

Why Personalization Skyrockets Customer Retention Rates

customer retention rate

There’s no denying that developing customer retention strategies are extremely important for any business. Even knowing that most companies usually focus their efforts on generating new customers. Think about it: Competition today is so fierce that growing your customer retention rates is like winning a lottery. Well, it is if you’re planning to “buy a ticket” and sit tight, waiting for them to fall in love with your company.

Bonus read: AI builds a canvas for customer loyalty

If you want to know the impact of a low customer retention rate, just imagine that you’re filling up a bucket with sand. Each and every grain of sand is a customer. Looks like an easy task, but the thing is this bucket has holes. So now what are your options?

  1. Try to fill up as fast as you can to make up for it.
  2. Examine the holes and tape them shut.

The second option seems like a decent alternative, but the best strategy is to build a bucket with no holes in it.

According to Harvard Business School, increasing customer retention rates by 5% increases profits by up to 95%. Impressive, right? Not to mention that retaining a customer is way cheaper than acquiring a new one. And at the end of the day, this means more revenue for your company.

How can you do that? Well, there are several customer retention tactics you might use, but personalization is one of the best ways to create a connection and grow your customer retention rates.

Data-driven Customer Experience

In a world driven by data, it’s only natural that it’s used to create ever growing personalized content, messages and experiences for all kinds of customers.

Image: Forbes/Oracle Blog

It seems an obvious conclusion, but sometimes it might not be the easiest one. Customers now interact with brands through a higher number of channels, and it takes time and money to create personalized content to every channel and every segment of customers. At this point, a marketing automation platform can be incredibly handy, by its ability to segment customers and send the correct, fully personalized message(s) at the most appropriate time.  

Read on: Personalization vs segmentation: What is better for your business?

5 Personalization Based Customer Retention Tactics To Try

When we talk about personalization, the main concern is the customer experience. The term is here to stay: every customer touchpoint matters, and they’re crucial to build a valuable relationship between a company and a client. Building a great customer relationship will probably help customers enjoy using your product, thus increasing your company’s customer retention rates. 


  • Develop strategies based on Behavioral Analytics

Behavioral data is of the most powerful weapons of the marketing team. It’s really important to collect and analyze your customer’s data in order to create all your customer acquisition and retention strategies.

Through event tracking and real-time analytics, no click, page view or download goes unnoticed. So, when prospects finally turn into customers, your company isn’t just getting a little bit more recurring revenue at the end of the month: they’re getting the chance to build a unique experience for each one of the customers they acquired.

customer retention rates
Image: Gatherspace

The whole customer journey is surrounded by data. Why not use it to increase customer retention rates? After all, with a data-driven strategy, it’s possible to understand what makes them stay longer with the company, tweak the touch points, and resolve bottlenecks in the customer journey that may be responsible for customer churn.


  • Customer journey mapping

Map your customer journey. Know and understand your personas, find out their most common paths in the sales funnel.

A customer journey map focus on telling the users’ whole story, starting from the motivation which led users to find your product and how did they found it; their first contact with it; the purchase moment; the engagement and relationship with your company; the users’ evaluation of your product; feedback; the way users recommend your product; what’s encouraging them to keep using it and paying for your service.

customer retention tactics
Image: Cooldata

More than a way to understand user’s behavior, customer journey maps can be used to find points that need improvement and problems that must be solved. That is why it’s possible to use the mapping to improve your customer retention strategies, identifying on which stages users are more likely to stop using your product and what can be done to retain them.


  • Segmented e-mail campaigns

Email marketing is still a great tool for marketing and sales, and the coolest stuff right now is the possibility to automate your emails campaigns. Why? Because you can hyper-segment and hyper-personalize it.


segmentationOnly when a customer has visited your website enough times.

And clearly this one strategy that really helps retention. Not all customers are the same: they are definitely not in the same point of the sales cycle, and they have different reactions to different approaches. That’s why it’s important to be ready to approach different segments of customers with different messages.

Of course, there are endless possibilities and ways of segmenting your lists and you might need a good tool to that. And this customer data goes beyond demographics, for instance, their interaction with your platform, which feature they’re using the most and/or the ones they’re not really taking advantage of.



  • Behavior-based content delivery with marketing automation

Any marketing professional must have in mind they’re dealing with individuals, and every customer wants to be treated specially. They need to know that your company understands their pain and needs, and it’s working to properly help them.

Take time to exhaustively analyze your data. Know your customers, their background, common behaviors, necessities and desires. With right data in hands – and of course, a marketing automation software – you can build automation flows for different segments and different actions. This way you can deliver customized content.

customer retention tactics
Image: Folio Mag

For example, let’s say that you have customers that purchased the basic plan of your product, but are constantly downloading rich content like ebooks and webinars, and every now and then, checking your pricing page. It might be the case that these customers are considering a business plan.

A good strategy would be adding them to a upsell flow, so they can find out the benefits of the higher plan for their company. At the end of the automation flow, they would receive an offer, with a special “loyal customer” discount, for that specific plan. That might be the most personal way to grow your customer retention rates. 

  • In-app messages and live chat


There are some tools that can help you to increase your retention and engagement rates by promoting an 1:1 communication with the customer. In-app messages and live chat are some examples.

The biggest benefit of live conversations is the possibility of offering help and guidance in the moment the customer needs it. Although it’s a powerful way to nurture and convert leads, emails lack the “real-time” factor, and some customers prefer a more timely communication with a company. The best strategy is to grow customer retention rates is to combine different engagement and retention tactics, such as emails and in-app notifications.

nps-survey-in-app-message-example-1-205x400NPS Survey/DeLoca

Since in-app messages and notifications can be personalized as you wish and because they’re hyper-segmented, there’s a better chance of impacting the right customers and users with the message.

It’s important to keep all the open conversations between customer and company together in one place, where it can be used by the marketing and customer success teams to follow the effectivity of the strategies.

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