Customer Retention: Playing Offence, Midfield and Defence for Sustainable Growth
/Customer retention is often overlooked as a key growth driver, yet it holds the power to unlock untapped revenue, profitability, and long-term business success.
Selling to existing customers has a 60%-70% success rate, compared to 5%-20% for acquiring new customers【1】. What’s more, increasing customer retention rates by just 5% can boost profits by 25%-95%【2】. A well-defined retention strategy will extract the untapped value from your existing customer base and transform the economics of your business.
This article explores the Customer Retention Gameplay and how businesses can adopt a proactive approach by playing offence as well as defence when retaining customers and deepening the commercial outcome. We’ll also examine strategies from companies excelling in customer retention.
1. The Customer Retention Gameplay
The Customer Retention Gameplay highlights the benefits of a focused retention strategy, including:
Increased Use Cases: Time builds trust and encourages frequent, deeper usage.
Monetisation Opportunities: A 1% increase in monetisation can lead to a 12.7% bottom-line boost.
Virality and Advocacy: Happy customers become natural advocates, driving referrals and organic growth.
Higher Lifetime Value (LTV): Retained customers allow you to target higher-value audiences and invest more in acquisition, with a compounding effect.
2. Playing Offence: Drive Retention Through Proactive Strategies
To excel in retention, businesses must focus on creating engaging, memorable experiences from the first interaction. Playing offence means proactively driving adoption, engagement, and loyalty in those early days when churn risk is at it’s peak for uncommitted users and customers.
2.1. Accelerate the Aha Moment
The "aha moment" is the instant customers experience the value of your product or service. It’s a turning point for retention and long-term engagement. It is a crucial micro-experience that combats “buyer’s remorse” and tackles early churn.
Buyer’s Remorse is the sense of regret after making a purchase. The aha moment should provide reassurance, affirm the purchase, and neutralise that feeling of remorse.
Strategies:
Onboarding: Repeatedly reaffirm the core value throughout the onboarding journey.
Path to Aha: Automate email flows to guide users toward their first key milestone, avoiding the need for them to fend for themselves.
Personalisation: Leverage behaviour and preference data to create familiarity and affirm the customer’s decision.
Example: Canva’s intuitive design platform accelerates the "aha moment" with templates that let users create stunning visuals within minutes.
2.2. Segment for Personalisation
Segmentation is critical for retention by delivering tailored, relevant experiences that keep users engaged. By categorising customers into distinct groups based on personas, behaviours, or usage patterns, businesses can address specific needs and preferences more effectively. This ensures that customers feel understood and valued, which is key to fostering loyalty and reducing churn. Retention thrives when customers consistently receive communications and experiences that align with their expectations and interests.
Strategies:
Social Proof: Create case studies for specific industries or demographics that highlight measurable results and success stories. These build trust by showing potential users how others like them have benefited from your product.
Content: Offer personalised tutorials tailored to different use cases, ensuring customers see how your product addresses their unique needs. This reduces friction and makes the learning process more engaging.
AI: Use machine learning to predict customer needs and recommend solutions proactively. By delivering relevant recommendations at the right time, you can enhance user satisfaction and drive deeper engagement.
Example: HubSpot segments users into marketers, sales professionals, and customer success teams, providing each group with unique onboarding and content.
2.3. Build Habit-Forming Behaviours
Developing habit-forming behaviours create a natural, ongoing connection between customers and your product. When users integrate your product into their daily routines, they are less likely to churn and more likely to find consistent value over time. Habit formation builds familiarity, reduces friction in usage, and creates a sense of reliance that deepens loyalty.
Strategies:
Gamify experiences to incentivise regular use: Incorporate elements like points, badges, or leaderboards to make engagement enjoyable and rewarding. Gamification taps into users’ competitive or achievement-oriented behaviours, encouraging consistent interaction.
Use push notifications or email nudges to encourage action: Send timely, contextual reminders or updates to re-engage users who may be inactive. These prompts should be personalised and actionable, drawing attention to new features, unfinished tasks, or upcoming benefits.
Create challenges or milestones that reinforce usage: Develop short-term goals or rewards that users can achieve through regular engagement. These milestones provide a sense of accomplishment and keep users motivated to continue using your product.
Example: Peloton drives habit formation with gamified leaderboards, personalised class recommendations, and community challenges.
3. Midfield: Sustaining Engagement and Preventing Churn
Midfield retention strategies focus on sustaining customer engagement while identifying leading indicators and addressing warning signs of churn. When a customer has been using your product a while, the initial exhileration of the aha moment begins to wear off, the customer’s needs and wants may evolve, they will become more susceptible to enticements from competitors.
3.1. Monitor Engagement Signals
Monitoring engagement signals is a critical component of retention strategies because it helps businesses identify customers who may be at risk of churning. By tracking how often users interact with your product, the features they engage with, and their overall activity patterns, you can detect early warning signs of disengagement. This proactive approach allows businesses to intervene with targeted actions, such as personalised outreach, helpful content, or incentives, to re-engage customers before they leave. Consistent monitoring of engagement not only reduces churn but also provides valuable insights into what drives user satisfaction, enabling continuous improvement and fostering long-term loyalty.
Key Indicators:
Login frequency.
Content consumption.
Use of high-value features or integrations.
Login Frequency
Login frequency is a critical indicator of how engaged your customers are with your product or service. Frequent logins suggest that the product is integral to their workflow or daily routine, whereas a drop in logins can be an early warning sign of churn.
Why It Matters:
Frequent logins show that users are deriving value and rely on the product.
Declining logins can indicate disengagement or frustration, signaling the need for intervention.
How to Act:
Send gentle reminders or nudges to infrequent users through email or push notifications.
Use analytics tools to identify when and why login frequency drops and target those users with re-engagement campaigns.
Example: Dropbox monitors login activity and re-engages users who haven’t logged in with personalised tips or promotions to renew their interest.
Content Consumption
Tracking what content users interact with helps you understand their level of interest and engagement. Whether it’s blog posts, videos, or product tutorials, content consumption patterns provide insights into user needs and preferences.
Why It Matters:
High content consumption indicates an engaged user who is exploring and learning about the product.
Low consumption may suggest confusion, lack of interest, or unmet expectations.
How to Act:
Create tailored content recommendations to match user preferences and keep them engaged.
Provide dynamic in-product prompts linking to relevant resources for users who seem stuck or inactive.
Use data to refine your content strategy, focusing on what resonates most with your audience.
Example: Coursera tracks which courses or lessons are consumed most frequently and sends recommendations based on a user’s past behaviour, improving retention rates.
Use of High-Value Features or Integrations
Engagement with high-value features or integrations is a strong predictor of retention. These features often represent the core value of your product or service and indicate how deeply users are embedded in your ecosystem.
Why It Matters:
Users who regularly use advanced or high-value features are more likely to see the full potential of your product, increasing stickiness.
Integrations with other tools (e.g., connecting your app to other apps with in the customer’s ecosystem) deepen dependency, making users less likely to churn.
How to Act:
Highlight underused high-value features through personalised tutorials, tooltips, or in-app notifications.
Monitor which integrations are most popular and ensure they are easy to set up and maintain.
Create campaigns targeting users who haven’t tried high-value features, incentivising them to explore these tools.
Example: Asana monitors usage of its advanced features, such as timeline views or integrations with Google Workspace, and sends educational content to users who have yet to explore these features.
3.2. Personalise Content
Tailored content reinforces value and keeps users engaged.
Strategies:
Monthly newsletters showing product usage and ROI: Share tailored reports that detail how customers are benefiting from your product, such as time saved or improved outcomes. This reinforces the value they’re receiving and validates their decision to stick with your brand.
Personalised tips or insights based on customer behaviour: Provide actionable recommendations or best practices that align with how individual users engage with your product. This ensures the advice feels relevant and helps them maximise their experience.
Highlighting new features or integrations relevant to specific user segments: Announce updates or tools that cater to distinct customer needs, demonstrating your product’s continuous evolution. These targeted highlights keep users excited and invested in exploring what’s new.
Example: Grammarly sends detailed reports showing users how much time they’ve saved and errors they’ve avoided, reinforcing the value of its service.
3.3. In B2B - Expand Beyond the Champion
For B2B companies, relying on a single "champion" user can be risky. Multi-user adoption strengthens relationships and reduces dependence on one advocate.
Strategies:
Introduce team-wide onboarding sessions: Host onboarding sessions that involve entire teams to ensure widespread adoption and understanding of your product. This fosters collaboration and reduces reliance on a single advocate within the organisation.
Enable sharing of workflows or templates among users: Provide tools that allow users to easily share customised workflows or templates with their colleagues. This encourages team collaboration and increases the utility of your product across the organisation.
Alert account managers if the champion user leaves the company: Set up notifications to alert your team when a key user departs, enabling proactive outreach to maintain engagement with the organisation. This minimises disruption and ensures continuity of product usage.
Example: Monday.com ensures multi-user adoption by promoting shared workspaces and offering team-specific training.
4. Playing Defence: Reduce Unecessary Churn and Design For Win Backs
Most retention strategies already heavily lean towards playing defence to prevent churn but often miss the importance of maintaining goodwill for win-back opportunities even when the customer is adamant they are leaving.
4.1. Address Involuntary Churn
Involuntary churn is a silent threat to retention, often caused by preventable issues such as failed payment methods, missed communications, or technical errors. Unlike voluntary churn, where customers choose to leave, involuntary churn occurs without their intention and can often lead to unnecessary loss of revenue and goodwill. Addressing these overlooked problems requires businesses to implement proactive measures, such as sending timely reminders for failed payments, ensuring emails avoid spam filters, and offering multiple payment options. Automated systems can detect these issues early and prompt users to resolve them seamlessly, reducing frustration and improving the likelihood of retention. By minimising these friction points, businesses not only retain customers but also reinforce their reliability and commitment to a positive customer experience.
Solutions:
Automate follow-ups for failed payments: Implement systems that send immediate reminders when payments fail, along with easy steps to update payment methods. This reduces revenue loss and streamlines the process for customers to stay subscribed. Beware of your reminders ending up in spam.
Use SMS reminders for critical updates: Send concise, timely text messages to notify customers of urgent matters, such as expiring subscriptions or service interruptions. SMS has high open rates, ensuring your message is seen promptly.
Offer 24/7 support to resolve technical issues quickly: Provide round-the-clock support through chatbots or live agents to address customer concerns in real-time. Quick resolutions help build trust and prevent minor issues from escalating into churn.
4.2. Engineer a Thoughtful Exit Journey
A thoughtful exit journey is a powerful tool for reducing churn and maintaining goodwill, even when customers decide to leave. A well-designed cancellation process can reduce churn by up to 10% (3), as it gives businesses the opportunity to address customer concerns, offer alternatives, and leave the door open for future re-engagement. For example, instead of immediately processing a cancellation request, businesses can provide options like pausing subscriptions, downgrading plans, or highlighting underutilised features that could enhance the user’s experience. Collecting feedback through short exit surveys can uncover common reasons for churn and inform future improvements. Additionally, creating a positive and respectful offboarding experience ensures that customers depart with a favourable impression, increasing the likelihood of future win-backs or referrals. An effective exit journey is not just about reducing immediate churn—it’s about laying the groundwork for long-term relationships.
Strategies:
Understand reasons for churn with surveys: Use short, focused surveys to gather insights into why customers are leaving. This data helps identify common issues and refine your offerings to prevent future churn.
Address concerns with tailored solutions (e.g., pausing subscriptions instead of cancellation): Offer flexible options such as pausing subscriptions or downgrading plans to accommodate customer needs. These alternatives can help retain users who might otherwise leave permanently.
Ensure customers leave with a positive impression to enable future win-backs: Create an offboarding experience that leaves the door open for future engagement, such as a personalised farewell message or an exclusive win-back offer. A good exit experience can turn former customers into future advocates.
Example: Netflix’s cancellation process highlights paused accounts as an option, reducing churn while maintaining goodwill.
4.3. Analyse Your Best Customers
Understanding the behaviours and motivations of your best customers is essential for driving retention and replicating their success across your broader user base. These loyal customers often reveal what works best within your product or service, providing actionable insights into which features, use cases, or experiences deliver the most value. By analysing their journeys—such as the actions they take, the features they engage with most frequently, and the moments that prompted them to expand their usage—you can identify patterns that contribute to long-term satisfaction and loyalty. This knowledge allows you to refine onboarding, highlight underused high-value features, and tailor communications to guide other users down a similar path. Learning from your most successful customers not only strengthens your retention strategy but also creates a roadmap for scaling engagement and loyalty across your entire audience.
Questions to Ask:
What actions do they take? Analyse the specific behaviours or steps customers frequently perform within your product. Understanding these actions can reveal which functionalities drive the most engagement and satisfaction.
What features do they use most frequently? Identify the features that your most loyal customers rely on. Highlighting and refining these features can encourage broader adoption and deeper usage among other users.
What prompted them to expand their usage? Determine the triggers or moments that led customers to explore additional features or upgrade their plans. Use these insights to replicate similar experiences for other users.
Example: Miro analyses top-performing users to refine its onboarding process, ensuring new users follow similar paths to success.
5. Leveraging Technology for Retention
Technology to personalise customer experiences, automate key interactions, and gain predictive insights will help drive proactive engagement. Personalisation technology, such as AI-driven recommendation engines, ensures customers receive relevant content, product suggestions, or features tailored to their preferences. Automation streamlines workflows by sending timely reminders, onboarding guides, or re-engagement campaigns without manual intervention. Predictive analytics, on the other hand, allows businesses to anticipate customer needs, identify potential churn risks, and take preemptive actions to maintain loyalty. By integrating these technologies into their retention efforts, businesses can create seamless, impactful customer journeys while optimising internal efficiency. Leveraging technology not only enhances the customer experience but also builds long-term relationships that drive sustainable growth.
How Technology Enhances Retention:
AI: Predict churn and recommend proactive measures: Leverage AI to analyse user behaviour and identify at-risk customers before they leave. Use predictive insights to deploy targeted interventions, such as personalised offers or support outreach, to retain them.
Automation: Streamline engagement with personalised workflows: Automate routine processes like onboarding, reminders, or follow-ups with custom workflows tailored to each user’s journey. This ensures timely, relevant engagement while reducing manual effort.
Analytics: Identify trends and refine retention strategies: Use data analytics to uncover patterns in user behaviour, such as features that drive engagement or reasons for churn. Continuously refine your retention strategies based on these insights to improve outcomes.
Stat: Businesses using AI-driven retention strategies report a 10-15% increase in customer lifetime value (4).
6. Measuring Success
Measuring the success of retention strategies is critical to ensuring continuous improvement and long-term customer loyalty. This requires a data-driven approach, focusing on key metrics that provide insights into customer behaviours and the effectiveness of retention efforts. Retention success requires continuous improvement, driven by data. Key metrics include:
Churn Rate: The percentage of customers lost over time: This metric highlights how well your retention strategies are performing. A high churn rate signals areas that need immediate attention, such as user engagement or customer support.
Net Promoter Score (NPS): Measures customer satisfaction and likelihood to recommend: NPS helps gauge overall customer loyalty by asking how likely customers are to recommend your product. High scores indicate satisfied customers who are more likely to stay and refer others.
Lifetime Value (LTV): The total value a customer generates over their lifetime: LTV reflects the long-term financial impact of retaining a customer. A high LTV allows for more aggressive acquisition strategies, as you can invest more in attracting new users.
Conclusion: Retention as a Growth Mindset
Customer retention is not just a defensive tactic—it’s a proactive, growth-oriented strategy. By playing offence to drive early engagement and habits, midfield to ward off competitors and defence to prevent churn and enhance win-back opportunities, businesses can unlock sustainable growth while maximising customer lifetime value.
Citations
Harvard Business Review: "The Economics of Customer Retention"
Bain & Company: "The Value of Retaining Customers"
Forrester: "Reducing Churn with Thoughtful Offboarding Strategies"
Gartner: "AI in Customer Retention"