4 Ways to Improve Your Customer Retention Through Metrics

Too often we spend our time and energy on gaining new customers but forget about the customers we already have.

Fred Reichheld, the author of the Loyalty Effect, points out that a mere 5% increase in your client retention can result in a 25% to 100% increase in profits for your business. You may see this change reflected in repurchases, referrals and upsells.

Customer retention should be at the forefront of every marketer's mind.

Naturally, you already should be keeping track of your client retention rate, however, below we’re going to explore how four key metrics do influence that retention rate. And more often than not, these are the very four, which are overlooked.

Measuring your customer satisfaction is vital, however, you want to do this in a way that is understated, so your clients don’t feel as though they are bombarded with surveys, polls, and other strategic measures.

The following KPIs can be measured without you having to ask your customers directly for a response.

1. Response Time

How long does it take you to follow up once a client makes contact?

Does the email or phone message lay unattended for hours, days or maybe even months at a time?

The time you take to respond plays a huge part in customer satisfaction and is probably one of the biggest factors influencing your client retention.

Think of it this way, while you are trying to make the sale, you consistently make yourself open to your prospects - and you follow up! Right? Well, those efforts should remain and continue once you have your prospect on board and the deal has been signed, sealed and delivered.

I’m sure you can reflect back to a time in your consumer experience when you needed to get hold of a vendor, and they remained nowhere to be found. It’s frustrating. After some significant time, naturally, your views toward the company dwindle from delight to “I’m never buying from this company again”. That’s not the way you want your customers to turn.

Whether it’s a minor technical glitch, a question to an email or a thank you message; ignoring any form of communication is an act of negligence. It doesn't leave a good impression with your customers.

Don’t forget that without your buyers; you wouldn’t have a business. I’m sure you feel appreciated when you’re acknowledged, so be sure to offer your customers that same level of appreciation. Offer quality service always.

Watch your communication outlets and answer these in a timely fashion. Be willing to go the extra mile and attend to all question, or solutions your customer may need.

If your average reply time is lagging, this could be the place to start making improvements. To support the monitoring process, you can break down your response times into outlets: Phone, Email and  Live Chat.


Did you know that approximately 53% of customers believe that 3 minutes is an acceptable response time when waiting for a client representative to answer their call? Are you aware as to how long your business keeps customers waiting?

We’ve all experienced a time when we feel like we’ve been on hold for what seems like eternity. Attempt to reduce your call wait time. Consider adopting a customer call-back system, which can also alleviate the client wait time. Be sure to call them back, though!


While inboxes can be an overflowing box of messages, it’s important to stay on top of customer feedback or queries. Don’t let these get lost in the sea of emails.

A good rule-of-thumb to go by is 24 to 48 hours for an email response. However, with the immediacy that email and text message have instilled, it’s more likely that people will expect a response that same day. We’ve also seen the time of reply growing closer to one hour now. Be mindful of your average time length for email responses.

Don’t overwhelm yourself with the idea of getting back to each client enquiry within the hour. You’ll drive yourself mad and become ineffective at attending to many other things if you stress. Decide what your response time window is going to be and build that into your company mantra.

Another study also outlined that 50% of consumers award businesses up to one week to respond to a query before forming a negative impression.

Consider adopting an autoresponder, which thanks your customer for their query and notes the timeframe that they will receive a response within. When you communicate this information to your clientele, they will feel as though they have been heard and will patiently wait to hear back.

Live Chat

The modern approach of having a live chat support on your website is an excellent way to provide quick customer service.

The best thing about a live chat is that you can answer several queries at once with a live chat. Unlike email, you can answer your customer's questions in real time, which automatically cuts short your response time.

Many chat providers have built-in analytics dashboards, which help you track response times and log all customer interaction information. Do your research to determine which is right for your business.

You can try out LiveChat or Tawk.to as a starting point.

2. Referrals

If you haven’t yet tracked your customer referrals, we suggest you start now.

Customers are the best sales people you will ever find - especially if they are happy customers. Remember, word of mouth is one of the most power marketing tools. Customers will tell their friends, provide testimonials and refer colleagues and family, amongst others if they are happy with your service and brand.

If your customer referral rates are high, that’s an indication your customer satisfaction rates are also excellent.

And just because your clients aren’t already talking about you, it doesn’t mean you’re offering a poor service; it only means there is room for improvement. What could you do to take your service from good to being extraordinary?

Affiliate programs, are another tools that you can utilise to your advantage. Along with refer-a-friend incentives. These reward your customers for helping you attract new business, but they also can provide many insights to your business. Through this system, you may start to find out more around why people are recommending your company.

If Referral Programs are not right for your business - which may be the case - don’t rule out monitoring your customer referrals. The referral metric is still very valuable to follow.

3. Repeat Customers

Businesses who offer a service (SaaS), track customer retention by how long someone stays subscribed to their service. You either have customers, or you do not.

So how do you measure customer retention if you're a business that sells products? The greatest problem lies in finding out if you’re customer is still a customer, or whether they have found another company that services their needs.

You’ll know by repeat purchases.

While social media can be a platform for your customers voicing their dissatisfaction or sheer love of your product, others will let you know in a more subtle (yet powerful) way - continuation of product purchase.

This KPI is easily tracked by the majority of eCommerce platforms. So all you need to do is monitor this metric and keep up the good work, which begins with excellent customer service.

4. Post-Conversion Data

A lot of businesses have adopted Inbound Marketing practices, but many companies are still new to it.

Much like we pointed out at the beginning of this article, most organisations focus on gaining new business and forget about their existing clients. This is a big mistake. Don’t forget your loyal customers.

Measuring and tracking your consumer's activity and behaviour on your various platforms, i.e., website, through email marketing and social media, are just as critical in the post-conversion stage, as they were as a fresh lead.

Ensure your customers are engaging with your content. Keep it fresh and do whatever you can to be sure they keep you at the forefront of their mind.

Customer behaviour holds great insights around their levels of satisfaction and whether they’ll continue as a client.

The most important KPIs to monitor are:

  • Average time on website
  • Pages Viewed
  • Email open and click-through rate
  • Items added to cart

The reasons why Inbound Marketing can be so successful is that it kills two birds with one stone - you target customer acquisition and retention all in one. Measuring your key metrics and monitoring all your marketing initiatives as much as possible keeps you in the game. By being aware of your consumer’s behaviour, you can keep your customers happy and most often they’ll hang around for a long time.

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