Who’s in Charge of Retention?

September 21, 2020

In 2018, the Marketing Budgets Report by Econsultancy revealed a bias by companies toward acquisition marketing. This bias comes at the expense of customer retention.


What does this statement mean? Many organizations actively place much emphasis and spend a lot of  money on customer acquisition programs. Unfortunately, these organizations are not paying equal attention to customer retention initiatives.Without knowing it, these companies are standing in the way of their very own growth. According to collaborative research published in the Harvard Business Review, here are some facts about retention:



  • A 10% increase in retention can grow your company's value by 30%.

  • It is 7 times more expensive to acquire a customer than it is to retain one.

  • A 5% increase in retention rates can lead to a 25% to 90% increase in profit.


SaaS businesses do a better job prioritizing retention than other company models. When you charge for your services every month, it is easy to appreciate the value of retention. SaaS companies take retention more seriously than other business models. However, they make one mistake: failing to know who's in charge of retention. Below are some common assumptions in the industry:



  • "Because other businesses do it this way, so-and-so is responsible for customer retention."

  • "We are all in charge of customer retention. We need to do a great job."

  • "If we do a great job, no one has to worry about customer retention."


From the statements above, it's easy to come to one conclusion: no one worries about customer retention.


Understanding Customer Retention


What is Retention?


Retention is the measurement of customers who either utilize or return to your service. Simply put, it refers to a company's ability to keep users over a certain time. High retention means that users stick with the software, and whereas, low retention can be explained as customers who stray away from the service. For example, social media companies can measure how many users they retain daily. This number can and will fluctuate. It is possible to increase both retention and your ability to keep users. To attain this goal, you need to assign someone in your organization to be responsible for customer retention.


The Importance of Retention and Formulating a Strategy


Being able to retain customers affirms the value of your company. Remember, a company with that is valuable, attracts more users, and will keep them longer. Maintaining a relationship with your users reduces churn. This bond also provides the infrastructure to retain more customers. But, why should you retain customers? According to Small Business Trends, it was reported that "65 percent of a company's business comes from existing customers." Retaining more customers will boost your bottom line. The longer users utilize your software, the more revenue they bring, and the more users you attract, the more revenue you will make. When customers trust you with their money, your company's value grows.


So, Who's in Charge of Retention?


Customer retention is a critical part of running any business. Your company should never ignore retention. High retention is what you should be after, and customer retention is optimized when the responsibility of retention is assigned to someone in your organization. When most companies start, the responsibility of customer retention typically falls on the laps of the owner As the business grows and accumulates more resources, it should designate  retention building to a specialist who will be responsible for formulating and executing customer retention strategies. Who is the perfect person for the role? The right candidate should be someone who is well-versed in communication, marketing, and customer service. Your ideal candidate must check all these boxes since these skill sets play a role in understanding how to retain customers. Technical knowledge is also beneficial for product development and building customer relationships. Taking the step to designate the duty to a specialist will benefit your company significantly.


Retention is Everyone's Responsibility


Although it is a job for a single person, everyone in your company can contribute to retention. Since retained customers will drive a majority of your revenue, every department should play a role in retaining customers. For example, the product developers have to make a hot product to sell. Your marketing department has to attract well-fit leads to sales. Your technical support teams and account managers have to handle customer complaints satisfactorily and quickly. The management teams must assign the right duties to the right people. In brief, everyone has a role. To monitor your progress, we recommend that you develop internal metrics that support customer retention that departments and teams use to measure themselves. For example, the marketing team should measure lifetime value while the product developers track the features they create. When your organization records a drop in retention, everyone must find ways of restoring customer retention. How can you enforce this system?


Regular Meetings are Essential to Customer Retention


The person in charge of retention should conduct regular  meetings between team members that  set goals and tasks for building retention.  And everyone must be accountable for their part; whether it's the technician or customer service agent, everyone can contribute to user retention.


Customer Success is a Priority and Key to Retention


Most SaaS companies build customer success teams because they want to take charge of the numbers. Customer success teams cannot work alone, but they can conduct the orchestra. We recommend that they monitor, organize, and improve the retention work of all departments , and engage with the sales, marketing, product development, and support teams. As the conductor, your customer success team cannot play every role . However, they can assign the right players to  the right positions.


Aligning Customer Success with Other Teams


Interactions with your customers enable you to accumulate the necessary data. With this, the marketing department will capture the warmest leads, and the sales team will be able to sell your products to the right consumer. With help from the customer success team, you can align the marketing funnel to the sales cycle, allowing you to sell to the right customer and minimize churn. Customer success and account management should also use the data to provide the best service to the customer by anticipating problems before they happen and having a solution readily available. They should determine the customer's definition of value and guide users towards this goal. Moreover, such information is also valuable to product development teams since they can use the data to build and improve product features.


Incentivising Customer Retention


There is a connection between customer retention and the majority of your revenue. Therefore, you need to find ways of incentivizing retention. How do you go about this task? Many people believe that linking your customer success managers' performance to a commission is a good idea. However, this is a mistake. At its core, customer success helps your users find value in your products. Retention is the end result, not the means. If you tie a commission to the destination, your team members may not use the right means to get there; internal disputes may arise with other commission-based employees or your employees could neglect other duties. Commissions are great incentives, but customer success teams should not operate like this. Bonuses are also problematic. It would be irresponsible to hand out a bonus to the success team when other players played a role in retention success. Retention is everyone's responsibility. However, if you choose to have a bonus structure, you should set team goals that support customer retention. Upon the achievement of these goals, you can reward the achievement of team goals quarterly. Getting the formula right on your first try is quite hard, but if you are willing to adjust things as you go, things will improve.


Make Customer Retention a Team Effort for Your Business


In summary, retention plays an important role in the success of any company. For your organization to pay the right amount of attention to retention, you must assign the responsibility to someone. The best approach is to understand your customer. Make retention a team effort, and demonstrate to everyone why it's important. Interested in learning more? Make sure to check out our SaaS Retention Show that covers the strategies and tactics a SaaS company should be using to reduce its churn and increase retention. Insivia specializes in helping SaaS, technology and device companies scale fast by utilizing digital business and integrated marketing to drive leads and close sales. Contact us today to learn more about our offerings.



About Insivia

We're a SaaS Growth Agency scaling SaaS & technology companies through brand positioning, integrated marketing, web design, sales and retention.