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Understanding Customer Retention

How do you grow a business? Do you just sponsor Facebook posts? Offer discounts on various occasions? Create killer ads and commercials? These solutions aren’t bad or wrong by any means. But they’re designed to mostly attain new customers. And while it’s important to grow your customer base, you shouldn’t forget already existing ones. That’s where customer retention comes in.

To better understand what this process is all about and how important it is, we turned to our Head of Customer Retention – Guoda Stavarienė.


So, what is customer retention?

Sometimes customer retention is seen in a narrow sense – when you work mainly with expiring or already expired customers and try to win them back. However, people usually leave brands for two reasons. It’s either when they are unsatisfied with a brand or they do not have a need for it or its services anymore. And then, unfortunately, it could be too late. It’s much more complicated and costly to recover such customers.

Here at Tesonet, on the other hand, see customer retention as building a relationship with a customer in order to retain him or her with our brand for as long as possible. While working with existing customers, we have plenty of time to create good customer experience. It’s easier to show attention to them, understand their needs and satisfy them, so they would be willing to stay together with our brand. So in a nutshell, for us, it’s a consistent and patient work with a customer during all one’s journey with our brand – from onboarding to expiration.


Is it somehow different from customer loyalty?

We see customer loyalty and customer retention as synonyms, just used in different sectors, by different companies, but for similar purposes. In both cases, you’re trying to engage customers with a brand, creating strategies and actions to make them spend more and stay longer with a brand. And, also, to recommend the brand to their friends.


How do you measure customer retention?

The main metric used to measure customer retention is simply a percentage of customers willing and staying with a brand after their subscription expires. Or what part of customers recur for a new period. Complementary measures could be customer satisfaction or brand recommendation when we are trying to understand how the customer feels and how strong he or she is engaged with our brand.


What does a day of customer retention specialists look like?

Customer retention specialists have several very important areas in which they work on a daily basis. First, they spend time analysing, researching and trying to understand different customers. They look into their needs, what our typical brand users look like and what is important for them.

Then they are looking for different actions – from pleasant attention and “just because” gifts to special offers. These actions could potentially improve their experience with the brand and increase their retention at the end of the day. Later, they test these different actions and measure the results. Our purpose is to chose and to use only those actions which make the most significant impact on customer retention. When we already know what actions are the best, we scale them for all our existing customers and then measure overall customer retention.

We use different channels to reach and communicate with customers: emails, UCP (user control panel), push notifications. In order to prepare content for those different channels, our team works tightly with other colleagues, especially with copywriting and design teams. Also, colleagues from the Product department help us to implement all technical possibilities to reach our customers with different offers and messages. And Customer Success team is our partner when our communication fails (unfortunately, sometimes it happens) or something is unclear.


What are your tips for improving customer retention?

Just like in human life, you have to nurture every relation if you want it to continue to grow. So, if you want to grow customer retention, you have to find ways to strengthen brand’s relations with every customer. Only in business, you have to keep one more aspect in mind – you must count the effort and resources you’ve spent on customer engagement. And here you have to find a balance between the cost of your actions and their impact on customers behaviour. But in general, you can improve your customer retention in the same way you work on improving any other human relations. 🙂