Best Customer Retention Software Tools & Methods For Maximising Your CRR

What Is Customer Retention Software?

Customer Retention Software is a tool designed to help businesses retain their existing customers by ensuring they’re happy, satisfied, and engaged.

By providing customer-focused features such as Customer Relationship Management (CRM) integration and customer analytics, businesses can reduce customer churn and maximise their customer retention rates (CRR).

Customer Retention Software matters; which is why 64% of CX leaders expect to have larger budgets in 2024 for customer experience initiatives.

However, improving customer retention requires the right tools and a detailed understanding of your customer base. In some cases, you could be missing a variety of easy wins. That’s where Help Desk Software and, specifically, Customer Retention Software tools come in.

3 Ways Customer Retention Software Can Improve Your CRR

1. Improved lifetime value (LTV): Bain & Co. found that increasing retention rates by as little as 5% can improve revenue by 25-95%. The more customers you retain, the more recurring revenue you can generate or the more upsells and cross-sells you can secure.
2. Improved customer acquisition cost (CAC): CAC (calculated as sales and marketing expenses divided by the number of new customers) improving your CAC should always be in mind. Great reviews and recommendations attract customers without a marketing fee, and 72% of consumers will share a positive experience with 6 or more people.
3. Better ROI: It makes no sense to fill your marketing funnel with new customers only to lose them quickly. You’ll waste the investments in training, onboarding, and customer support expenses.

How to Measure Your Customer Retention Rate

Here’s how to calculate the customer retention rate in the simplest terms, sometimes known as ‘calculating ​​CRR’.

1. Find the number of customers you had at the beginning of a period, such as a year. Let’s say you have 100
2. Find how many you end the period with, e.g. 120 customers
3. As 40 are new, you must remove them from your 120 customers, leaving 80 retained. Your retention rate is (80 / 100) * 100 = 80%, which means you retained 80% of your starting customers

To summarise, CRR is Customer Retention Rate = (Customers at the End of the Period) – (New Customers Acquired) / Customers at the Start of the Period.

What Does a Good Customer Retention Rate Look Like?

An analysis of over 40 customer retention reports on Statsitca – covering topics as diverse as insurance in Japan, food delivery services in the USA, and dating apps, shows that customer retention rates vary significantly from 15% to 99%.

By analysing these varied figures, excluding extreme outliers, most industries cluster around a 50-60% retention rate, but results are context-dependent and best understood within specific industry categories. For example:

• Media and professional services have been shown to have retention rates as high as 84%. Amazon Prime, for example, boasted a 99% renewal rate for second-year subscribers in Q1 2023.
• Hospitality, travel, and restaurants showed the lowest retention rates at 55% in some cases, and food delivery services like Blue Apron have reported retaining only 15% of customers in a year.

Top Tip: Look Beyond the Stats

Stats alone can never tell the whole story. Consider Youyuan’s Yuehuiba, an online dating app with a reported retention rate of 20.83%. It may sound poor, but when your service is all about delivering the love of your life, a low retention rate is a good thing.

Size also matters. In 2021, Amazon was reported to have contact centres with over 100,000 customer-service associates in 32 countries; that’s hard to beat. Similarly, if you have just five clients to whom you can give VIP service, you could get a 99% or 100% CRR.

Using Customer Retention Software, Rewards Programs, and AI to Boost CRR

Deploying Artificial Intelligence (AI)

Conversational experiences with AI will only become more critical in enhancing retention, and the change is happening now. A Zendesk study showed that 6 in 10 customer service agents say a lack of consumer data often causes negative experiences.

Through the implementation of AI tools, businesses can:

• Use customer data to inform interactions with account managers and support teams so customers don’t need to repeat their issues.
• Prioritise and route support tickets to the correct departments, reducing resolution times.
• Support data analytics, helping to tailor marketing efforts and communications with individual customer preferences.
• Use Natural Language Processing (NLP) to help chatbots understand and resolve queries quickly so they can provide instant, 24/7 information. Instead of literature, they can talk customers through complex processes, from making a return to understanding how to use a feature.

71% of customers expect brands to have conversational bots they can talk to in real-time, but what you say has to be grounded in existing data.

Source: Mobileappdaily

Customer Reward and Recognition Programmes

Building a community around your brand is important, and one way to get ahead is to develop a reward or incentive programme to turn loyal customers into brand advocates.

• Offer incentives for customers to refer friends and family
• Reward loyal customers with exclusive offers, vouchers or unique content
• Incentivise completed surveys, which can be very useful in identifying threats or hidden opportunities
• Offer rewards for milestones moments in the form of points, discounts, or a free product
• Shout out or recognise your valuable customers and loyal advocates

Consider Solutions Like Help Desk & Customer Retention Software

The Salesforce State of Service report shows that 80% of customers say a company’s experience is as important as its products or services.

A good support experience has never been so important, and that’s something Customer Retention Software can help strive towards with capabilities such as:

• Tracking speed and resolution rates when agents engage with customers to get a view of overall Customer Satisfaction (CSAT). This will allow you to monitor retention before it becomes an issue.
• Include a self-service area or knowledge base, reducing the admin burden on team members and freeing them up for complex queries.
• Integrate AI and personalisation. Machine learning algorithms can analyse customer interactions and suggest personalised responses from agents, delivering the wow factor.

Direct CRR Benefits From Deploying Customer Retention Software

• Increased revenue: “The integration and use of helpdesk software has consistently proven to boost our client retention and overall revenue. Specifically, one of our wellness app clients observed a 30% uplift in customer retention and a 25% increase in revenue within six months of implementing a robust helpdesk system.” – Rex Liu, Chief Revenue Officer at GoSite
• Reduced churn: “ Since we implemented our helpdesk system, customer retention has soared. One of our clients, a boutique investment house, was able to cut churn by 20% in the first year.” – Kevin Huffman, Owner of Kriminil Trading
• Enhanced efficiency: Approximately 60% of customer care leaders have reported a growth in total calls and expect to see continued growth (McKinsey & Company). Hhelpdesk Software can limit the impact on support teams.
• Enhanced satisfaction: “Implementing Help Desk Software has led to remarkable outcomes, notably a 30% uplift in revenue and a 40% reduction in customer churn. These results underline the critical role that sophisticated support systems play in not only resolving issues efficiently but also in significantly enhancing customer satisfaction and loyalty.” – Michael Collins, Managing Director, Sphere IT

Common Issues Harming Customer Retention Rates

The most common issues surrounding the ability to retain customers can be split into two categories; marketing and branding, and customer service.

Marketing and Branding

• Un-personalised marketing that doesn’t reflect a customer’s purchase history or unique data
• Lack of community customers may feel they would not be thanked or recognised for sharing positive feedback or making a recommendation
• Lack of rewards with no recognition for a significant spend or many years of loyal custom
• Fragmented communication across too many channels with mixed messages or lack of communication
• No request for feedback, such as not sending surveys may lead customers to mistakenly believe there is no interest in what they think.

Customer Service

• Complex processes to access information, such as an unoptimised site or customer portal
• Unresponsive account management or support or long support resolution times
• Inconsistency in service quality across different touch points or interactions
• Unclear routes to access important information, such as product setup or billing
• Insufficient helpdesk system set-up that may be focused on solving simple questions with no ability to support complex multi-conversation incidents.

How to Benchmark Your Retention Rate Going Forward

There are four important steps to consider when benchmarking your CRRs:

1. Track your retention rate over multiple periods to identify trends, improvements, or declines
2. Segment the audience to spot additional information that may support your theories or identify groups that need more support
3. Interview or survey customers (including lost customers) to gain insights
4. Apply context;. Have there been big issues affecting your industry that could explain a change in retention rates?

But remember, as Dr John Story shares in the TEDXTAMU talk ‘A Search for Loyalty’, “Even a customer who likes a brand that has received the best service, and intends to stay loyal, can be ‘seduced’ and lured by competitors.

“You must focus on building those strong relationships and even better experiences across your business.”

FAQs For Customer Retention Software Buyers

How Much Does Customer Retention Software Cost?

Customer Retention Software prices range between as little as £9.99 per agent per month (like MailChimp) to as much as £3000 per month (Like HubSpot’s Enterprise solution).

But, like Help Desk Software systems, prices vary depending on number of agents using it, business size, flexibility, budget, capabilities, and more.

What Are the Best Available Customer Retention Software Tools?

It’s important to remember that no one solution is the best for everyone. The requirements of customer service managers will vary; what’s best for one service team may not be the best the another.

The most popular Customer Retention Software tools include:

• Salesforce
• HubSpot
• ZenDesk
• FreshWorks
• KissMetrics
• Whatfix

Can Help Desk Software Be Used to Improve Customer Retention Rates?

Yes, and more. In terms of improving customer retention rates, a helpdesk system focuses on ticket management, service analytics, and support tools for all communication channels including social media, email, and live chat (47% of UK customers use five different communication channels)

As well as providing similar features to Customer Retention Software, Help Desk Software tools focus on end-user support as well as customer support.