How are The Retention Strategies and Client Experience Related

By Thomas Bennett Financial expert at Priceva
Published on July 18, 2023
In this article, we explore the relationship between customer retention and customer experience (CX) and look at existing customer retention strategies.


Today, consumers have a myriad of choices when it comes to products and services. They've become extremely discerning in their selection. If products don't add value, entertain, enhance efficiency, unify, inform, inspire, or amaze, they're quickly replaced with something new.
Unsurprisingly, to remain competitive, companies strive to earn their customers' loyalty. They utilize data to better understand what their customers enjoy and how they prefer to interact with their products. We see this across various sectors, including finance, media, healthcare, and consumer goods.

Ellie Jarvis, Vice President of Product Management at Restaurant Brands International (Burger King), puts it this way: "We're a burger-making company. That's the product. It's not a website. But to remain relevant, we must do far more than just sell vast quantities of burgers. Now, more than ever, it's important for us to consider the experience people get from the Burger King brand – whether it's relevant and establishes a significant emotional connection with our customers."

The Stakes are High

What happens to companies that lag in delivering excellent customer experience (CX)? They lose customers. They have to pay more to attract new ones. They desperately spend to retain these customers, but they still leave. The companies then lose market share and fall even further behind. Meanwhile, internal motivation declines, the sense of achievement drops, and decision-making becomes more reactive. A negative self-reinforcing cycle sets in.

The Connection Between Retention Level and CX

The impressions a company creates for its customers, both good and bad, could be the most important factor determining the retention rate. Customer service quality dictates the customer experience during interactions with your company and product, influencing brand perception.

Understanding the overall quality of customer service, teams can identify what changes should be made at every customer touchpoint to improve CX and, consequently, increase retention.

According to Zendesk's 2023 customer service trends report, 74% of customers feel loyal to specific brands, and 57% of respondents said customer service quality impacts their brand loyalty. This implies that the experience you create for your users significantly influences whether they stick with you.

Qualtrics also found that customer service quality correlates with loyalty. Loyal customers are five times more likely to make a repeat purchase and seven times more likely to try a new product. This is a clear demonstration that good customer service quality breeds loyalty, and loyalty boosts customer retention.

Meanwhile, negative customer attitudes also influence retention, but in the opposite direction. In the same Zendesk study, 58% of customers stopped buying from a company after a poor experience, and 52% switched to a competitor's product or service. For B2B companies, the situation is even grimmer: 66% ceased doing business with a company after a poor experience.

The companies described below share a common characteristic: they managed their retention strategies and customer experience and numerically proved that as customer satisfaction with the product increased, engagement and retention rates also grew.

Approaches of Different Companies to Customer Retention

1. Offer a Convenient Online Experience

One of the simplest examples of customer retention is meeting their expectations. Today, customers expect online interactions to be as simple and straightforward as face-to-face communication. According to a Zendesk report, 65% of customers want to buy from companies that offer fast and easy online transactions. It's for this reason that 49% of customers rate Amazon the highest for service.

Let's see how this worked for Iflix - a leading entertainment service in Southeast Asia. They were tasked with increasing retention because only a small portion of users returned to the platform. Analyzing customer behavior data allowed Iflix to better understand which content resonated with users, based on their unique interests and behavior.
The service used this data to create seven different user onboarding processes instead of one general process for all. They began to offer personalized recommendations to boost the retention rate.

Iflix also improved customer service when they discovered that subscribing was a complicated barrier for new users. They began offering all videos for free during the first 24 hours of using the service. This led to an increase in video views, increased advertising revenue, and improved conversions. Swiftly getting users to the point where they recognize the value of your product is the first step toward long-term retention.

Consider: do your customers experience pain points when interacting online with your product? How can you simplify your customers' experience?

2. Make Every Customer Feel Like a VIP

Luxurious hotels like the Four Seasons are renowned for their high-end exclusive customer service. This hotel chain can provide a luxurious experience to every customer thanks to a combination of technology and impeccable service. Guests can use the Four Seasons chat to send messages to the staff via channels such as WhatsApp for any queries, including requests for restaurant recommendations and reservations, room service orders, early arrivals or departures, and even chartering private jets.

An illustrative example of this approach comes from the Woodland Resort. They allow guests to make special requests or wishes when booking a room online.

A guy named Dustin booked a room at The Woodlands Resort and jokingly added a special request: "Three red M&Ms on the bedside table. Not a pack, just three M&Ms. One for me, one for my girlfriend, and one to split in case we get hungry late at night. And a picture of bacon on the bed." He promptly forgot about his request.

Imagine his surprise when he arrived at the hotel to find three red M&Ms and a picture of bacon on the bed in his room.
Consider what would help you respond quickly and accurately to customer requests and how you can anticipate their expectations.

3. Build Relationships with Customers on Empathy

If there's one thing the pandemic has shown us, it's that empathy is key to building strong relationships with customers. In fact, 49% of customers want companies to show sensitivity.

A shining example of customer-centricity is the clothing and footwear brand Zappos. They base their customer policy on analyzing customer feedback. Optimal pricing, ease of model selection, fast free shipping, free shoe returns within a year – these are just a few of the opportunities provided to customers.
During the pandemic, Zappos launched a hotline where customers could call customer support or talk about anything, even the best Netflix shows.

Empathy involves:
  • Reading (recognizing or identifying) the emotional state of others;
  • Identifying this state with one's personal feelings and emotions;
  • Giving an emotional response to the received feelings and emotions, directed for the benefit of the person whose emotional state was read.

A Gallup study found that fast customer service at a bank increases the chance of customer satisfaction sixfold. But speed is not the main factor.

Service elements such as the courtesy of employees and their willingness to help increase the chances of engagement ninefold. Empathy has proven effective here too.

To better understand the needs of your customers, you can create an empathy map for the key avatars of your target audience.
A customer avatar, also known as a persona, is a detailed characterization of a typical representative of a product or brand's target audience. This avatar is used in persona methodology for a nuanced description of the target audience.

The persona method is a tool that enables detailed research of the target audience and precise segmentation. It amalgamates customers with similar preferences or reactions into a composite representation. A persona is not a specific individual - rather, it's a detailed image that represents a particular, significant segment of the target audience. The foundation of a persona lies in real data collected from various sources.

How is empathy manifested in your business? Is there an incentive for your employees to be sensitive to customers, or are they focused on adhering to rigid algorithms that don't allow for empathy or responsiveness?

4. Simplify Your Customer's Life

Researchers studied 75,000 users and found that the most important factor in achieving customer loyalty is minimizing their effort - essentially the work they must do to solve a problem.

Always think about how you can solve a customer's problem with minimal effort on their part. Customers expect brands to anticipate their needs and solve problems even before they arise. That's why proactive service is so critical for customer retention.

An excellent example of proactive service is the Dollar Shave Club.

This subscription-based club sends each member a box of shaving supplies through the mail. They're inexpensive but of satisfactory quality. When a member is almost out of supplies, a courier is already at the door with the next box. Customers don't need to keep track of their supply or spend time going to the store. As a result, the startup grew into a $1 billion business in just five years.

Currently, to preempt all potential questions, each visitor to the Dollar Shave Club's website is greeted by a chatbot that answers common questions before a customer needs to contact customer support or abandon their shopping cart.

What efforts are you helping to minimize for your customers, and how easily do they interpret your message?

5. Understand Your Customers To Meet Their Expectations

Microsoft created a new set of performance-enhancing features for the Microsoft MyAnalytics platform. They used data to optimize and simplify the user interface.

First, Microsoft identified distinct customer groups that interacted differently with MyAnalytics. They then studied the features that each group gravitated towards. Finally, they used these insights to promote corresponding feature sets for each individually developed customer profile or "persona". The result was a fourfold increase in user engagement and a significant boost in their retention rate.

Are you using the accumulated data about your customers' preferences to improve service and create a personalized user experience?


To improve customer retention, you need to thoroughly analyze your entire customer experience (CX). CX encompasses everything that customers think and feel when they interact with your brand.

The way a company engages with its customers, how promptly it responds to customer service requests, and how it communicates its values - all these factors influence a customer's relationship with the brand.

Earning a customer's trust requires time and effort. If your business doesn't meet customers' expectations, you risk losing them before you even have a chance to rectify the situation.

Provide excellent service and simplify your customers' lives, and they're likely to become loyal customers and advocates for your brand.


What is the relationship between customer experience and retention?

The enhancement of customer experience plays a crucial role in boosting retention rates by ensuring that every interaction a customer has with a brand is positive, seamless, and exceeds expectations. This positive experience builds trust and loyalty, mechanisms that are fundamental to customer retention. Loyal customers are more likely to repeat purchases and become brand advocates, directly contributing to a company's sustained success and growth.

What is customer relationship through retention strategies?

Retention strategies are essential for cultivating and maintaining strong customer relationships by consistently delivering value and recognizing customer loyalty. Key elements of these strategies include personalized experiences, responsive customer service, loyalty programs, and regular feedback loops. These elements work together to make customers feel valued and understood, encouraging their ongoing engagement with the brand.

What is a client retention strategy?

A client retention strategy is defined by its focus on keeping existing customers engaged and satisfied over the long term, distinguishing it from broader customer engagement approaches that may also target acquisition. Core components include personalized communication, rewards and incentives for continued patronage, and proactive customer support. This strategy prioritizes deepening the existing customer relationships over attracting new ones.

What is the impact of customer retention strategy?

Implementing a successful customer retention strategy has far-reaching impacts on a business's overall performance, including increased profitability, higher customer lifetime value, and improved brand reputation. These strategies reduce the cost of acquiring new customers by maximizing the value of existing ones. Additionally, satisfied, loyal customers are more likely to provide valuable feedback and refer new clients, contributing to a company's sustainable growth and competitive advantage in the marketplace.

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