Churn hurts, and retention strategies are (part of) the answer.
If you make sure your customers are getting value & feeling heard, they'll stick around. Retention & expansion revenue will follow, along with higher lifetime values.
Here are 10 B2B customer retention strategies that we’ll cover:
- Have regular proactive customer touchpoints
- Build ‘sticky’ product features
- Build your customer community
- Incentivize annual commitments
- Reward and enable advocates with a referral scheme
- Leverage customer marketing
- Implement a customer success platform
- Track customer health scores
- Invest in customer education
- Use customer exit surveys to collect feedback
1. Have regular proactive customer touch points
The more interactions & touch points you have with your customers, the better your customer relationships will be. This will open up more feedback loops and improve retention.
Proactivity is key. Customers will always have issues, even if they’re not telling you. Make sure your feedback channels are accessible and that you’re reaching out to those you may not have heard from in a while.
Roi Kiouri, a CS team leader, achieved her goal of increasing GRR from 70% to 90%+ by focusing on the least engaged accounts (measured by product usage & performance). Here's how:
Less engaged accounts are more likely to churn. We looked into their performance metrics and product usage first. This helped us identify their weak spots - areas where we could jump in and offer consultation for maximum product value. Then, we formulated strategy proposals for each one based on our most successful use cases. We arranged calls with our accounts to discuss further, based on our clients' objectives. During the meetings, we made sure to point out relevant performance benchmarks we got from similar use cases. Luckily, all of them agreed to try them out for at least a month. In that month, we were closely monitoring performance and made adjustments when required. The result was a 91% GRR at the end of the quarter!
By proactively taking time to listen to their customers, Roi’s team were able to re-engage quiet accounts by responding directly to their pain points & offering solutions.
Here are some other methods for increasing touch points your customers:
- Easily accessible live chats
- NPS & CSAT surveys
- Loyalty programs
- Product update emails/notifications
- Online communities
- Group customer webinars
And if a customer does leave, you can still use touch points to learn from their experience to prevent future churn. For example, exit surveys.
Most growing B2B SaaS companies are choosing to hire a dedicated Customer Success Manager (or team) to manage these interactions.
2. Build ‘sticky’ product features
Sticky product features encourage repeat usage, so that customers become more reliant on your product or brand and more likely to renew subscriptions.
The stickier your product, the more easily you’ll retain and gain customers. When customers are reliant on your product, you’ll be able to make the most out of upsell and cross-sell opportunities, boosting their CLV. This can also lead to referrals, as customers realize the value in growing the user base
Ryan Prior, Head of Marketing at Modash, gives a great example of how they introduced a ‘sticky’ solution to help solve a customer retention issue at Modash:
Modash started off as a tool for finding & analyzing influencers. The nature of that use case means that people can buy a subscription, find a bunch of influencers, then cancel. Then come back a few months later when they need more, then cancel again. And so on. To create a 'stickier' solution, Modash built an influencer content monitoring tool that helps marketers keep track of their ongoing campaigns. That gives customers a reason to stay subscribed, and keep coming back every week (even when they're not actively recruiting).
More ways to increase product stickiness
- Design features that can’t be easily imitated by competitors
- Collect customer feedback, and implement their suggestions
- Outpace the competition: continue shipping new features regularly (and communicate them)
- Increase engagement outside of your product, by offering training, access to networks, educational resources, etc.
3. Build your customer community
Your customers are your best salespeople. They’ll sell your product based on the value they receive. The more they’re talking about you, the more exposure your product will get.
Antonia Stefan, Head of Customer Success and Community Engagement at Hubbub, shares how customer communities are important for reducing churn and building trust:
Customer communities and the one-to-many approach are growing in popularity as businesses aim to better understand and support customers. This leads to better relationships, personalized experiences, increased customer loyalty and satisfaction. By providing access to a community, businesses can reduce customer churn by up to 20%.
Examples of how to build your customer community
- Create public feedback channels and get your team to join in the conversation
- Give ambassadors opportunities to speak with your product team
- Create channels for customers to network with and learn from one another
- Leverage social media to create an interactive online following
Think about how you can support your customers through milestones, and even how they can support one another. Empower them with the mechanisms and channels to sustain and grow the community.
Zapier: a community-building case study
Zapier Community is an online community hub for customers of Zapier: a workflow automation product.
Through their online community, they provide their customers with tons of added value. Here are some of the benefits Zapier Community members receive:
- Chat functions that enable customer-customer conversations
- Educational content, self-help guides and FAQs to empower the customer to find solutions to any issues they’re facing
- Methods of reaching the Zapier support team easily when further help is needed
- Customer-centric features, e.g. self-paced learning opportunities
- Networking opportunities
- A badge rewards scheme, incentivizing customers to offer one another support and engage with the community
- Spotlighting of personal stories
All of these benefits help Zapier with their customer retention. Customers feel part of a valued and valuable network. They build connections and learning that can’t be translated elsewhere, ensuring their commitment to the product and brand.
4. Incentivize annual commitments
By encouraging annual commitments, you’ll automatically lower your churn rate and boost CLV.
Incentives, such as discounts, loyalty schemes and exposure to networks, will encourage customers to make bigger commitments to using your product. And the best news? This gives you longer to build your relationship with that customer and inspire their loyalty.
How to pitch an annual contract
There are two key ways to pitch an annual contract: as a benefit to the customer and/or as an investment in your relationship.
Pitching the benefit
There needs to be a meaningful benefit for the customer. This could be a discount, access to a premium add-on, the unlocking of new features, etc. Show the customer that the annual contract is your way of offering the best possible price.
Pitching the relationship
Customers love to feel supported and valued. Demonstrate how their commitment to you will mean you’ll work harder for them.
When to pitch
The good news is it’s never too late, or too early.
I might have a customer who’s stuck around for almost a year. Before they head into their second year, I could offer them a better price by switching from a monthly to an annual plan. Alternatively, I might have a customer who’s coming up to the end of their trial period and seems keen to renew for a second month. Capitalize on their interest and pitch the annual plan.
5. Reward and enable advocates with a referral scheme
Advocacy is word-of-mouth marketing that relies on your customers selling your product to their networks. Referral schemes incentivize advocacy, encouraging more customers to promote your product and amplify your reach.
Referral schemes often have financial incentives. For example, an advocate could receive a voucher, discount or in-product credit, once their referral has made it past the onboarding stage.
The cloud service Vultr uses in-product credit to incentivize referrals. For every new referral a customer makes, they can earn up to $100 to spend in their account.
But, incentives don’t have to be financial. Shane Ketterman, CS Manager, reminds us of that:
Past happiness with your product does not guarantee customers will renew. Rewarding advocates is a huge boost in the trusted partnership. Rewards can come in many ways. One of the ways I have rewarded advocates is to have them come speak at an event you are sponsoring. Customers remember future value, not past transactions.
He also believes that referral schemes should help advocates increase the future value of their business:
Referral programs are also big. Think outside the box and reward with something that adds to the future value of their business, helping them be the hero of their story. For example, they might get to be on an advisory board, to speak at an event, or to take part in a beta program and lend their expertise.
Common non-financial incentives include brand exposure, development of expertise and closer partnership with your company.
This means giving a platform to your customer’s brand. An easy way to achieve this is by putting your customer stories at the center of your product narrative, such as by spotlighting them or highlighting their work.
Customers are more likely to share content that boosts their personal or professional brand. As well as marketing your product, market your advocates using your product and get them sharing this with their networks.
Development of expertise
Some customers will be motivated by the opportunity to learn more from your company and networks. Give access to premium networks, introduce them to the product team, and plug them into other learning experiences.
People love to feel part of an inner circle. Invite advocates to lend their skills and expertise to product developments, as keynote speakers, or as board members. This will give you a fresh customer perspective and encourage them to feel more invested in your company.
6. Leverage customer marketing
Customer marketing seeks to retain existing customers, rather than attract new ones. It’s all about boosting those touchpoints. You want to inspire loyalty and excitement, encouraging customers to renew subscriptions or buy further into your product.
Customer marketing should feel personal and relevant to your customers. It goes hand-in-hand with customer analytics - you need to have a good understanding of who your customers are, their pain points, goals and what motivates them.
From there, you can segment your audience and automate content that is both meaningful and relevant. For example, Modash sends a fortnightly email to existing customers, sharing what's new in the product. This creates a feeling that things are evolving quickly, and the team is implementing customer feedback.
Gautam Bawa, Customer Success Manager at Optimizely, shares how customer marketing can help you leverage social proof:
In my experience, in any industry social proof and references are extremely valuable and the customer success world is no different. Customer marketing is a tactical tool that CSMs can leverage to drive higher product adoption and retention. It’s a platform for collaboration via user groups, case studies, webinars that create a shared experience and encourage customers to learn from each other.
Your existing customers are a great source of content, or ‘social proof’. Repurpose content shared through your comments sections and networks by customers. This will ensure your content is relevant and meaningful to your audience.
‘Quick win’ content ideas to share with your customers
- Updates on product developments and new releases - get your customers feeling excited about your product
- Customer shout-outs and spotlights - help your customers feel valued
- Lessons and learnings from your customer networks - empower customers to learn from one another
- New client announcements - demonstrate to your customers that they are part of a growing community
- FAQs taken from customer feedback and comments section - ensure customers feel listened to
7. Implement a customer success platform
A customer success platform will help you identify customers at risk of churn, expansion opportunities and create strategies for CSMs to act on this.
To ensure customer retention, you need to make sure your product is aligned and relevant to your customer needs. You’ll need to adapt beyond your original scope to keep up with requirements of the market.
This means having complete knowledge of your customers - their businesses, motivations, pain points - to stay ahead of the curve. A customer success platform will help track when engagement is declining so that you can continue adding value.
8. Track customer health scores
Customer health scores will help you track if your customers are happy and healthy, or at risk of churn. From there, you can decide where to focus your retention strategies.
What you track will depend on what’s of value to your company. It could be the number of upgrades and renewals, site traffic, product usage, customer feedback, etc.
Giving each of your customers a health score will plot them on a scale from least to most engaged. This will help you distribute your retention strategies, so you’re not just focussing on the customers who shout the loudest.
Reach out to these customers asap to find out how you can prevent churn. Identify trends that may be making your customers disengage, so that you can mitigate that risk in the future.
These customers could go either way - you have the potential to make them into ‘flourishing’ customers. Or, they could slip into the ‘unhealthy’ pool if left unnoticed.
Keep your communication channels open - tell them about new releases, ask for feedback, launch a marketing campaign. Focus on strengthening their relationship with your company and get them excited about engaging.
These customers can become your advocates. They’re already sold on your product - encourage them to upgrade and refer their friends. Help them feel valued for their loyalty by offering exclusive discounts, asking for their expertise, spotlighting their work, etc.
Matt Kelso, a Director of Customer Success, explains why it’s important to track health score metrics that help you understand the relationships you have with your customers, and what value they are looking for in your product:
I think the best health scores look at both the breadth and depth of the relationship with the account. When looking at breadth, usage metrics of key features or functionality that you believe are value-drivers are obvious targets. The depth component of health scoring is one that is often overlooked, as it can be trickier to quantify. Your goal is to understand how closely you are connected to the true economic buyer at the account. The decision-maker might not be your power user(s) or even your champion, but understanding the value they expect from your product is critical.
You should always seek to understand what your customer health metrics mean for your customers. For example, a customer’s health score might be high, but what if that’s because they’re not reporting issues? Use other retention strategies, such as customer touch points and community feedback, to add context to your health scores.
9. Invest in customer education
Customer education means providing the tools and resources customers need to be proficient in using your product. Give your customers access to a knowledge base for self-paced learning.
Customer education shouldn’t end after onboarding. It should optimize product use throughout the customer journey. The easier your product is to use, the better your customer satisfaction and retention scores will be.
Examples of customer education:
- Product webinars
- Video tutorials
- Case studies
- Interactive product walkthroughs
- In-product tips and guides
5 steps for developing a customer education program:
1. Talk to your existing customers
You want to understand two things:
- Their pain points - the problems they’re facing with your product
- Their motivations - what they’d value seeing from your product
2. Look at existing resources
Try to determine where you could develop them, in response to your customers’ pain points and motivations.
3.Segment your customers and create user personas
You could do this by customer characteristics, or their place in the customer journey, e.g. onboarding > setting up > product learning > refining skills > building expertise > advocacy.
4. Design education resources
Make sure they meet your customers’ needs and can keep pace with product changes.
5. Continue to gather feedback from your customers
Track product usage & engagement with your resources, to ensure they continue to be relevant and useful.
Digital adoption software like Userpilot use customer education to create a personalized in-product experience. Userpilot’s in-app resource center helps companies customize self-help resources, including checklists, tooltips, help documents, tutorial videos and workflows.
Top tip! Use your customer base to help create some of your education resources. If you have a thriving customer community and reliable advocates, ask them to share their experiences and lessons through a blog, comments feed or customer spotlights.
10. Use customer exit surveys to collect feedback
Customer exit surveys are crucial for innovation. Understanding why your customers are leaving is key for preventing future churn.
Remember, a churned customer may still have positive feedback about your product - you want to capture that too.
Some things exit surveys can tell you:
- They’re moving to a competitor,
- They can’t afford your product anymore,
- Your product marketing is misleading,
- They no longer have a use-case for your product,
- Your lead contact has left their company,
- There are issues with the software,
- You’re not responding to support requests quickly enough.
The data you collect will tell you different things - it may be that you can re-engage your customer, through discounted rates or fixing a software issue you weren’t aware of. It may be out of your hands, but you can learn from it to prevent future churn.
5 tips for building a customer exit survey
- Know which questions are the most useful for your team - think about what they tell you about your product, team, customer service, competitors, etc.
- Keep your survey as short as possible - people are more likely to respond to a survey that looks manageable. Aim for 10 questions and try to keep them all on one page.
- Give a mixture of compulsory and optional questions. This will ensure you get responses to a core set of questions - everything else is a bonus!
- Give a mixture of question types, e.g. rankings, ratings, long-form answers, short-form answers, multiple choice, etc. This will give you different data sets to analyze.
- Make sure you’re getting qualitative and quantitative data. For example, a qualitative open question like “How could our product work better for you?” will help give context to a quantitative satisfaction rating.
Once you’ve collected your feedback, remember to close the loop. Be transparent about feedback and what your actions will be as a result. This will demonstrate to customers that you’re serious about listening to their needs - even after they’ve left.
Make customers happy, and the revenue will follow
Customer retention isn’t just about making more money and achieving company KPIs. It’s about creating value for your customers, meeting their needs, responding to their motivations and tackling their pain points.
Run through this short checklist to see if there's a retention strategy you might not be using yet:
Customer-centric retention strategies checklist
- I have regular customer touch points and open feedback channels.
- I base decision-making on customer feedback.
- I close the feedback loop and share how I’m responding to feedback with my customers.
- I incentivize advocacy.
- I invest time into building a community for my customers.
- I include customers in content creation, by asking them to share their experiences and/or spotlighting their work.
- I track customer health scores to better understand how they’re engaging with my company.
- I invest in customer education.
- I use customer exit surveys to collect and respond to feedback.