a call center agent speaking to a customer to improve customer retention rates

5 Ways a Contact Center Can Help Improve Customer Retention

red vector stroke

Many companies focus primarily on customer acquisition, sometimes at the cost of customer retention. After all, the more customers, the better, right? 


This idea is supported by a number of false premises, such as: 

  • customer retention will take care of itself
  • once customers come to my business, they won’t bother looking elsewhere 
  • customer retention isn’t as essential as customer acquisition 

In reality, customer retention requires concentrated effort, since customers typically have no problem switching brands if things don’t meet their expectations. For example, recent data shows that 92% of customers will switch companies after just three—or fewer—bad experiences. And with high customer expectations, satisfying and retaining customers requires a focused strategy. 

Customer retention also has a wide-reaching impact on basically every area of your business. For example, improved customer retention is correlated with: 

  • increased repeat purchases and purchase value, which leads to higher CLV 
  • increased word-of-mouth marketing
  • reduced CAC costs through stronger brand loyalty and word-of-mouth marketing 
  • higher revenues and faster company growth 

In fact, Bain & Co. found that most e-commerce businesses won’t break even if they don’t retain customers—CAC are typically so high that one-time purchases aren’t valuable enough for brands. As a result, customer retention is not only valuable, it’s actually essential for the long-term success and survival of your business. 

So how do you improve your customer retention rate? In this article, we’ll share five tactics we’ve seen work time and time again in our decades of customer service and experience. 

How to Calculate Your Customer Retention Rate

First, start with the obvious: to implement effective strategies, you have to understand where you are. 

So, how do you calculate customer retention rate? 

The simplest customer retention rate formula is: 

((CE – CN) / CB)) x 100

Let’s break that down: 

To calculate retention rate, you’ll need to pick a set period of time to measure, usually monthly, quarterly or annually. 

CE: refers to the total number of customers at the end of the period 

CN: refers to the total number of new customers gained during that period 

CB: refers to the total number of customers at the beginning of the period

So to find your retention rate, you subtract the number of new customers gained from the total number of customers at the end of the period, and then divide that number from the number of the customers at the beginning. By doing so, you can figure out the percentage of customers that were retained (but not new) over the course of a certain amount of time. 

Once you understand your current retention rate, you can implement specific strategies to grow that retention rate over time. Calculating your CRR regularly is key to identifying trends and patterns in why customers churn. If you only calculate your CRR sporadically, you won’t be able to clearly identify problematic trends in retention. 

Strategies To Improve Your Customer Retention Rate

Customer retention goes beyond just having a great product or a good experience—it’s a holistic strategy that requires you to offer positive experiences at every touchpoint. These five tried-and-true tactics are ones that we’ve used effectively to improve customer retention from first touch to post-purchase, customer service calls, marketing communications and more. Try stealing them for your own strategy!

Providing Exceptional Customer Service

Without a doubt, providing exceptional customer service is the foundation of any great customer retention strategy. Far too many brands focus on modernizing or introducing new technology to their customer service process without nailing the key elements. 

And what are the key elements? According to a customer survey by PwC, 80% of customers say that speed, convenience, knowledgeable support and friendly agents are the most essential factors in a good customer service experience. Of course, modern technology and solutions can help companies achieve these results—but focusing on expansion or technology at the expense of key fundamentals will backfire. Three ways to provide excellent customer service that nails the essentials: 

Ready to perfect your CX?

Save money and increase sales with a brand-obsessed, people-first team that delivers a high-touch, superior customer experience, every time.

Prioritize personalized and empathetic interactions. Customers don’t just want an answer—they want answers that are relevant and specific to their individual situations, and they want to be treated as individuals, not just another number in your queue. Prioritizing personalization—through loyalty programs, modernized CRMs, improved data analysis and customer segmentation and more—creates experiences that customers will remember. And providing individualized support through friendly, empathetic agents creates connections between your brand and your customers that drive loyalty, retention and customer satisfaction.

Resolve customer issues and complaints efficiently. Speed and convenience are two essential elements of satisfying customer service—and it makes sense that today’s customers expect their issues to be resolved promptly, easily and completely. Empowering your agents with clear policies, shared knowledge bases, and effective and ongoing training can help ensure customer issues get resolved swiftly.

Go above and beyond. As customer expectations rise, the companies who can meet them—and exceed them—will stand out from the crowd. In a world of Apples and Amazons, businesses can’t expect to scrape by on bare-minimum service. Chewy is a brand that does this well. If they find out that a customer has lost a pet through their customer service team, for example, they’re known for sending flowers, cards or other small gifts in the mail after the call—now that’s service! Doing so has garnered them a reputation for exceptional service, growing their brand and customer loyalty.

Building Strong Customer Relationships

In order for customers to come back to your brand again and again, they need to feel connected to your brand in some way—to believe that your brand knows them, cares about them, and understands them and their needs. 54% of consumers—and 67% of B2B buyers—expect companies to know, anticipate and cater to their needs. How do you do this?

Establish trust and credibility with customers. While 87% of business executives believe consumers have a high level of trust in their company, fewer than 30% of consumers say they do—a trust gap that must be overcome if you want to build a strong customer relationship. Establishing trust among customers can be as simple as doing what you’ll say you will and creating a reliable product or service, or more complex, such as establishing your company as a leader in the industry. Either way, each customer service interaction is an opportunity to establish trust—by listening carefully to the issue, showing empathy and support, and providing a solution that you can follow through on.

Communicate proactively and follow-up. Relationships go both ways—and relationships with customers are no different. If you’re only ever communicating with customers when they reach out with a problem, your customer relationships will be weak. On the other hand, if you proactively reach out to support customers, help ensure their success with your product or services, and follow-up after service requests or support calls to ensure that everything has been resolved completely, you’ll gain your customers trust.

Be a reliable and accessible business. If you want to develop strong relationships with customers, establish reliable and accessible points of contact. Customers want to be able to communicate with brands on channels they already know and use regularly—but more important that channel itself is the ability to easily and quickly get in touch with someone through a known channel. Pick customer service channels that will be easy and convenient for your customers, whether that’s phone, email, live chat, social media or a combination. When customers can’t get an answer quickly for their problems, they’ll turn to another company to meet their needs in the future.

Leveraging Customer Insights and Feedback to Improve Customer Retention

Customer feedback is one of the most underrated ways to improve customer retention—after all, listening to what your customers say they want (and implementing it!) is crucial to creating experiences that keep customers coming back.

In addition, when customers feel that their voices and feedback is being heard and implemented, you’ll gain a stronger reputation as a company who knows, cares about and caters to their customers—further increasing customer trust and retention. It’s a win-win loop.

Start leveraging customer insights by simply gathering and analyzing customer data and feedback. There are many varieties and options for customer feedback, including CSAT surveys, NPS scores, online reviews, social media comments, direct feedback, customer surveys and more. Ideally, you should gather a mix of quantitative data (like CSAT) and qualitative data (like online reviews) for both data you can analyze as well as deeper insights into customer preferences and needs.

From here, you can identify customer needs and preferences. From the data you’ve gathered, you can better segment your customers and provide more tailored experiences and increased personalization. With 48% of consumers saying personalized experiences are more likely to make them a repeat customer, accurately identifying and segmenting customers based on needs and preferences is critical to creating relevant personalized experiences that improve retention.

Personalization doesn’t just benefit the customer, either—according to McKinsey, fast-growing companies tend to “drive 40% more of their revenue from personalization” compared to slower-growing brands. By personalizing your services and solutions to meet customer expectations, you can create increased retention, improved customer trust, faster growth and increased revenue.

Conducting Retention-Oriented Activities

Foundational elements such as great customer service, personalization and customer data are crucial to set the stage for customer retention, but at some point, you’ll need to introduce specific retention-oriented tactics.

For example, you might want to consider implementing customer loyalty programs or rewards. It makes sense that rewarding customer loyalty would in turn improve that loyalty—but many companies underestimate just how much loyalty programs can drive retention. Take a look at some of the recent data:

Far from being oversaturated with loyalty programs, American consumers want to join loyalty programs and will optimize—and increase—their spend and loyalty to companies who offer them. And with so many types of loyalty programs to choose from—points-based, tiers-based, paid, free—there’s definitely a format that will meet your customer expectations and business needs.

Offering exclusive benefits and special promotions to loyal customers—or not-yet-loyal customers—can also be a way to increase retention. In short, this can be seen as a type of ad-hoc loyalty program: by treating your customers like a special audience, they will typically respond in kind. These can be segmented to be more relevant to consumers, to “win over” a particular group, or sent to your entire audience to boost engagement and retention.

Continuously Improving Customer Experience

Finally, making customer retention an ongoing and continuous process will ensure that you continue to maintain and upgrade your customer experiences, and adapt your retention strategies accordingly to suit changing customer preferences.

Monitoring KPIs (Key Performance Indicators) and other customer satisfaction metrics on an ongoing basis is an effective way to continuously improve the customer experience and support retention.

Key metrics to track for retention include:

  • Repeat Customer Rate (what percentage of customers make more than one purchase)
  • CSAT (Customer Satisfaction)
  • NPS (Net Promoter Score, how likely customers are to promote your brand)
  • Purchase Frequency
  • CLV (Customer Lifetime Value)
  • Churn Rate or Retention Rate (percentage of customers that churn or are retained in a specific period of time)

As you monitor your progress and metrics, implement customer-centric process improvements. These process improvements could be related to your call center scripts, the channels you use, your policies, the metrics you track, your loyalty program and more. The key is keeping the customer—and their needs and preferences—at the center of decisions you make about the customer experience.

As you improve your processes, don’t forget to simultaneously empower your agents and staff to improve! 62% of customer service agents say that more “skills-based training” would improve their performance—yet many companies don’t offer ongoing training. Providing ongoing, effective training to help agents excel in their customer interactions allows your team to ensure you’re providing the strongest support possible for your customers.

Does Outsourcing Help or Hurt Customer Retention?

You get it, customer retention is essential, and there are plenty of effective tactics and strategies that can help improve your retention rate. But with so many other elements of customer service—and running a business—to focus on, how do you actually implement many of these techniques?

Outsourcing can support customer retention and loyalty efforts tremendously, whether or not you outsource your customer service. While some brands believe that outsourcing customer service will decrease customer retention, proven and reliable outsourcing partners can support customer satisfaction, retention, loyalty and more through exceptional customer service and experiences.

A good outsourcing partner, like Global Response, offers customer retention support through:

Through dedicated resources and teams focused on customer-centric service and retention support, you can improve your customer retention for both the short- and long-term.

To see how Global Response can help support your brand’s customer retention efforts, reach out to an expert from our team today!

Stay in touch!

Subscribe to receive industry insights and trends.

Subscribe to receive industry insights and trends. You’ll learn more about how the best customer experience solutions can change the game for your brand.