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Four Winning Strategies for Boosting
Retention and NRR
As organizations plan for next year, economic challenges such as inflation and slower growth remain uncertain due to the impact of the incoming administration and potential trade tariff policies. In response, companies are continuing to shift their focus from customer acquisition to maximizing the value of their existing customer base. With acquisition costs rising and returns steadily declining, improving retention and Lifetime Value (LTV) have become essential strategies for driving sustainable, long-term growth.
To navigate these challenges and unlock the full potential of existing customers, organizations must adopt the right mindset and approach. In this blog, we’ll explore four winning strategies for boosting retention and Net Revenue Retention (NRR)—must-do approaches that forward-thinking companies use to optimize customer revenue and stay ahead of the curve.
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1. Building a Growth-Focused Customer Success Function
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According to Survey Sparrow’s State of Customer Success Report, 37% of companies do not have a clearly defined customer success strategy. This highlights a crucial gap in the customer experience and creates an opportunity for organizations to develop a more intentional approach to customer success, focused on building relationships that facilitate adoption and drive long-term value.
Step 1: Understand Customer Needs and Priorities
The foundation of any effective customer success function starts with a deep understanding of your customers’ needs, goals, and priorities at every stage of their journey. Use tools like informal surveys, quarterly business reviews (QBRs), and direct conversations to gain insights into what matters most to your customers. These interactions provide clarity on how your product or service can best support its objectives and create the foundation for building a growth strategy.
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Step 2: Define Roles and Build the Team
With customer needs and priorities clearly defined, the next step is to establish a dedicated Customer Success Management (CSM) function. This team should be comprised of individuals who not only have a deep understanding of your product but are also aligned with your customer's objectives. The CSM function is responsible for guiding customers through the adoption process, ensuring they reach key milestones, and continually helping them find new ways to engage with and benefit from your offerings.
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The CSM function plays a critical role in customer retention and driving revenue growth by identifying opportunities to expand services within existing accounts. Through proactive upselling, cross-selling, and recommending additional features or solutions, the CSM team can help customers unlock even more value, further solidifying their loyalty and maximizing lifetime value (LTV). By focusing on adoption, retention, and expansion within accounts, the CSM function becomes a key driver of both customer satisfaction and business growth.
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Mid-market SaaS companies should determine the number of customers a CSM can manage by considering a blend of factors, including the complexity of the product, the level of support required by customers, and the desired outcomes for retention and growth. A high-touch model, where CSMs provide personalized support, typically means fewer accounts per CSM (e.g., 10–50), while a tech-touch model focused on automation allows a higher ratio (e.g., 100–300).
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Step 3: Continuously Measure Success and Adapt
Once the CSM team is established, their role should go beyond ensuring product adoption—they must be agile and proactive in responding to evolving customer needs and market dynamics. A key way to measure adoption is through tracking product usage stats, such as daily or monthly active users, feature adoption rates, and usage frequency, which help identify trends in how customers interact with the product.
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In addition to usage data, the CSM team should continuously monitor key performance indicators (KPIs) like customer satisfaction (CSAT), Net Promoter Score (NPS), churn rate, and Lifetime Value (LTV) to identify at-risk customers and evaluate the long-term profitability of accounts. Metrics such as Customer Health Scores, which combine usage, engagement, and support data, and Time to Value (TTV), which measures how quickly customers realize benefits, can also provide valuable insights. These metrics help the team stay alert to emerging issues, uncover opportunities for upsells or cross-sells, and ensure alignment with customer needs, fostering retention and growth.
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A successful adoption-focused customer success function does more than ensure customers are satisfied; it fosters deep, ongoing engagement that drives continuous product use, retention, and expansion, all of which contribute to sustainable, long-term growth.​
Forrester reports a 5% increase in retention rates can lead to a 25% increase in profitability -- and that a well-designed customer success program can yield a 91% ROI in 3 years.
2. Creating a Customer-First Mindset Through Open Communication
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Building meaningful relationships with customers involves fostering open lines of communication about their product experience, and service quality. Implementing feedback mechanisms both within your platform and through external opportunities is essential. Integrating feedback options directly into the product—such as in-app surveys and quick feedback buttons—allows users to share their insights in real time. This creates a seamless channel for gathering valuable data that can inform product enhancements.
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Additionally, establishing opportunities outside the platform, like user focus groups and customer advisory councils, encourages customers to share their experiences in a collaborative environment. These forums not only help gather qualitative insights but also enable customer-facing teams to detect trends in customer needs, such as requests for new functionalities or challenges with existing features. Understanding why customers require specific functionality is crucial for delivering feedback to the product team that addresses broader business needs, not just small issues.
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Ongoing feedback from teams like sales, support, and customer success is essential for bridging the gap between customer experiences and product development. By looking at trends, understanding the reasons behind customer pain points, and relaying this feedback to the product team, you can ensure that the product evolves in ways that meet the real-world demands of your customers. A structured process for integrating this feedback helps drive product improvements that enhance satisfaction, foster loyalty, and build stronger relationships with your brand.
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According to Capgemini, companies with a customer-first mindset experience up to 60% higher revenue growth compared to those who do not prioritize customer needs.
3. Leveraging Tech and AI to Elevate the Customer Experience
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Failing to stay on top of the ever-changing tech landscape can put your organization at risk. By utilizing modern CRMs, advanced customer success platforms, and AI tools, businesses can better understand customer behaviors, preferences, and pain points—enabling them to deliver tailored experiences that foster long-term loyalty and drive growth.
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Customer success platforms, like Gainsight, consolidate and analyze vast amounts of data, giving organizations valuable insights into customer behavior and preferences. This enables businesses to design personalized communication strategies that resonate with different customer segments. For example, if a customer frequently uses certain features, automated systems can proactively send targeted resources or tips, deepening their engagement.
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AI tools further elevate the customer experience by automating routine tasks and generating valuable insights. AI-powered chatbots, for instance, can handle common inquiries 24/7, freeing up human agents to tackle more complex issues. These chatbots learn from customer interactions, improving response times and overall satisfaction. Additionally, AI can analyze real-time customer sentiment, alerting companies to dissatisfaction before issues escalate, allowing for quicker resolutions.
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A great example of how tech can transform customer success is a project we recently worked on with a client. We helped them implement a real-time customer health scorecard, which continuously tracks key engagement metrics like product usage, feature adoption, and sentiment analysis. By pulling data from various systems and touchpoints the scorecard assigns a health score to each customer, helping the client assess the likelihood of renewal or expansion. This proactive approach ensures that at-risk accounts are identified early, allowing the team to intervene before churn occurs.
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SuperOffice research states that only 7% of companies actively track their customer health scores, creating significant risk and potential for negative revenue impact.
4. Educating, Engaging, and Expanding: the Keys to Adoption and Retention
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Customer adoption is the cornerstone of retention and growth. By providing customers with the tools and resources they need to succeed, you enhance their experience and build stronger relationships that lead to long-term loyalty. One effective strategy is hosting regular user group meetings and fostering collaborative online communities. These forums enable customers to share insights, troubleshoot challenges, and learn best practices from peers who understand their needs. Because customers often have unique subject matter expertise, their contributions carry credibility and inspire others to take full advantage of your product.
Additionally, accessible educational content, like step-by-step user guides, in-app tutorials, and instructional videos, empowers customers to get the most out of your product. These resources drive feature adoption and reduce reliance on support teams by equipping customers to resolve common issues independently. For example, at PeopleAdmin, we tailored content to each client’s specific needs, significantly improving adoption rates and reducing support requests. By focusing on these foundational adoption strategies, businesses can create a more engaged, loyal customer base, paving the way for long-term retention and organic growth.
Once a strong adoption foundation is in place, the next step is to drive additional value through upselling and cross-selling. These strategies are essential for growing Net Revenue Retention (NRR) by introducing customers to new features, add-ons, or complementary products that align with their evolving needs. However, success in this area hinges on a seamless collaboration between the customer success (CS) and customer marketing teams.
Customer marketing plays a critical role in building awareness and educating customers about the benefits of new offerings. Through targeted campaigns—like email promotions, webinars, or feature highlights—marketing teams can generate initial interest and nurture leads. But this is only part of the equation. The customer success team must take the baton, incorporating these insights into their regular customer calls and QBRs to have more personalized, value-driven conversations about the new offerings.
For instance, if customer marketing rolls out a campaign about a new analytics dashboard, the CS team should leverage that momentum by discussing how the feature fits into the customer’s goals during their next touchpoint. Together, these teams can craft a cohesive strategy that ensures customers are not only aware of the new opportunities but also understand how they add value to their specific workflows.
When executed collaboratively, these efforts not only increase the adoption of new features but also strengthen customer relationships by reinforcing your brand's commitment to delivering continuous value. This alignment ultimately drives higher retention and accelerates revenue growth.
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​Take the Next Steps to Drive Customer Growth
In today’s economic climate, focusing on customer retention and LTV is the key to resilient growth. Acquiring new customers will always be important, but retaining and growing existing customers is what separates sustainable companies from those struggling to maintain profitability. By investing in long-term relationships, organizations can weather the storm and emerge stronger.
What actions can you take to elevate your customer experience strategy? Prequel Advisory’s comprehensive Customer Experience Assessment helps identify gaps and the most impactful opportunities for rapidly improving retention and Net Revenue Retention (NRR), ensuring your strategies are aligned for long-term success.
Take our Online Assessment or Contact us to schedule a discovery call.
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