12 Strategies To Retain Users And Reduce Churn

Ever wondered why you lose customers even after investing in improving product quality and better deals? The reason for user churn could be a lack of personalization, improper customer service, or a complex shopping experience.

One bad customer experience can cost 50 percent of your consumers, while two bad experiences increase the number to 80 percent. That raises the question—what could be that bad experience my customer is facing? Well, you should ask your customers to know what's falling short.

Quest Labs explains how businesses can understand their customers better through essential membership retention strategies.

Importance of Retention and Renewals for Business Growth

Retaining members and encouraging customers to renew their subscriptions are essential aspects of any business's growth. It’s easier for companies to sell their products to their existing customers than to acquire new customers, and this cuts down on member acquisition costs.

To better understand the importance of customer retention, let’s explore what membership retention and renewal exactly are.

What Is Membership Retention And Renewal?

Membership retention is the ability of a business to engage its customers and keep them active. Companies must invest heavily in maintaining their relationship with consumers and encouraging them to continue using the services and remain loyal.

Membership renewal occurs when an existing customer extends their subscription or membership for an additional period. It maintains a steady flow of income and helps with resource allocation and strategic decision-making.

This raises the question of how to improve customer retention.

Focusing on retaining customers through better CX results in an 84 percent revenue increase, 92 percent improvement in customer loyalty, and a 79 percent cost savings. Now, let's explore why membership retention and renewal should be a business's top priority and some membership retention ideas.

How to Increase Membership Retention: 12 Essential Strategies

Retaining customers and encouraging them to renew subscriptions are crucial goals in any customer relationship management strategy. What is common in the customer retention plan that leading companies adopt? How exceptional are their client retention strategies?

Here’s a compilation of 12 outstanding tips to build a winning customer retention program.

1. Optimize User Onboarding

Optimizing an app's onboarding can contribute to building long-term relationships with users. It’s essential to personalize the user experience from onboarding. This personalized experience encourages users to continue their membership and renew their subscriptions.

Here’s how optimizing onboarding is essential in subscription retention strategies.

• Onboarding Quiz:

  With a quiz that asks only the essential information, businesses can direct users to features that match their preferences and industries. It also collects data on user preferences to improve their product experience.

• In-App Guides:

  Businesses can simplify navigation through' popup guides' to ensure that users connect to the right features. Users can also invoke these guides at their convenience. These guides engage users and improve the value perception of a product.

• Embedded Tooltips:

  Tooltips help users learn the flow of work, reduce confusion, and offer support to new customers. Therefore, users can uncover additional functionality at their own pace.

Here are some popular apps that take user onboarding to the next level.

2. AI-Powered User Segmentation

AI-powered segmentation is superior to traditional segmentation as it analyzes vast user data. It identifies patterns that conventional methods miss, leading to more precise user segments. Therefore, businesses can optimize their membership retention plan perfectly.

Here’s why user segmentation is one of the vital customer retention solutions.

• Direct Users to the Right Features:

  AI segmentation identifies the features of a product that are more relevant to different user segments. This helps direct them to these features, making the app more valuable to each member.

• Maximize User Engagement:

  By placing users in the right segment, businesses can ensure that they receive relevant content, offers, and communication. Users find more value in the interactions and offerings made especially for them.

• Membership Renewal:

  AI-powered segmentation forms a solid pillar for building customer satisfaction and loyalty. As a result, more members will likely renew their membership after the tenure.

3. Personalize Customer Journey

A global survey in 2023 reports that 80 percent of businesses say that personalized experiences increase customer spending. Also, 62% of participants say that personalization significantly impacts customer retention. Therefore, personalizing the customer journey is a membership retention strategy that is never overrated.

• Personalized Recommendation:

  Popular platforms like Netflix deliver and recommend content based on each member's preferences. This personalization satisfies the customers and encourages them to renew their membership.

• Improves User Experience:

  Personalization helps reduce the complexity of any product or service. Users can easily access relevant features, settings, and navigation options, which improves user experience and engagement and makes them less likely to churn.

• Personalized Communication:

  Businesses can ensure personalized communication through push notifications and in-app messages. It makes communication more meaningful and builds a strong bond between the business and the member.

4. Collect And Act On User Feedback

It's essential for businesses to listen to users to find the exact reason for them not renewing their membership. Top companies ensure this timely conversation with users does not interrupt their flow.

• Structured Feedback Collection:

  Inline feedback prompts help businesses understand users' sentiments at critical points. These prompts also help companies to understand the features users are unhappy about and optimize them accordingly.

• User-Suggested Features:

  If businesses find coming up with a solution challenging, they can encourage users to suggest a feature that would improve their experience. Companies should let consumers see their favorite ideas come to life and build trust.

• Develop Actionable Outcomes:

  Top brands collect user feedback and tags and systematically track them. They address every user suggestion to commit to action and build user trust.

• Closing User Suggestion Loops:

  After resolving feedback loops, closing them is essential. Users who see their suggestions are valued are more likely to renew their membership.

5. Gamification To Engage Users

Gamification introduces challenges, leaderboards, and exclusive rewards to engage users and encourage them to renew their membership.

• Build a Sense of Achievement:

  Leaderboards and streaks build a sense of accomplishment and progress that boosts customer loyalty and retention.They also encourage users to continue their membership to keep their progress.

• Motivation Through Rewards:

  Quest offers personalized rewards to users for accomplishing certain milestones. It encourages them to look forward to achieving new benefits, thereby retaining customers.

• Behavioral Insights:

  Gamified engagement is also an effective tool for collecting user data, which can help improve membership retention strategies.

Here’s a list of this year's best mobile app gamification examples.

6. Tiered Membership Strategy

Businesses can introduce various subscription packages for different features and user segments. This means that users don't have to pay for features that they are less likely to engage with. This approach motivates users to subscribe and renew their subscriptions over time.

Here’s why tiered membership renewal strategies help with customer retention management.

• Customized Value:

  Users can choose membership plans that align with their needs and preferences. This helps them receive value for their money and makes them more likely to renew.

• Flexibility:

  Businesses can offer customers the flexibility to adjust subscriptions based on needs. This improves the likelihood of users renewing their memberships.

• The Incentive to Upgrade:

  When users in the lower tiers see the benefits of higher tires are better, they often aspire to move to higher tiers. Higher tiers also create a sense of exclusivity with exclusive features and promote retention.

7. Personalized Rewards And Offers

Businesses are extensively offering personalized rewards to their customers. They realize that the approach improves customer satisfaction and loyalty. Here's how exceptional businesses provide personalized rewards to customers.

• Behavioral Analysis:

  AI analyzes user behavior patterns and the features they frequently engage with to understand their preferences.

• Purchase History:

  Customers are more likely to appreciate businesses that offer personalized rewards that align with their past purchases.

• Feedback and Surveys: :

  Marketers collect users' opinions about reward preferences through non-interrupting feedback prompts.

• Predictive Analytics:

  AI helps businesses anticipate future user preferences based on their past behavior. It allows companies to offer rewards that improve membership renewal rates.

8. Regular Communication And Assistance

Consistent communication with users helps build a strong relationship and a sense of community. By building customer trust, businesses can encourage them to renew their membership. It is also an effective medium to introduce new features to customers.

By constantly communicating with them, businesses can identify and address issues promptly. Regular user feedback also helps to optimize membership retention strategies.

9. Collect Exit Surveys

Businesses conduct exit surveys when users decide to discontinue their membership. These surveys help determine the pain points and areas for improvement to prevent further user exits.

• Understand User Expectations:

  Exit surveys help businesses understand users' expectations about features and the scope of improvement. Thus, companies can optimize the features and retain existing members.

• Reengage Lost Members:

  Businesses can encourage users to renew subscriptions by fixing issues causing membership cancellations.

• Improving Customer Experience:

  The data obtained from exit surveys helps improve the user experience of existing customers.

10. Conduct Events To Retain Members

Businesses can engage customers by conducting sales and offering them exclusive rewards. These events attract members' interests, increase user engagement, and build excitement.

Also, giving them personalized rewards motivates them to renew their subscription. Quest Labs improves the efficiency of flash sales, loyalty programs, upsell campaigns, and subscription renewal campaigns.

11. Timely Renewal Reminders

Timely renewals significantly impact users' motivation to renew subscriptions. Businesses can use in-app notifications to remind users of upcoming renewals without being too intrusive. Through push notifications, businesses can effectively convey incentives like an early renewal discount to encourage them to renew their subscriptions.

12. Introduce A Referral Program

A referral program rewards existing users for sharing the word about your product with friends and converting them into subscribers. Users who participate in referral programs become more invested in the community. As a result, they become loyal customers who are more likely to renew their subscriptions.

Member Retention & Renewal Challenges

Have you ever wondered why your customer retention tactics don't work as expected? With changing customer expectations, maintaining customer retention and loyalty has become more challenging than ever. However, all you might miss is collaborating with the right customer retention platform like Quest Labs.

Let's explore the common membership retention challenges and Quest's best customer retention solution for each concern.

Engaging Members

If you look at the outstanding customer retention examples, you can understand how they excel at engaging their customers. However, for most businesses, engaging customers is a significant hurdle.

So, how can businesses engage their customers and improve the client retention rate?

Solution: Gamification

Quest Labs presents gamified engagement as a powerful tool to improve customer engagement. Introduce rewards, leaderboards, and challenges into the user experience. By creating a sense of competition among the customers, gamification is one of the outstanding customer retention tools.

Changing User Expectations

Users' expectations are continuously evolving. What works today might not be as effective tomorrow. Therefore, it's essential for businesses to understand their customers' preferences and habits to build a winning customer retention model.

Solution: AI User Segmentation

Quest Labs helps you segment your users based on their behavior and preferences. This enables you to take them to the right features and offer them the right rewards for engagement. AI user segmentation is undoubtedly one of the best strategies for customer retention.

Offering Personalization

Many businesses lack the right tools and workforce to implement personalization strategies. Without personalization, it is hard to engage members, and it leads to user churn.

Solution: Generative Personalization

Quest Labs simplifies personalization through simple solutions. It helps you offer the right product and content recommendations to all your customers. Therefore, Quest's personalization is a valuable addition to customer loyalty strategies.

Retain All Your Members With Quest Labs

We have discussed twelve easy ways to increase membership retention with Quest Labs. Quest Labs understands that membership retention is crucial for businesses and creates a unique membership renewal strategy based on their needs. We help you understand your customers' preferences right from onboarding so they perceive the real value of your product early on.

Converting free trial users into subscribers is a huge milestone for businesses. However, creating winning membership retention strategies to engage users throughout the journey is a bigger milestone to achieve.

With Quest Labs, you can be assured that the users are engaged with your product and understand your service's true essence. By knowing their preferences and directing them to the right features, retaining members becomes a walk on the clouds. Integrating Quest's elements into your existing systems is seamless and takes just minutes to launch them.

So, schedule a demo and discuss how we can help you retain all your members.

Frequently Asked Questions

1. How do we increase the retention rate in apps?

Businesses can increase app retention by improving user engagement through personalization and gamification. Quest Labs has in-stock game-changing tips for companies to retain customers.

2. What drives app retention?

Businesses should focus on personalizing user experiences to maximize in-app retention. Constant customer support is also important to prevent user churn.

3. What is a reasonable churn rate for a mobile app?

An app's annual churn rate should be between 4 and 7 percent.

4. Which two ways can customer service and support affect sales?

With excellent customer service and support, businesses can increase customer satisfaction and retain them. At the same time, poor customer service can cost them loyal customers and increase the churn rate.

5. Why is customer retention important?

Retention of customers is important as it is more cost-effective than acquiring new customers. Moreover, existing customers are likely to spend more over time.

6. How to increase user retention?

Here are some of the best customer retention ideas you can adopt.

• Personalizing user experiences
• AI user segmentation
• Gamification to engage customers
• Gather user feedback for customer retention analysis

7. What is a good customer retention rate?

The average customer retention rate varies for industries as follows.

8. Which practice helps a company retain customers?

Implementing a customer loyalty program helps retain customers by rewarding them for engaging.

9. What formula is used to determine a company's customer retention rate?

Customer Retention Rate, CRR=((E-N)/S)*100,

Here, E is the number of customers at the end of a specific period

N = the number of new customers acquired during the same period

S = the number of customers at the start of the period

10. What is customer retention rate?

Customer retention rate is the percentage of customers who continue to do business with a company over a specific period. It reflects the company’s ability to maintain customer loyalty retention.