As a recession looms, retention of customers is even more important than acquisition. To succeed in today’s market, vendors need to hold on to customers by ensuring that they are happy. In the words of our Founder and CEO Vinay Bhagat, “In times of economic uncertainty, customer retention and expansion becomes more important than new logo acquisition. Ensuring that the customer experience is delightful is critical to drive customer loyalty, insulating businesses from losses and creating stability that could be the difference between surviving or thriving in a bear market.”

Why customer retention matters

According to Totango, “While acquiring customers is a necessary expense, it tends to cost three to six times more than retaining customers. This makes it much more cost-efficient to prioritize customer retention than to focus on acquisition at the expense of high attrition.”

But, how does this work, in numbers? Shopify put together a simple illustration to show the impact of selling a $10 a month product to existing customers. They compare a 5% retention rate to a 10% one.

As we can see, the impact of just a 10% retention rate is huge. And it’s hard to beat with any type of acquisition efforts! 

Customer experience as an emerging trend

There’s a lot of evidence that today’s companies are really honing in on strategies to elevate and listen to their customers. We especially see this in the growth of the Customer Experience (CX) discipline. 46% of companies in a SuperOffice survey said that CX is their top priority for the next five years—prioritizing it over pricing or product growth! 

But what is customer experience? In a nutshell, it means looking at the end-to-end experience that your customers have with your brand, and working to improve it. It’s often up to the Customer Success team to improve CX. In a recent TrustRadius Trust Talks, Nick Mehta, CMO of Gainsight, stated “The best way to activate customer insights across an organization is to appoint someone to do it.” In an ideal situation, organizations would hire a customer experience (CX) point person and that role would report to a chief customer officer (CCO). CCOs are usually over the customer success management, support, professional services, training, and operations teams.

CX teams mainly focus on improving how the business listens to their customers’ needs, then makes changes to align with these needs. Their main goal is to optimize the customer journey. CX performance is measured with stats like Net Promoter Score (how likely customers will share their experiences with others) and Customer Satisfaction (how satisfied customer are with the brands’ services, based on survey results). On rare occasion, companies like DataStax will use systems like call logging and gamification as a gauge customer satisfaction (CSAT).

When a company focuses on the customer experience, it can make a huge impact on its revenue, growth, and profitability. Here’s the proof:

• • 89% of companies that lead with customer experience perform financially better than their competitors. (Qualtrics)
  • 91% of consumers are more likely to make a repeat purchase after a positive experience. (Salesforce)
  • 78% of customers say they are loyal to brands that understand them and what they want to achieve. (Acquia)
  • B2B and B2C companies that implement innovative CX strategies are 3 times more likely to substantially outperform their business goals. (Adobe)

TrustRadius’ data on customer-focused efforts

We ran a report of buyer traffic to all 789 software categories on the TrustRadius website, and the data bears out this huge shift to customer-focused efforts. Customer experience, along with customer analytics and ecommerce personalization, are all taking center stage. And as we’ve seen, these surging software categories are a sign of the times.

The following customer experience software categories saw the biggest growth, both in terms of TrustRadius’ site traffic and Google Trends data, year-over-year. The same is true for surging products.