The Best Practices to Improve Consumer Retention


  • Even with new customers coming in, company revenues, growth and valuation deteriorate when too many of those customers leave through the back door.
  • Customer retention strategies and best practices improve short-term revenues and create a multiplier impact to long term company growth.
  • Consumer churn can be a perplexing topic. However, market research brings clarity to the problem and simplicity to the most direct and effective solutions.
Johnny Grow Revenue Growth Consulting

How the Best-in-Class B2C Companies Improve Consumer Retention

Managing customer retention is an imperative to achieve a sustainable growth business. However, there is no one size fits all solution to improve consumer attrition. Simply implementing random loyalty or other programs may reduce customer churn but is more likely to deliver temporary and minimal results at a high cost.

A smarter approach is to understand exactly why consumers leave brands and apply consumer retention best practices to remedy those problems.

The Johnny Grow Customer Service Excellence Research Report identified the top reasons consumers leave brands, and the best practices used by the Best-in-Class leaders (the top 15 percent) to achieve the highest consumer retention rates.

Consumer Retention Best Practices

See the reasons B2C customers churn, and the consumer retention best practices used by the Best-in-Class leaders use to reduce attrition.

Click to Tweet

There are many tactics to reduce consumer churn, but the right tactics are the ones that directly respond to the reason's consumers leave. Only when precise methods are applied to specific problems will the company achieve meaningful results in a reasonable cost and timeframe.

Based on the research, below are some of the solutions used by the Best-in-Class leaders for each of the top causes of consumer churn.

Poor Customer Service

The causes of consumer churn are symptoms of underlying problems. 72 percent of consumers that left brands cited poor customer service. However, customer service is a response to an underlying problem, not the source of the problem.

Nonetheless, customer service is the backstop to consumer churn. Good customer support solves the consumers problem and feeds the problem back to the company origination point for root cause analysis and resolution at the source.

Really good customer support solves the consumers problem on the consumers preferred devices and channels, operates as a profit center, offers fee-based value-added services (i.e., concierge, Service Level Agreements, entitlements) and measures its financial impact to customer lifetime value and company revenues.

Poor Customer Experience

Competitive advantages used to be things like products, price, staff, service and location. But in the minds of consumers these are all easily substitutable and commoditized.

Consumers purchase criteria have evolved to wanting innovative products and services, brands that know how to engage and build relationships with them, and brands that know how to deliver consistent, rewarding and memorable customer experiences (CXs).

Connecting with consumers at an emotional level, by delivering CXs, built on the 4 trust elements of being reliable, relevant, convenient and responsive, and that make the customer feel delighted, appreciated, valued, engaged or rewarded, is a sustainable competitive advantage. It's sustainable because it is not easily copied by competitors or displaced by technology.

Customer experience starts with customer-centricity. Most consumer brands say they are customer centric, but their customers tell a different story, and say that most are really self-centric, product centric or much more internally focused than externally aligned with customers.

A revealing study from Bain & Company found that 80% of companies believe they deliver "superior experiences" however, the research found that only 8% of customers agreed.

Most consumer brands really define their business strategy from an inside-out perspective. That is solely or mostly from the company's perspective, and thereby craft company strategy, and customer facing business processes designed to be the most efficient and low-cost processes possible, or other objectives that serve only the brands interests. They fail to also consider an outside-in perspective, which means understanding what's important to consumers, and what consumers want in order to create a relationship with brands, and then crafting a strategy which includes those objectives.

Poor Fit

Poor product fit most often occurs when brands sell outside their target audiences or don't know exactly what their target audiences most want and are willing to pay for.

Both your product fit and customer retention strategy are equal to the quality of your consumer intelligence. And consumer intelligence is built on the five pillars of a 360-degree customer view, customer segmentation, customer insights, personas and journeys, and your Ideal Customer Profile (ICP).

Consumer Intelligence

As an example, a 360-degree customer view enables brands to see everything about the consumer in one place. However, while this is a frequently bantered goal, analyst firm Gartner advises less than 10 percent of companies achieve it. To do better and attain this goal, the brand needs to harvest and append the consumer record with 5 types of customer data – demographic, transactional, behavioral, environmental and social.

360 Degree Customer View

When brands pursue target audiences, they will increase customer acquisitions, generate additional sales, gain advocacy and referrals, maximize customer lifetime value and grow customer retention.

Poor Price or Value

There is often a knee-jerk reaction to cite price at the cause for consumer attrition. However, the research shows otherwise. Only 12 percent of consumers cited value or price as the cause of their departure. That's logical as if the price was not acceptable the consumer would not have made the initial purchase.

Nonetheless, product value is too often vague. It's up to the brand to deliver a clear and compelling Unique Value Proposition (UVP) and assure that value does not become fleeting over the life of the consumer relationship.

Price and value still count but once the consumer is acquired, they take a back seat to other factors that are more influential.

A Better Competitor

Business to Business (B2B) customers generally incur lengthy evaluation processes, negotiation and installation services. It's a big commitment they are not anxious to walk away from.

However, consumers are not nearly as tied to their solutions and therefore more easily leave an existing product for the latest and greatest competitor.

Continuous innovation programs and customer strategies such as Customer Experience Management (CXM), customer engagement and customer relationship management (CRM) are a few of the top methods to keep consumers from migrating to competitors.