Top

10 CX Strategies That Can Increase Customer Retention

July 8, 2024

Targeting new customers is key to scaling a business. However, retaining existing customers is equally important for a company to grow sustainably. This requires building loyalty and reducing customer-acquisition costs through word-of-mouth marketing.

Reports have noted that repeat customers spend 67% more than new customers. Improving customer retention also generates better upselling and cross-selling opportunities, which increase revenue and profit.

Nurturing your existing customers and improving your Web site to enhance their experience requires a well-planned customer-experience (CX) strategy. Now, let’s consider ten CX strategies that can guide your team in creating a better experience and enhancing customer retention.

Champion Advertisement
Continue Reading…

1. Personalization

Personalization is now much more than just a differentiating element. Keeping customers engaged and loyal to your services is essential. A McKinsey report found that a lack of personalization frustrates 76% of customers. Twilio Segment (PDF) suggested that 56% of buyers could become repeat customers through personalized experiences, with a 7% increase year over year.

You must tailor your customer experience to individual preferences and behaviors. Plus, you can analyze customer behaviors and leverage AI-powered algorithms to generate complementary product recommendations. Refine your customer segments regularly to keep personalization of the customer experience relevant.

Netflix has perfected its personalized recommendations framework, so customers choose it over other streaming services. Personalized recommendations are responsible for 80% of the content viewers consume on the platform, while they find only 20% via search.

As you can see in Figure 1, customers receive movie and series suggestions based on their viewing history and activity. The more someone watches content on Netflix, the more personalized the suggestions get. So customers keep returning to watch unique content that caters to their taste.

Figure 1—Viewing recommendations
Viewing recommendations

The result? Impressive customer retention and consistent profits over other over-the-top (OTT) media platforms. For example, a study by Umea University (PDF) found that while Disney+, HBO Max, and Hulu suffered losses in the first three quarters of 2022, Netflix reported a profit.

2. Simplified Onboarding

Getting onboarding right sets the tone for an entire customer experience. Too many steps and too much information during onboarding can overwhelm customers and even make them drop off without completing the onboarding process. Because of this many startups fail.

Design a simple onboarding process that lets customers begin quickly and efficiently. Create a flow that showcases the core features that customers need to solve their problems, giving them a few quick wins. Keep form fields to a minimum and offer clear instructions on getting started. This reduces friction and makes user onboarding seamless.

Slack’s Help center, shown in Figure 2, provides an onboarding guide with clear steps for setting up teams and channels. Plus, they’ve simplified their onboarding process over time. For example, before 2016, users had to create a password while signing up. They eliminated that step and instead sent an email notification afterward. Since 2019, they’ve sent a six-digit confirmation code rather than a password-creation prompt. But users still need a password after the sign-up process is complete. Such simplifications facilitate onboarding and reduce drop-offs, improving customer retention.

Figure 2—Slack’s Getting Started page
Slack's Getting Started page

3. Seamless Navigation

A smooth navigation experience lets your customers explore your offerings, find the information they need, and make purchases without hiccoughs. Customers keep returning to the Web site for their future requirements, improving customer retention.

In short, easy-to-use navigation and a well-designed information architecture are crucial elements for customer retention. Avoid using jargon in product catalogs. Instead use familiar terms so customers can easily understand your offerings. Place the most important landing-page links at the top of the home page so visitors can quickly find the most relevant information.

Menus should follow a hierarchical structure and logical flow. Place a search bar in a prominent location on all pages. Offer nuanced filters for price range, delivery time, color, material, and product type. Most importantly, tap into customers’ behavioral data to ensure that your Web-site layout and navigation resonate with your audience.

Amazon’s easy-to-use Web site, shown in Figures 3 and 4, provides a masterclass in offering seamless navigation and maintaining high design standards. From its search functionality with advanced filters to clear product categories that are based on seasons, trends, and customers’ needs, Amazon makes online shopping feel like a breeze.

Figure 3—Amazon’s desktop Web site
Amazon's desktop Web site
Figure 4—Amazon’s mobile Web site
Amazon's mobile Web site

The seamless customer experience extends to their mobile app as well. Home-page navigation showcases trending products and personalized catalogs, making it easy for customers to find their desired products quickly. Clicking the Search button displays the most popular product categories, which customers can easily browse to find what they need. Customers can click the menu in the footer to easily navigate to a desired category.

In short, Amazon has considered every possible aspect of navigation, whose simplicity is a huge reason why up to 99% of Amazon Prime members renewed their membership for the first and second year, respectively, in 2023.

4. Responsive Design

In 2023, smartphones generated 78% of retail site traffic and two-thirds of online shopping orders globally. Adopting a responsive Web design ensures that pages fit on different screens and offers a consistent customer experience across all devices. So customers can continue their shopping experience across different devices without missing a beat. They can add products to their cart while casually browsing on their laptop, then check out later on their phone. Responsive design provides an optimal experience across devices, elevating customer satisfaction.

Responsive design also requires the optimization of visuals, call-to-action (CTA) buttons, and other elements to reduce page-loading times and enhance the customer experience.

To create a consistent experience across devices, you can use responsive design templates from WordPress, Squarespace, Wix, or Shopify. For Shopify customers, their specially designed free Shopify themes can enhance the consistency and effectiveness of an ecommerce site’s customer experience, ensuring the attractive presentation and easy accessibility of products.

5. Effective Feedback Mechanisms

Proactive feedback collection lets you identify design flaws and painpoints and paves the path to constant design improvement. Plus, opportunities to provide feedback help your customers to feel heard and valued, increasing their loyalty and retention.

Place feedback mechanisms—such as feedback widgets that simplify the submission of reviews—on landing pages across your Web site. Integrate feedback mechanisms into your app’s experience. Ensure that customers receive feedback prompts after service completion every time. To improve the experiences of individual customer’s and increase retention rates, you can also send customers a business text message, confirming their participation and letting you capture every granular detail .

Uber maintains a high-value feedback mechanism across its Web site and app. In addition to customers’ receiving feedback prompts after every ride, the company shares informative blog posts about its commitment to feedback collection and implementation, as shown in Figure 5.

Figure 5—Uber’s feedback mechanism
Uber's feedback mechanism

A Web site can even collect feedback with its marketing material, as Figure 6 shows. After guests stay at Airbnb, they receive an email message asking for their feedback and can rate a host right within the message. This helps the rental marketplace rate hosts, identify issues in the customer journey, and improve services accordingly.

Figure 6—Airbnb feedback
Airbnb feedback

6. Gamification

Have you ever wondered why leaving a game after completing a game level is so hard? It taps into the brain’s reward system through dopamine and offers a sense of achievement.

By introducing gamification elements and immersive ecommerce designs to your customer experience, you can keep your customers engaged. You can award them points for reaching every milestone of the buying journey. Consider adding levels, badges, leaderboards, challenges, and rewards to keep customers returning to your platform.

Duolingo uses a gamification mechanism to make language learning fun and retain customers, as shown in Figure 7. It lets customers set their practice duration according to their comfort and sends customers reminders.

Figure 7—Duolingo gamification
Duolingo gamification

Bright colors, playful instructions, and fun characters hook learners to keep them pursuing their sense of achievement, as shown in Figure 8.

Figure 8—Duolingo’s learning experience
Duolingo's learning experience

The learning program is divided into game-like levels where customers earn badges for achievements and lose points for mistakes.

7. Community Building

Brand communities take relationships with customers beyond mere business transactions. They differentiate your brand, make your customer experience more memorable, and foster brand loyalty and advocacy.

Such communities are also excellent sources for collecting data about your customers’ needs. You can monitor conversations and run surveys among members to gather insights into the customer experience. Once you conduct an analysis of the data, you can remove friction points and keep customer engagement high. Such efforts contribute to greater customer satisfaction and retention.

Create a brand community on Patreon or Discord. Create and post exclusive content for members and encourage interactions and discussions between fans. You can also create a separate landing page for the community on your Web site.

For example, LEGO has a community page on its Web site where building-block enthusiasts can post their latest designs and engage with fellow LEGO fans. The platform lets them express their love for LEGO and gives them a reason to engage regularly. This community also nurtures their interest in the brand, increasing customer loyalty and retention.

Figure 9—Fans gather together on the LEGO site
Fans gather together on the LEGO site

As of 2023, in the US, LEGO enjoys the following:

  • 89% brand awareness
  • 53% popularity
  • 44% usage
  • 39% loyalty

With about 44% using the brand, their brand loyalty has soared to 89%.

8. Continuous Improvement

Besides gathering customers’ feedback, let customers submit feature requests through dedicated portals on your Web site and monitor this feedback closely. You’ll discover invaluable insights into evolving customer needs, enabling you to adjust your offerings accordingly. Doing so shows that you’re keeping customer needs at the forefront, which enhances customer satisfaction. Your customers won’t defect to your competitors and customer retention improves.

A diligent focus on making customer-centric improvements results in more efficient processes. Gathering customer suggestions leads to greater innovation and product development, keeping your company ahead of the competition. It also helps you identify friction points in your customer experience and smooth them out over time, resulting in greater customer satisfaction. All these efforts add up to higher customer-lifetime value (CLV) and greater customer retention over time.

Create a framework that informs customers about your continuous CX improvements. Customers who see that you’re adding the features they want engage more and their brand loyalty improves.

Holger Sindbaek, serial entrepreneur and the founder of Online Solitaire, says, “Our approach to continuous UX improvement revolves around deep engagement and analytics. We conduct regular A/B testing to refine features that users interact with the most, such as our game interface and navigation. A notable enhancement was when we optimized card animations based on behaviors, significantly reducing distractions and improving game flow. This led to an increase in average session duration by 15% and a rise in daily return players. These metrics underscore our commitment to evolving our platform in ways that directly resonate with and benefit our users, fostering a robust cycle of loyalty and brand advocacy.”

Google Workspace introduces new features and improvements based on customer suggestions and technological advancements. As shown in Figure 10, the brand announces the updates on its Web site.

Figure 10—New features and announcements on Google Workspace
New features and announcements on Google Workspace

9. A Streamlined Checkout Process

Customers often abandon their cart or fail to complete subscription purchases because of overly complicated checkout processes, leading to churn. If a checkout process is not sufficiently transparent or fast, this could rub customers the wrong way, and they might not return in the future.

Therefore, you must ensure that customers can conveniently make payments on your online store. A streamlined, secure, easy checkout framework can facilitate trust and loyalty, win customers’ confidence in your brand, and turn one-time buyers into loyal customers.

For example, PayPal One Touch lets customers pay with a single click, reducing friction during checkout on ecommerce sites such as eBay.

Figure 11—Instructions on using PayPal One Touch
Instructions on using PayPal One Touch

10. Proactive Customer Support

No matter how smooth your customer experience is, customers are bound to face glitches and issues occasionally. To achieve ultimate levels of customer satisfaction, your CX strategies must cover all potential support requests. Anticipate customer requests and maintain a support system that is always ready to accommodate them. Offer multiple channels for customers to seek quick customer assistance such as chatbots, Customer Support teams, automated email messages, and a Twitter handle.

HubSpot has a chatbot, shown in Figure 12, to help customers navigate their site and receive prompt assistance when they need it. The company also employs automated email marketing to provide customer support. Effective email-campaign management is crucial to engaging your audience and driving desired actions.

Figure 12—The HubBot
The HubBot

Conclusion

Perfecting the customer experience to retain your customers takes time. A perfected customer experience could require multiple rounds of testing, updates, and design iterations before it resonates with your customers from every angle.

From prioritizing onboarding to setting the right tone by gamifying app or Web-site elements and increasing customers’ motivation, to creating personalized experiences to improve customer engagement, you must factor in every minute detail that could affect the customer experience. After all, retaining existing customers is less costly and more feasible than acquiring new ones. Be diligent and agile. By continually adjusting to change, you can design a customer experience that improves customer retention. 

Founder at Ranking Bell

Mumbai, Maharashtra, India

Mehdi HussenAs the founder of Ranking Bell, a software-as-a-service (SaaS) marketing and organic-growth agency, Mehdi helps SaaS businesses drive organic growth and customer acquisition through search-engine optimization (SEO) and data-driven, content-marketing strategies. Mehdi spends his spare time musing about startup growth strategies, personal productivity, and remote work.  Read More

Other Articles on CX Strategy

New on UXmatters