7 min read
Christine Carzo - Sep 7, 2017

3 Strategies to Increase Customer Retention Rate Using Social Intelligence

In the eternal quest for revenue and growth, it’s easy for companies to overlook the opportunity available in simply improving customer retention. The average business churns about 20% of its customers every year. In some industries, it’s closer to 80%. Churn at these rates is a significant drain on any business, but few seem willing to invest the necessary resources into correcting the problem.

Historically, marketing teams have used their resources to acquire new customers. Conventional wisdom holds that if the company can reach more people, they can sell more. The reality is that customer retention is a faster and more efficient route to customer acquisition. The proof is in the numbers:

  • According to Gartner, 80% of a company's future earnings will come from 20% of existing customers.
  • Marketing Metrics reports that the probability of selling to an existing customer is between 60–70%, compared to 5–20% for new prospects.

In other words, it’s always easier to sell to a party with whom you already have a relationship. Plus, retained customers don’t just spend money with you for longer; the profitability of a retained relationship actually increases with time. Attempting to drive customer retention is a very worthwhile endeavor for any company.

A definition of customer retention

“Customer retention” refers to the actions that companies take to minimize the loss of existing business. These efforts often manifest as loyalty and incentive programs offered to legacy customers. Maintaining a relationship towards the end of a life cycle is important, but it’s essential to remember that retention begins with the customer’s first contact with the company.

How to measure customer retention

Companies can calculate their retention rate using a simple formula:

(CE-CN) / CS = Retention rate

  • CE = number of clients at the end of the period
  • CN = number of new clients acquired during the period
  • CS = number of clients at the beginning of the period.

Let’s see this formula in action. Suppose a company has 200 clients. Over the course of a given period, they lose 20 clients but acquire 40, resulting in 220 clients. Their retention rate can be found by calculating:

(220-40) / 200 = 0.9

The retention rate for the given period is 90%.

This is an important metric to track for any company that wants to improve their revenue over time. Additional key concepts related to customer retention include:

  • Cost to retain customers. It refers to the expense of the products or services of a company.
  • Risk of abandonment. The best way to retain customers is to identify the reasons they might want to leave.
  • Value of customers. Because you have limited budget, it’s important to choose which customers to prioritize in your retention efforts.

Keep an eye on Customer Retention Cost, too:

Customer Retention Cost = Amount spent on retention efforts / Number of customers retained

Use social media monitoring to unlock your customer's opinion with this free template.

How to increase customer retention

Regardless of how you measure it, the most important tactic in customer retention is keeping customers happy. To do that, you need to understand your customers’ behavior, tastes, and concerns. That way, you’ll be able to create messages and products that fit their needs.

Social media-driven analysis provides these insights and allows you to put your customers’ needs at the center of your customer retention strategy. Here are some of the strategies that will help you keep your customer base loyal:

Listen to feedback in social media

Actively monitoring comments about your brand's products and services allows you to understand what customers expect from them.

Consumer feedback is essential to understanding the audience. The information you’ll gather will serve to segment the public and offer different customers a more tailored experience.


  • Monitor online reviews and conversations
  • Analyze the sentiments of the mentions
  • Create alerts and reports to know when there are peaks in mentions of your brand

Case study

A large chain of Spanish hotels wanted to find ways to improve customer service. Through social media monitoring, they were able to detect key behavioral trends among their audience, one of which came as a particular surprise: the food. They had no idea how important the quality and even appearance of their food was to the customer experience. After seeing a stream of Instagram posts reporting on the food in the hotels, the brand created an innovative new gastronomic offer, adapted to their different customers. The food has since earned recognition throughout the industry, and among the customers.

Build a community

A customer community creates an organic venue where your clientele can share tips and success stories with one another. Building a community also allows you to become part of the after-sales conversation in a forum different from the customer service environment. These communities can be created by brands either in groups on social networks, or through their own channels such as forums.


  • Identify the online channels where conversations naturally occur
  • Use classification tags to detect relevant topics and subtopics
  • Identify the most active users in each community
  • Measure the degree of influence and interaction the most active clients have

Case study

A telecommunications company in France is trying to improve customer service in key stages of the customer journey—subscription, cancellation, change of offer, etc. The company uses social listening to standardize social networks and forums of its own, and understand how its competitors perform on consumer issues. The company is able to easily capture relevant insights through the rigorous management of classification tags. By understanding the main concerns of their clients, the company improved their services and prevented possible problems.

Improve customer experience

Customer experience plays an important role in repeat buying and customer retention rates. Some research suggests 68% of clients leave because of poor service and poor customer relations.

There are two ways to improve customer experience and overall customer satisfaction that will encourage repeat purchases and brand loyalty.

The first takes into account the feedback received from existing customers (as mentioned above) and puts it into action. To do this, support teams must be accessible and well informed so they can be agile in solving problems and providing the correct information. If you want to improve the retention rate of customers, they should be able to contact you easily. Customers value fast and convenient support.

Next, try to build specific parts of your business that affect customer retention, such as a customer loyalty program.

The goal is to provide extra benefits to customers who have been faithful for an extended period of time, recognize them, and compensate them for it. A loyalty program can inspire repeat buying by keeping your customers feeling appreciated.


  • Identify the main drivers of satisfaction and dissatisfaction and analyze the most talked-about mentions and topics.
  • Analyze the sentiment of the mentions (positive, negative, or neutral) in real time to improve the average response time.
  • Create personalized alerts and assign mentions to keep the relevant teams informed.

Case study

An insurance company wants to strengthen its relationship with its customers, so it has decided to support customer service with a tool that detects consumer complaints and criticisms. They use social listening to analyze the tone of the mentions in real time, then transmit this information to the corresponding department to help inform the best solutions to present to clients.


Attracting new customers is much harder than maintaining existing ones. In this article, we have taken a look at a few strategies you can incorporate if you want to keep your current customers happy and willing to make new purchases.

Remember that social listening can help you identify what customers expect from your business, and even why some of your old and loyal customers are no longer with you. Intelligently applying information collected from active social listening will help you keep customers for life.

Follow these tips and use them to improve customer retention rates in your business. If you do, there’s a good chance you’ll see some positive results: enhanced brand loyalty, more word of mouth advertising, and better customer relations.

Does your business use an effective customer retention strategy? Let us know what you’ve found!

Use social media monitoring to unlock your customer's opinion with this free template.

Written by Christine Carzo

Christine is the US Marketing Director at Digimind. She interested in writing and talking about all things related to Marketing and business strategy, especially finding ways to help businesses grow faster and become more intelligent.