Keeping your current customers happy is much cheaper than new customer acquisition (5 to 25 times less). But here’s the challenge: Many companies need help retaining existing customers because the pressure to get new ones often overshadows the importance of keeping the existing ones happy.
The struggle intensifies when businesses need to pay more attention to the impact of proper customer training. It’s not just about selling your product—it’s about ensuring customers know how to get the most out of it and solve their pain points. In this article, we’ll explore common issues that affect customer retention, the levers for improving customer retention, and how Customer Education software can help.
Defining customer retention
Customer retention refers to a business’s strategies and actions to keep existing customers engaged, ultimately encouraging them to continue using your products. Successful customer retention involves understanding and meeting customer needs, providing excellent customer service, and maintaining a positive overall customer experience.
To stay competitive, especially in the SaaS industry, organizations should avoid assuming that users will automatically understand their product after buying it. For lasting adoption and customer engagement, businesses need to give customers, employees, and partners the correct information on how to get the most value from the product.
Common issues that affect customer retention
Sustained customer retention requires a clear understanding of potential pitfalls that may arise during a product’s lifecycle. These challenges can undermine your efforts to keep customers engaged, from overlooking customer training to ignoring customer feedback.
Here are four common challenges that can affect customer retention:
- Poor customer service experiences: Customers want to feel supported and valued. Poor communication, unhelpful responses, or delayed resolutions can lead to dissatisfaction. Zendesk found that over 50% of consumers will switch to a competitor following just one negative experience.
- Inadequate user training: When customers don’t know how to make the most out of your product, they’re likely to disengage at some point. Without proper guidance on using your product, users might miss out on critical features or struggle with functionality. To increase customer satisfaction and long-term engagement, consider investing in customer training. 9 out of 10 companies have had a favorable outcome from their investments in educating their customers
- Untapped customer feedback: 73% of consumers worldwide expect companies to understand their unique needs. When customers share their thoughts about a product, it’s like having a roadmap to meet their needs. And if you keep ignoring this feedback, you’re leaving money on the table.
- Hidden fees or unpleasant surprises: Unexpected charges can quickly erode customer trust. Being transparent about your pricing structure and any additional costs can build customer loyalty. Customers are more likely to trust your business when there are no unpleasant surprises in fees.
Strategies for improving customer retention
Here are five retention tactics you can use to increase customer retention.
1. Offer accessible, multi-channel support
Providing on-demand resources, including online FAQ pages, live chat, and other services, lets your customers easily get help when needed. That said, even as technology and automation have become more prevalent, 90% of people would still rather interact with a human than a chatbot.
While self-service support is useful, customers must be able to talk to a real person when necessary. A dedicated customer success and relationship manager for each account can make all the difference in ensuring that a valued business partner is supported effectively.
2. Create opportunities for customer feedback
Whether in the form of emailed surveys, post-purchase feedback forms, or verbal conversations, direct customer insights can shed light on where your company is succeeding and where there is room for improvement.
To reduce customer churn, get feedback not just from current customers, but also from those who’ve left. One effective method for gathering this information is by using exit surveys. By asking targeted questions about customers’ reasons for leaving, companies can get insights into areas that need improvement, whether they’re product features, customer service, pricing, or other factors. You may discover patterns among churned customers when analyzing these survey responses.
3. Prioritize effective onboarding
One of the best ways to keep your customer base happy is to ensure they quickly find value in your product through a strong onboarding program. Customer onboarding refers to the training and educational activities that enable your customers to engage effectively with your product throughout their customer journey. This includes new customers just starting out and follow-up with existing users who may need training on new product features, integrations, or refresher material they can refer back to as needed.
As Lincoln Murphy, author of the book Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue, explains, “Proper onboarding isn’t done to prevent churn; it’s done to ensure the customer achieves their desired outcome. Retention comes from that.”
A strong customer onboarding program is based on each user’s specific needs and considers their level of knowledge. Beyond addressing these aspects, the onboarding content should convey your product’s value. This means explaining why they should find your product valuable and how it can simplify their tasks. Remember, the driving force behind your customer onboarding program must be delivering value to your customers.
Establish value for your customers early and often through engaging and efficient onboarding practices. As you can see in the below diagram, investing in a customer onboarding program early, and throughout the complete customer journey, can have an increasingly positive impact on your retention efforts.
It’s also important to remember that customers you onboard when the account signs on may not be the same users using your platform a year from that point. Employee dynamics within a company change as people shift to different teams or depart and new employees are hired, so onboarding should be available to all new hires at each of your customers.
4. Drive continuous value and engagement
It’s important to recognize that onboarding is not an initial, one-and-done, point-in-time exercise—it’s an ongoing process. After a customer understands the initial value of your product through onboarding, there are many opportunities to strengthen the customer relationship via ongoing customer training and education.
This may be providing product updates or information on major new features or releases, training new team members, offering refreshers, sharing best practices for using your product, or delivering resources for advanced topics, certifications, and other related products. Customers will return When they regularly find value in your product (and your training).
5. Adopt an expansion-centric long-term strategy
Just as your customers change and evolve, so too does your product. As you continue to prioritize retention, keep customers apprised of changes and unlock expansion opportunities.
Existing customers are more likely to try new products or buy additional services since they already trust your brand and understand the value of your product. You’ll increase loyalty and lifetime value if you properly engage these customers and help them succeed.
Long-term, loyal customers are an excellent resource for testing new features and products and giving feedback before they launch. Not only does your company receive helpful information from committed product experts, but your customers feel like their input is valued during product development.
Take Asana, for instance. The software company has implemented a scale-minded approach to training customers with Skilljar and identifies expansion with existing customer accounts with the help of Skilljar’s Salesforce integration.
Measuring customer retention
As you delve into the specifics of measuring retention (and churn), there are a number of indicators to consider – we refer to them as Business Impact metrics. Business Impact metrics help you measure the impact of your training program on customer retention, lead generation, and revenue. Below, we’ve broken down these measurements by retention drivers.
Several Business Impact metrics must be considered when determining how to measure your customer retention rate (and churn). These metrics help you measure the impact of your training program on customer retention and revenue, among other business drivers. Below, we’ve broken down these measurements by retention drivers.
Long-term customer success and retention often directly reflect a customer’s onboarding experience. You’ll want to pay close attention to the delta between the number of software licenses sold and the number of users taking training and logging on to the product.
Also, pay attention to the tasks you have outlined for users to derive value from your product in the first 90 days. If you’re not seeing users complete these tasks, that’s a red flag.
Continued engagement and expansion
Not only is training an excellent way to deliver continuous value to your customers, but engaged customers are also more likely to succeed with your product (and renew in the future). Consider these metrics to measure the ROI of ongoing education. They come in handy, especially when talking to people in the Customer Success and Sales teams.
How Skilljar can help with customer retention
Companies must pay more attention to properly training and educating their customers. Some know there’s a problem but might not know how to fix it. That’s where Skilljar can help.
Skilljar is a customer training platform that can help improve customer retention. Skilljar allows companies to create customized learning paths for their customers. Users can follow a personalized training program based on their skill levels. Plus, Skilljar incorporates interactive elements, including quizzes and assessments. This engagement makes learning more enjoyable and ensures that customers actively absorb and retain information.
Sign up for a Skilljar demo and see how our platform can enhance your customer retention strategy.
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