their concerns, preferences and suggestions have been taken seriously and are more likely to be translated into actionable steps. And the statistics back this up, with nearly half of all customers expecting companies to respond to them within four hours.

4. Always remember to say 'thank you'

A common courtesy which is often overlooked by many teams, not just CX ones, is to always thank customers. Saying ‘thank you’ goes a long way in customers’ minds, and can be integrated into a number of points along the customer journey including:

  • Following the purchase of a product or service
  • A few days after the use of a service or delivery of a product
  • The anniversary of a product purchase
  • Towards the end of a subscription

Whether it’s through a tailored loyalty programme or a personalised note, expressing gratitude is a simple, but effective approach to keep customers returning. It builds a sense of appreciation and acknowledgement that helps strengthen the bond between your brand and your customers.

By helping reinforce positive feelings about their interactions with your company, while enhancing their overall customer experience, such an approach leads to higher customer satisfaction and increased customer retention rates.

Hold on to more customers that you already have

We hope you enjoyed reading this blog.

The key thing to take away from all this is that by enhancing your customer engagement, tracking your key performance metrics, and swiftly addressing any requirements your customers may have, you can strengthen your relationships with them. In addition, it will also help to foster greater trust and loyalty, which helps you to keep more of the customers you already have.

Create more of the experiences your customers love

While improving your customer engagement, tracking of key performance metrics and ability to resolve customer issues will help increase your customer retention rates, delivering more experiences your customers love will generate even better results. However, you’ll need to right survey tools to help you achieve that.

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Get started and create your first survey

If you would like more information then please get in touch.