The data on customer retention is impressive. A 5% increase in customer retention can lead to a 95% increase in profit. That’s partly because existing customers spend 31% more with a business than new customers. Meanwhile, it’s anywhere between 5 and 25 times more expensive to acquire a new customer than keep an existing one.
All this goes to show that customer loyalty is one of the most powerful factors out there to boost your business revenue. But how do you measure loyalty? A crucial tool will be customer retention surveys.
Customer retention surveys are the lens through which you can get an insight into what your customers are feeling about your brand. Typically, they use the Net Promoter Score to help you gauge churn risk and the likelihood that customers will recommend your brand to others.
However, in any customer retention strategy, simply implementing the survey is not enough. Instead, you’ll need to make sure you act on the survey findings too. And that means putting targeted steps in place to drive growth.
Here, we explore what you need to know about these surveys—from setting up a retention survey program to the best practices to follow to boost your revenue.
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What is a Customer Retention Survey?
A customer retention survey is one of the best ways for you to gain insight into how your customers feel about your business, product, or service. More specifically, it helps you to understand which customers are at risk of churn, which remain loyal, and—most importantly—why.
Typically, customer retention surveys use the Net Promoter Score (NPS), one of the most reliable systems to gauge customer experience and predict future retention.
NPS tracks the likelihood of customers to recommend your product, through what’s known as the NPS question:
On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?
It’s a powerful question to ask customers not only because of the insights it gives in terms of retention. What’s more, the likelihood of a customer to recommend a brand has been found to be the best predictor of a company’s revenue growth.
But there’s more to customer retention surveys than a single simple question. Unlike other customer loyalty metrics, NPS gives you an insight into the reasons why your retention rate is high or low. In short, it gives you the opportunity to listen to the voice of the customer to understand their perspective—and ensure they’re happy.
But how do you implement a customer retention survey based on NPS? It can be pretty straightforward. To get started, follow these 7 steps.
How to Set Up a Customer Retention Survey Program
Understanding your customer sentiment is one of the best ways to secure greater retention and improve revenue growth. However, there are structured ways of doing this. Let’s take it from the top.
1. Set Survey Goals
Before you ask any customers anything at all, you need to understand what you want to achieve from your survey campaign. And “to gauge customer retention” is not always a good enough goal.
In reality, customer retention goals can be surprisingly diverse—from improving particular touchpoints to understanding specific customer segments. Before you go anywhere, you’ll need to ensure that you’re absolutely clear on what you’re hoping to achieve. Because your goal will impact your survey, including who you ask, what youask, and when.
By the way, we found that companies that set customer experience goals tend to grow twice as fast as other businesses. So, it’s really worth doing.
2. Choose the Right Questions
For your specific customer retention goals, you’ll need to ask the right survey questions. There are a couple of things to consider here:
Relational vs Transactional Surveys
Not all customer retention surveys are the same. And the two most important differences are between transactional and relationship surveys:
Relationship surveys. These are surveys that track your customer relationship over the long term. They ask customers about how they feel about your brand or service as a whole and gather general loyalty data. Overall, relationship surveys provide a headline figure—as well as a good benchmark—of your customer experience performance overall.
The question itself is likely to look a little like this:
Transactional surveys. Meanwhile, transactional questions are more specific, as they ask customers whether they would recommend your brand based on a particular transaction or experience. This way, you can get a clearer insight into how specific drivers are affecting your customer retention. For example:
Typically, comprehensive customer experience programs will use both types of retention surveys. But again, which you choose will depend on your goals.
In the past, businesses would often use conventional customer satisfaction (CSAT) surveys that would ask customers lots of questions and make large demands on their time. These days, NPS is used much more often, as it is fast, short, and simple (while delivering valuable insights to you too).
This brings us to a crucial point about the questions to ask: make sure you ask the right number of questions. Our research has found that 2-6 questions is the optimal range for customer retention surveys, and that 3 is probably the perfect number.
Typically, a demographic question will be important here, if you’re segmenting your customers at all. Meanwhile, a driver question will be absolutely crucial to understand the reasons behind your customer sentiment. It can look a little bit like this:
To understand how you can boost your retention in future, it’s a necessary insight.
3. Distribute the Survey
Next, consider the methods you’ll use to distribute your surveys. There are many options—including directly on your sales page, through text message, or through email.
For B2B brands, we recommend using email, as business addresses are typically easier to source and more reliably used than phone numbers. But watch out: phone surveys can deliver better results in terms of response rates and retention, as we found in our NPS and Customer Experience Benchmarks report.
Something to remember here is that the higher your response rate the better. But crucially, the higher the number of individual responses from each account the better. When distributing your customer retention survey, don’t just send it to one individual from each account. Instead, using multiple touchpoints can improve your retention by 18%.
And a bonus tip: send out your surveys in batches—not all at the same time. Why? Because it will help make your work more manageable when the responses come back in.
Learn more: When to send your NPS surveys.
4. Analyze—and Monetize—Responses
With the survey gone, job done. But not quite. As customers return their surveys, you’ll need to analyze them—and link their findings to your financial data.
How can you analyze your customer retention results?
Firstly, calculate your NPS Score, by subtracting the percentage of detractors from your percentage of promoters. This will be an important benchmark in future.
By the way, you can find out how other brands perform in the world’s largest database of NPS benchmarks.
Attribute an NPS score to individual drivers, if that’s what you want to know. Is a particular driver causing particular damage to your retention?
Monetize your results. Now you need to work out what financial impact each of your drivers is having—as well as the value of those customers who are most at risk of churn. Do this by connecting account revenue to survey results to drive insight into the value of those results.
Customer retention management platforms such as CustomerGauge can help to make this easy, by automating the whole process. Check out our demo to find out how it works.
5. Close the Loop
Two final steps follow your customer retention surveys. Firstly, you need to close the loop. Then, you’ll target specific measures to grow. Let’s start with closing the loop.
For every customer retention survey you do, reach out to your customer to show that you have acted on their feedback. This is known as closing the loop and can be instrumental in turning detractors into promoters and preventing churn.
Everyone in your business should be involved. Frontline staff, for example, can handle immediate customer feedback, while the C-suite can adjust company strategy and funding to improve your approach to customers.
Finally, every survey should be the fuel for action. After all, that’s what they’re for. So, now you’ve collected your feedback, it’s time to use its data to inform your growth.
How does this work in practice?
Engage with churn risks—prioritizing the most valuable. Customer retention surveys show you which customers are unsatisfied and what they want you to do better. Reaching out to your detractors is good practice here. But by overlaying customer satisfaction results with financial metrics, you can see which churn risks are worth most to your business. They should receive your attention first.
Target loyal customers for referrals. The most loyal customers in your business are a great opportunity for referrals and reselling campaigns. But while promoters are likely to recommend you to others, it doesn’t mean they actually will unless they’re prompted. So, ask them to do it.
Nurture customers for upselling and reselling. Happy customers are more likely to buy more from you. Identifying your most happy accounts, or ‘promoters’, gives your sales team a clear set of target accounts to focus their upsell efforts on.
6 Customer Retention Survey Question Best Practices
Now that you know the process, you’ll need to perfect your surveying system. With CustomerGauge, we make that easier, by automating the whole process and putting monetization data front and center.
Yet there are some things you can do to ensure that you keep your response rates—and ultimately your retention—high. Here are 6 places to get started:
Keep the questions to a minimum. The more questions you ask customers, the less likely they are to respond. As we shared above, between 2 and 6 questions is the optimal number.
Make the survey look good. With surveys, first impressions count. Making sure that your survey design is sleek, professional, and trustworthy can make the difference between a high response rate and one that doesn’t give you the insights you need.
Of course, the text matters too. For example, avoid multiple exclamation marks and capitalized words. Not only does it look unprofessional, but it can get caught by your respondents’ spam filters too.
Survey enough customers. Statistical significance isn’t your first priority for your surveys—as these surveys are not research tools but action tools. However, the more responses you get, the more reliable your data. If you aren’t getting responses from your highest value account, this could provide a dangerously biased view of your revenue health. This makes survey response rate a really important metric.
Send the survey at the right time. Now, times of day or days of the week on which to send your surveys don’t really have a massive impact on your response rates (although many people will try to convince you otherwise).
But when you send your survey matters in different ways. For example, sending a survey after customer service interactions will ensure that the interaction is fresh in the customer’s mind. As a result, they’ll be more likely to respond.
Follow up on your survey—once. If customers don’t respond to your survey, it’s absolutely okay to send them a little reminder. But only do it the once. Any more than that and you’re likely to be a nuisance.
Always close the loop. It’s worth repeating. At the end of the day, your customer surveys are about boosting retention, and there’s one simple thing that has an impact on retention that you just can’t neglect: that’s closing the loop. Aim for 100% of customers.
We run an annual awards show that highlights the best-in-class achievements in B2B CX metrics. Check out the winners here to understand what great looks like.
CustomerGauge Can Help
At CustomerGauge, we can help you get started with your customer retention surveys, from asking the right questions to understanding the results. Book a demo to get started.
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