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Steps in the Customer Retention Process

GoCardless
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Last editedDec 20222 min read

While acquiring new customers is an important factor in company growth, customer retention is equally – if not more – important. Losing customers to the competition leads to high churn rates and reduced profits. We’ll break down the customer retention process in this guide, from analysis to maintenance. Together, these steps will help you enjoy greater stability and improved cash flow.

Step 1: Conduct a customer segmentation and analysis

Any process of customer retention must begin with understanding who your customers are. Conduct a customer segmentation analysis to group your customers by buying behaviour and demographic. Do certain demographics interact with your products and services in a similar way? Is there a step along the user journey where your customers are more likely to lose interest? Buyers are driven by different motivations, so you must look at the data to understand what they want. While some customers want hands-on customer service, others are more tempted by special offers and free shipping.

Step 2: Offer personalised customer service

Using the conclusions drawn from this analysis, you can then move on to the next stage of our customer retention process flow. This involves tailoring your services carefully based on customer behaviours, wants, and needs. Ask for feedback not only from your customers, but also your sales and marketing team to find new outreach methods. They will usually have valuable insights gleaned from working directly with customers. Where financially possible, customise each package or product according to this feedback.

Step 3: Make systems more convenient

Today’s shoppers expect more than high quality products. They also expect a frictionless user experience. If your systems aren’t up to date, it will work against you. The third step of the customer retention process is to update your systems. This not only includes your ecommerce platform and website, but also your accounts receivables, payment processors, and mobile apps. Platforms should integrate seamlessly with automated reminders sent out to customers to reduce churn.

GoCardless partners with over 300 integrations, including top accounting software like Xero and others. We can help streamline the payments process by taking payment directly from customer bank accounts, for a more convenient user experience. Our Success+ tool uses AI technology to automatically retry payments that fail the first time around, improving churn rates.

Step 4: Maintain strong relationships with customers

A common mistake that businesses make is focusing more on acquisition than retention. Just because you have a core customer base doesn’t mean you can stop engaging with them. It’s important to maintain these relationships on an individual level, with active selling practices. Follow up on purchases for feedback, run competitions, and engage frequently with customers on social media. Without new ideas, products, and special offers, customers could grow bored and jump ship to the competition.

Additional customer retention strategies

In addition to following the customer retention process flow above, here are a few strategies for success.

  • Allow customers to create accounts for repurchasing. Pre-filled forms create a faster, more convenient repeat shopping experience.

  • Enable 24-7 customer service using chatbots and virtual assistants to answer questions when you’re not available.

  • Engage with customers using social media and email to build and maintain those all-important relationships. Follow up after purchases by asking for feedback with a simple quiz.

  • Encourage customers to make their next purchase with special offers and discount codes. These gently nudge first-time customers to come back for more and interact with your brand.

It’s important to measure customer retention regularly. By following the steps of the process of customer retention, you’ll make sure that no client is left behind. All these little things add up to a memorable customer experience, in turn increasing retention rates.

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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