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10 Strategies & Tools You Can Use to Improve Your Customer Retention & Churn Rate

Raja Antony
Written by Raja Antony
Published at Aug 25, 2023
10 Strategies & Tools You Can Use to Improve Your Customer Retention & Churn Rate

In this era of cutthroat competition, getting customers to stick around is tough work.

The good news is that brands that get it right reap immense benefits.

According to a recent survey, boosting customer retention just by 5% increases profits by 25-95%. It also turns out that the cost of acquiring a new customer is typically 6 to 7x higher than retaining an existing one. This makes it super important for any business to deploy strategies for retaining existing customers.

Figuring out what really makes customers stay with your brand can be tricky. And even if you know, finding the right solution for reducing customer churn can be challenging.

In this article, we'll share ten practical strategies and tools you can use to improve your customer retention and churn rate.

Let's jump in and make keeping customers happy a whole lot easier.

 

Table of Contents

Quick Read

  • Analyze your customer needs and preferences and calculate customer lifetime value to determine where to focus your customer retention efforts.
  • Some effective customer retention strategies include segmentation, engaging onboarding, personalizing content, educating, ethical branding and tailored experiences.
  • Leverage customer retention tools like Visme, HubSpot, Typeform, Mailchimp, Intercom and Yotpo to boost customer retention efforts.
  • Use Visme's customizable templates to create content to implement these customer retention strategies quickly.
  • These templates include whitepapers, social media graphics, newsletters, explainer videos, webinar presentations and product videos.
  • Sign up for a free account in Visme and create content to engage, educate and retain your customers.

 

Analyzing Customer Needs & Preferences

The journey to improving customer retention starts with understanding your customer's unique needs and preferences.

The more you know about your customers, the easier it will be to tailor your offerings and improve their experience with your brand.

Here's how you can approach analyzing your customers' needs and preferences:

Develop a Buyer Persona

Creating and understanding your buyer persona is the first and crucial step in understanding your customers personally. Who are they? What challenges do they face? What are their aspirations and behaviors?

Collecting information about their demographics, psychographics and purchase history can help you engage with them in a targeted manner.

Visme's buyer persona templates are the best way to capture all the information about your customers and visualize them in a visually appealing manner. Here’s an example template that you can use to capture your customer’s motivations, goals, frustrations and more.

Software Developer Customer Persona
Customize this template and make it your own! Edit and Download

If you are a B2B company, in addition to creating a buyer persona, create an ideal customer profile to learn more about them. The ICP represents your most valuable customer who resonates deeply with your solution. It's not just demographics; it's the essence of their challenges, goals and behaviors.

Here's an infographic that you can use to understand the difference between these two and create your own.

Buyer Persona Vs Ideal Customer Profile Infographic
Customize this template and make it your own! Edit and Download

Map Your Customer Journey

Break down your customers' journey from awareness to purchase and examine each stage. Examine how customers interact with you, where they lose interest and which barriers prevent them from reaching their goals.

This helps you determine the important points in the journey and the problems that frustrate customers.

Use Visme's customer journey map templates to draw out this journey and clearly understand what's happening at every step.

Digital Brand Customer Journey Map
Customize this template and make it your own! Edit and Download

 

Implementing Surveys and Feedback Loops

Actively engaging with your customers using surveys and feedback loops allows them to express their opinions freely. This demonstrates your commitment to their satisfaction while providing you with insights for making improvements.

Moreover, this is a direct method to gauge customer needs and preferences. You’ll be able to understand them on a deeper level and tailor your offerings.

With Visme, you can create interactive surveys and quizzes for your customers and collect valuable information to improve your products, services and customer retention practices.

To take it a step further, Visme offers a unique, no-code solution for collecting feedback.

With Visme Forms, you can create forms offering human-like interactions that collect crucial information and create a positive association with your brand.

This can massively aid in customer retention by making feedback collection an engaging and memorable experience for your customers.

Additionally, you can read our case study about how we tested these forms on over 700K organic visitors, which resulted in up to a 207% increase in conversions and a 205% increase in form engagement.

 

Calculating Customer Lifetime Value (CLV)

Customer lifetime value (CLV) refers to the total revenue you predict to receive from a single customer over the entire duration they stay as your customer.

Calculating the CLV may seem complex, but it's a crucial metric to help you decide about your customer retention, acquisition and marketing spending.

So, let's understand how to calculate CLV in the most simple way possible:

1. Gather Data

Firstly, you'll need to collect these pieces of information:

  • Average Purchase Value (APV): What is the average amount a customer spends each time they make a purchase? Divide your company’s total revenue by the number of total purchases in a given period (usually a year).
  • Average Purchase Frequency (APF): How often does your customer make a purchase (like once a month, once a quarter, etc.)? Divide the number of purchases by the number of unique customers who purchased during that period.
  • Customer Lifespan (CL): How long a customer usually stay with your brand as a customer (weeks, months or years)?

Here are some ways you can collect this data:

  • Sales Data: Extract purchase amounts and frequency from your sales dashboard or CRM.
  • Surveys: Use satisfaction surveys to understand customer behavior and preferences.
  • Customer Relationship Management Tool: Tap into your CRM for comprehensive customer information and purchase history.
  • POS System: For brick-and-mortar businesses, POS systems offer transactional insights.
  • E-commerce Analytics: Online businesses can utilize e-commerce analytics platforms to analyze purchase purchase patterns.

2. Calculate CLV

Multiply the Average Purchase Value (APV) by the Average Purchase Frequency (APF) to get the average revenue generated by a customer per unit of time (day, month, year, etc.).

Then, multiply this by the Customer Lifespan (CL). So, the formula would be:

CLV = APV x APF x CL

For example, let's say your Average Purchase Value is $50, your Average Purchase Frequency is 2 times a month, and your average Customer Lifespan is 12 months. Your CLV would be:

CLV = $50 x 2 x 12 = $1200

 

10 Effective Customer Retention Strategies

Here are ten of our favorite customer retention strategies that will help you retain your customers and keep them coming back for more. Go through them carefully and figure out how you can implement them in your business.

1. Segment Your Customers

While understanding your customers’ needs and preferences, you must have collected a lot of data about them. Use that data to divide your customers into smaller groups based on shared characteristics such as age, profession, interests, hobbies and more.

This helps you cater to their unique requirements and preferences, leading to more customized and relevant experiences.

Here’s an example of customer segmentation by demographic information (date of birth) from the popular apparel brand H&M. They provide 25% off to their customers on their birthdays.

10 Strategies & Tools You Can Use to Improve Your Customer Retention & Churn Rate

2. Create an Engaging Onboarding Experience

An onboarding experience makes new customers comfortable with your products and services. To provide an exceptional customer onboarding experience, tailor it to their specific needs, guide them through product usage and address their queries promptly.

For example, if you are a travel company, you can offer a custom itinerary for your new customers. You can also send them a welcome email with tips on planning their trip and what to do when they arrive.

By creating an engaging onboarding experience for your customers, you can ensure they are happy with your products and services right from the start.

Use Visme’s onboarding checklists to plan the onboarding process and ensure you don’t miss any important steps in between.

Marketing Agency Client Onboarding Checklist
Customize this template and make it your own! Edit and Download

3. Provide Personalized and Interactive Content

Delivering content tailored to your customer's interests and preferences engages them on a deeper level. Personalized recommendations, targeted advertisements and interactive content strengthen your audience's connection.

To retain customers with personalized, interactive content, gather and use data about their interests, motivations and pain points. Then, deliver custom content that engages, educates and encourages interaction with your brand.

For example, at Visme, we understand the challenges non-designers face at the different stages of creating eye-catching designs. Therefore, we tailor our blog posts, ebooks, YouTube videos and other content to help them at every step of their journey.

4. Educate Your Customers

Empowering customers with knowledge about your products and services and related industry topics positions your company as a thought leader, inspiring confidence and trust. Utilize straightforward explanations, tutorials and other educational materials to ensure they extract maximum value from your offerings.

Educated customers often translate to more successful users and increased brand loyalty.

For example, we provide a presentation certification course to teach users the fundamentals of designing and delivering presentations. As a result, they use Visme's presentation software more successfully and create memorable presentations on their own.

To help our users through multiple channels, we provide educational content via blog posts, webinars, YouTube videos and Visme's support page.

5. Communicate Regularly

Keeping customers informed with regular updates allows your company to stay top-of-mind. Share news, promotions, product updates, or industry insights through various channels, including newsletters, social media and blogs. This consistent conversation and information sharing helps nurture lasting customer relationships.

Use Visme’s wide range of templates, including newsletters, social media graphics and infographics, to create impactful communication materials and keep your customers informed and engaged.

6. Provide Superior Customer Service

Excellent customer service is vital in attending to customer requests and issues swiftly and effectively. Quick, respectful, and understanding resolutions can turn negative experiences into positive ones, strengthening customers' loyalty.

Implement solid internal processes and support channels to ensure your team addresses customer concerns promptly and thoroughly.

Use this customer service training course template to train your employees for excellent customer service.

Customize this template and make it your own! Edit and Download

7. Create an Ethical Brand

Modern consumers are looking for socially conscious brands. In fact, more than a one-third of total consumers are willing to pay more for sustainable products.

They want to know that their products are sourced from companies that care about their environment, employees and customers.

If you can show your customers that your brand has a solid ethical foundation, they will be more likely to become loyal customers and recommend your company to others.

The famous shoemaking company TOMS is one of the best examples of an ethical brand. They donate a pair of shoes for every one they sell, and one-third of their profit goes to non-profit organizations.

Read our comprehensive guide to ethical branding and learn how to make your brand ethical.

8. Provide Personalized Customer Experience

According to a recent survey, 80% of consumers are more likely to purchase from brands that personalize their experience.

Use your customer data to customize interactions that align with each customer's requirements and preferences.

This involves delivering tailored content, recommendations and communication that specifically cater to the customer's interests, previous behavior and purchasing patterns.

For example, Grammarly uses its customer data to deliver weekly reports about the users' writing performance. This helps the users understand how their writing has improved and how valuable the Grammarly application is.

In this article, we've shared the best customer success software to help you provide personalized support, anticipate client needs and build long-term, profitable relationships.

9. Give them Social Proof

Social proof is a powerful strategy for convincing existing and potential customers of your product or service's value. It involves showcasing positive reviews, testimonials, case studies and customer endorsements to demonstrate your commitment to service quality.

It can be as simple as displaying a compilation of positive reviews on your website, sharing customer success stories, or highlighting the logos of renowned businesses you've worked with.

For example, Visme has a dedicated blog section for case studies. Here we share valuable insights on how our advanced tools and templates help users solve their problems.

Here's an example case study where a brand saves 79% in design cost and time with Visme.

Visme provides professionally designed case study templates that you can use to easily create eye-catching and thoughtful case studies for your customers.

Customize this template and make it your own! Edit and Download

Additionally, to enhance your social proof approach, you can share video testimonials with your audience to humanize your brand and connect on a more personal level.

Video testimonials are an excellent way to show that your products or services work, as well as provide valuable insights on how they can be used in real-life situations.

Here's a video testimonial template from Visme that you can use right away or explore a variety of other video testimonial templates from Visme.

Customize this template and make it your own!Edit and Download

10. Cultivate a Customer-centric Company Culture

Creating a culture that prioritizes your customers' needs ensures that every decision and process in your company revolves around them, prioritizing their needs and expectations.

By instilling this customer culture within your organization, you empower your team to understand the importance of delivering customer service and experiences.

Provide regular training sessions and discussions about your customer experiences and improve your team's understanding of the customer needs. A company culture where employees understand and value their customers yields long-term loyalty and financial success.

 

6 Customer Retention Tools to Use

Now, let’s explore some of the most popular tools to help you implement customer retention strategies.

1. HubSpot CRM

HubSpot CRM is an all-in-one marketing, sales and service platform that helps manage customer relationships and track interactions. Key features include lead scoring, email management, and a unified customer dashboard.

It enables personalized communication, nurturing leads and monitoring customer satisfaction, facilitating improved customer retention.

2. Intercom

Intercom is a live chat and messaging platform that provides personalized support and onboarding assistance. Its features include automated messaging, targeted engagement and customer segmentation.

By offering timely, customized communication, Intercom enhances the customer experience and boosts retention rates.

3. Mailchimp

Mailchimp is an email marketing and automation tool that help you stay connected with your customers. With features like audience segmentation, tailored email campaigns and analytics, Mailchimp helps deliver targeted customer messages.

4. Typeform

Typeform is an interactive form and survey builder that offers a conversational and user-friendly experience to improve customer engagement. It helps you gather valuable customer feedback and insights while maintaining a strong connection with your audience.

As we’ve already discussed, getting customer feedback and addressing their concerns enhances retention and fosters long-term relationships.

5. Yotpo

Yotpo is a user-generated content platform focusing on customer reviews and testimonials. By collecting and showcasing customer feedback, Yotpo builds trust, encourages repeat business, and improves customer relationships, leading to higher retention rates.

6. Visme

Visme is an all-in-one design and data visualization tool, beneficial for creating impressive marketing collateral and sales materials to engage your customers. With Visme's drag-and-drop editor, you can easily design professional presentations, infographics, social media graphics, reports and more.

With Visme's brand design tool, you can create and save your branding assets like brand fonts, brand colors and company logo. These assets will be saved under your “My Brand” areas in Visme to apply to every document in just one click.

You can also use Visme to create a wide variety of content to nurture customer relationships, such as case studies, newsletters, testimonials and many others.

Additionally, advanced tools like interactivity, team collaboration, social media scheduler and many others make the content creation and distribution process a breeze.

Improve customer retention by creating visually appealing content that resonates with the audience. And the best part is that Visme seamlessly integrates with all the popular customer retention tools like HubSpot, Mailchimp and Typeform.

Furthermore, Visme Forms helps generate quality leads by providing customizable, conversation-like interactions that increase engagement and conversions. You can attract the right leads through these interactive forms by offering a unique and enjoyable user experience.

This makes Visme an extremely powerful tool for any business looking to improve customer retention.

Visme's incredible capabilities have caught the attention of industry professionals, including Anne McCarthy, the Senior Director of Learning Experience at EmployBridge. According to her insights:

“It’s easy to create something in Visme quickly that looks like we sent it out to an advertising firm to design.”

“My whole team has been using Visme for several years, but now seeing the kind of work we’re producing, our marketing team wanted to start using Visme.”

“If it’s something we need to turn around really quickly, we’re jumping into Visme. We either put together a one-page piece that’s easy to absorb, or we’ve started creating little animated pieces.”

 

7 Customer Retention Templates from Visme

Visme offers a selection of useful templates that can help you create compelling, customer-centric content that retains your audience's interest.

Each of these templates from Visme is fully customizable and can be tailored to fit your brand's style and messaging, enhancing your customer retention efforts.

1. Whitepaper Templates

Customize this template and make it your own! Edit and Download

Whitepapers provide a deep dive into a complex topic, offering valuable insights that can help your customers make informed decisions. Also, producing regular whitepapers on complex topics establishes you as an industry thought leader.

Customize this whitepaper template or find a variety of other whitepaper templates in Visme’s library.

And with Visme's AI writer, crafting these informative documents becomes even more effortless. The advanced writing capabilities of this tool allow you to generate, edit and proofread texts and save time and effort in the process.

2. Social Media Graphic Templates

Engaging and visually appealing social media content contributes immensely to brand personality and customer loyalty. Use Visme social media graphic templates such as Facebook posts, Instagram posts, Twitter posts and many more.

These templates help you save time and ensure consistent branding, leading to stronger customer connections.

Travel Facebook Ad
Customize this template and make it your own! Edit and Download

With Visme's AI image generator, you can craft unique, high-quality graphics for your social media posts. Using this advanced tool, you can create images, illustrations, paintings, abstracts and more.

Just describe what you want to generate and watch the magic happen within seconds.

3. Newsletter Templates

Regular newsletters are a great way to keep your customers informed about the latest company news, product updates or special offers.

Use Visme's newsletter templates to maintain a consistent message style and format, making them easily identifiable for your audience. This frequent communication with your customers will help you retain them for a long time.

Creative Newsletter
Customize this template and make it your own! Edit and Download

4. Explainer Video Templates

Videos that explain your product's features, benefits, or how-tos can help customers understand its value and how to use it best.

With an explainer video template, creating a concise and compelling video is easier and can significantly boost customer engagement and retention.

Customize this template and make it your own!Edit and Download

5. Webinar Presentation Templates

Host webinars to provide in-depth knowledge, engage with your audience and address their queries in real-time. Use Visme's webinar presentation templates to communicate effectively with your audience. This can help you build trust and credibility, ensuring that your message resonates with them.

Customize this template and make it your own! Edit and Download

At Visme, we host regular webinars with industry experts. Here’s a Visme webinar featuring our Content Marketing Manager, Victoria Taylor and Amir Cohen from Monday.com.

6. Product Video Templates

Utilize Visme's product video templates to showcase your product's functions, unique features and benefits. Such videos can help customers get the most out of your product and significantly contribute to customer retention.

Customize this template and make it your own!Edit and Download

7. Ebook Templates

Ebooks offer an in-depth exploration of a topic, providing value to the reader while positioning your brand as an expert. Create professional-looking ebooks with Visme's ebook templates to share valuable information with your audience.

Customize this template and make it your own! Edit and Download

 

Tracking Retention Rate and Customer Churn

Once you implement the strategies and use the tools and templates, you'll need to track your customer retention and churn rate to determine how effective they are.

So, here's how to do that:

1. Calculate Retention Rate

To calculate the retention rate, decide on the time frame you want to calculate the rate for and identify the following:

  • Number of Customers at the Start of the Period
  • Number of Customers Acquired During that Period
  • Number of Customers at the End of the Period

Retention Rate = ((Number of Customers at the End of a Period - New Customers Acquired During the Period) / Number of Customers at the Start of the Period) x 100

For example, let's say your business had 500 customers at the beginning of the year, and during that year, you acquired 100 new customers. At the end of the year, you still had 550 customers, including the new ones. To calculate the retention rate:

Retention Rate = ((550 - 100) / 500) x 100 = 90%

This means your retention rate for the year is 90%, indicating that you retained 90% of your existing customers.

2. Measure Customer Churn Rate

The churn rate represents the percentage of customers who have stopped using your product or service over a given period. And it’s exactly the inverse of your customer retention rate.

For example, if your customer retention rate is 90%, then your churn rate is 10%. However, if you want to calculate your customer churn rate without the customer retention rate, here’s the easiest formula to do so:

Churn Rate = (Number of Customers Lost During a Period / Number of Customers at the Start of the Period) x 100

For example, suppose your business had 800 customers at the beginning of the year. During the same year, 50 customers decided to stop using your services. So the churn rate is:

Churn Rate = (50 / 800) x 100 = 6.25%

This means that 6.25% of your customers stopped using your services during that year.

 

How to Continue to Build Strong Customer Relationships

Building strong customer relationships is the foundation of any business. It can help you gain more customers and retain the ones that already exist. To build strong customer relationships:

  • Be Responsive: Respond promptly to customer inquiries and address their concerns. An attentive approach will show customers you value their time and are committed to assisting.
  • Listen and Act on Feedback: Encourage customer feedback, and demonstrate how their input improves your products and services. This will build trust and strengthen the belief that their opinions matter.
  • Reward Loyalty: Implement a customer loyalty program offering rewards, discounts, or exclusive offers to returning customers to show your appreciation and incentivize future business.
  • Walk the Extra Mile: Consistently exceed customer expectations. Delight them with surprise upgrades, bonus gifts or extra services to leave a lasting impression and drive brand loyalty.
  • Stay Active on Social Media: Engage with your customers on social media platforms. Provide value by sharing helpful content and promptly addressing customer inquiries or feedback.
  • Be Transparent: Openness fosters trust – take responsibility when things go wrong, share your company values and let customers feel connected to your brand.
  • Keep Innovating: Continually update your products and services based on customer feedback, industry trends and emerging needs.

 

Customer Retention Case Studies

The strategies we shared will succeed when you use them right for your specific audience, business and industry. What matters most is being creative and trying various tactics that fit your business.

So, here are some of the most successful companies with excellent retention strategies that you can learn from.

1. Starbucks

Starbucks has mastered the art of customer retention through its successful "Starbucks Rewards" loyalty program and mobile technology to enhance the customer experience. Members earn Stars for every dollar spent, which they can redeem later for free drinks, pastries, merchandise and more.

What sets Starbucks apart is its emphasis on the customer experience, both in-store and digitally. Customers can easily pre-order, pay and collect orders using their mobile app. Starbucks has created a unique and tailored experience that keeps its customers loyal to the brand.

2. Amazon

Amazon's customer retention strategy revolves around personalization and value-added services like Amazon Prime. By analyzing customer shopping habits, it offers personalized product recommendations, which encourage repeat purchases.

Amazon Prime adds another layer of value through its bundle of perks, including free shipping, early access to deals and streaming services.

All these features create an ecosystem catering to a wide range of customer needs, delivering unparalleled convenience and satisfaction. This extensive focus on customer needs and behavior sets Amazon apart from competitors.

3. Apple

Apple's customer retention strategy is built upon its impressive ecosystem of high-quality products, seamless user experience and exceptional customer support. This ecosystem encourages customers to adopt multiple Apple devices and remain loyal to the brand.

Apple stores, with their Genius Bars, act as hubs for solving customer issues efficiently and providing personalized support. Moreover, Apple's consistent innovation and improvements based on customer needs and preferences set them apart from competitors and contribute to their high retention rates.

 

Retain More Customers & Leads with Visme

Feeling inspired? Remember that improving customer retention requires dedication and time, but the results are valuable. Applying the strategies and tools we've covered will allow you to retain your customers and expand your business.

All you need is to get creative and try different approaches to see what works best for you.

And throughout the journey, you'll need to create a lot of content to educate, entertain and engage your audience.

That's where Visme comes in. With our drag-and-drop editor, you can easily create whitepapers, presentations, social media images and more to help you retain customers and leads.

Sign-up for Visme and start creating content that resonates with your audience.

Raja Antony
Written by Raja Antony

Raja Antony Mandal is a content writer at Visme with 5+ years of experience in the B2B SaaS space. With a background in English Literature, he is passionate about using storytelling techniques to inform and engage readers. Raja writes about visual content creation, design tips and marketing strategies, and his specialty is making complex topics easy to understand.

He also knows the fundamentals of on-page and off-page SEO, which helps him rank his articles high in search engine results. In his free time, he enjoys playing guitar and tabla. You can connect with Raja on LinkedIn.

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