How to Build a CRM Strategy to Improve Customer Retention in 2024

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Learning how to build a CRM strategy for improved customer retention is vital. Increased customer retention can lead to significantly higher profits—up to 95% for just 5% retention.

However, customers today have more choices and higher expectations, which makes them harder to retain. As such, many businesses struggle to identify and adapt to their customers’ evolving needs and preferences.

In this article, we’ll show you how to build a CRM strategy, including how to:

  • Make use of your customer data
  • Understand the customer journey, and
  • Maximize the impact of your CRM

With this, you’ll be able to transform common challenges into opportunities for growth and stronger customer loyalty.

Key Takeaways:

  • An effective CRM strategy helps you enhance customer retention by understanding and responding to customer preferences and needs.
  • Essential metrics like retention rate, churn rate, and customer health scores are crucial for understanding and shaping a CRM strategy that retains customers.
  • Pinpointing reasons for customer churn and setting SMART goals based on these insights are key steps in retention strategies.
  • Effective retention strategies include personalizing experiences, leveraging customer feedback, offering loyalty incentives, and providing outstanding customer support.
  • Continuously assess and adjust your CRM strategies based on customer data and feedback to stay relevant and practical.

Why Customer Retention Matters

Customer retention isn’t just about maintaining a steady customer base; it’s also a key driver for profitability and business growth. Here’s why:

Cost-EffectivenessIncreased ProfitabilityBrand AdvocacyLoyalty vs New PurchasesFeedback Opportunity

It can cost up to 7x as much to acquire a customer than to retain one you already have. By focusing on retention, businesses can optimize their marketing spend and achieve better ROI.

Studies have shown that even a small boost in retention (5%) can lead to a sizable jump in profits (between 25% and 95%).

Loyal customers tend to become advocates for your brand. They recommend your products or services to others, providing valuable word-of-mouth marketing.

You’re statistically more likely to make a sale to an existing customer (60%-70% chance of success) than to a new customer (5%-20%).

Long-term customers are more likely to provide valuable feedback, essential for product or service improvements.

How Does a CRM Help You Retain Customers?


Monday CRM – Affordable, Easy to Use, and Scalable

  • Powerful Sales Automation
  • Task and Project Tracking
  • Efficient Roadmap Planning

Improving customer retention is one of the key benefits of using a CRM. It does this by providing detailed insights into customer behaviors and preferences.

It allows businesses to personalize experiences, track customer interactions, manage feedback, and segment customers for targeted marketing, contributing to higher customer satisfaction and loyalty.

How to Build a CRM Strategy to Improve Customer Retention

In this section, we’ll run over the 4 steps to building an effective CRM strategy for customer retention.

1. Gather Customer Retention Metrics

To craft a successful CRM strategy for customer retention, it’s crucial to understand and measure the right metrics.

Demographics and Purchase History

Demographics and Purchase History

Start by analyzing customer demographics and purchase history. This data helps identify trends and patterns in buying behavior, so you can tailor retention strategies accordingly.

CRM tools, such as Salesforce CRM, for example, provide a comprehensive view of each customer’s demographic profile and purchase history.

Customer Engagement

Customer Engagement

You must keep an eye on how customers engage with your brand through different channels — e.g., website visits, email opens, social media engagement, and app usage.

By doing this, you can gain detailed insights into customer interactions and understand which channels are most effective in maintaining customer engagement.

Customer Retention Rate

Customer Retention Rate

This metric indicates the percentage of customers retained over a period. You can calculate your retention rate using this formula:

((Customers at the end of a period – New customers you’ve acquired) / Customers at the start of the period) x 100 = Customer retention rate

This metric indicates the percentage of customers retained over a period. A higher retention rate typically signifies a successful customer relationship strategy.

Customer Churn Rate

Customer Churn Rate

Your customer churn rate, or attrition rate, shows the percentage of customers you lost in a given period, highlighting areas where you might have lost their trust or failed to meet their needs.

Calculate it using this formula:

(Customers lost in a period / Total customers at the beginning of the period) x 100 = Customer churn rate

Customer Lifetime Value

Customer Lifetime Value (CLV)

CLV predicts the total profit expected from a customer over the entirety of their relationship with your business.

By forecasting revenue from a customer against the costs of acquiring and serving them, CLV helps prioritize efforts toward high-value customers, ensuring optimal resource allocation.

Net Promoter Score

Net Promoter Score (NPS)

The net promoter score tells you who among your customers will likely recommend your brand to others. Calculate your NPS by subtracting negative ratings from positive ones.

To calculate yours, ask customers their likelihood to recommend your company on a scale from zero to 10. Then, subtract the number of positive ratings (promoters) from negative ones (detractors).

Customer Satisfaction Score

Customer Satisfaction Score (CSAT)

Your CSAT, or customer satisfaction score, tells you how happy your customers are with an interaction, product, or service from your brand.

It’s often measured through short surveys asking customers to rate their satisfaction on a scale—for instance, from one to five, one being unsatisfied and five being satisfied.

You can figure out your CSAT, represented as a percentage, by dividing the number of positive responses by the total responses and multiplying that by 100.

(Positive responses / Total responses) x 100 = CSAT

Customer Health Score

Customer Health Score

The customer health score is a vital indicator combining factors like product usage, engagement, support interactions, feedback, and renewal history.

This typically involves assigning weights to these factors and combining them into a single score to help identify how satisfied and engaged your customers are.

This enables you to address potential issues and tailor your retention strategies effectively and proactively. For example, you might include factors like:

  • User experience (“Did they encounter any issues with their product this month?”),
  • Adoption (“How quickly did they adopt new features?”),
  • Usage (“How often did they sign in?”), and
  • Support (“How many times did they contact support?”)

You can score these with a percentage, a simple status (e.g. “All Good,” “Attention Needed,” “Urgent Issue”), or a grade score (F–A). It’s up to you to define the metrics you want to track, create the scoring system, and then visualize and analyze it for insights.

Average Resolution Time

Average Resolution Time

In customer service, this metric measures the average time taken to resolve a customer’s issue. Faster resolution times generally lead to higher customer satisfaction and retention.

Feedback and Surveys

Feedback and Surveys

Regularly collect and examine customer feedback to gain direct insights into customer satisfaction and areas for enhancement.

For example, HubSpot Sales Hub offers integrated surveys so you can collect and analyze customer feedback and spot areas for improvement.

2. Identify Common Issues Leading to Churn

Before you can enhance customer retention, you have to understand and address why customers leave in the first place—referred to as “customer churn” or “customer attrition.”

Common reasons for customer churn include:

Poor Customer ServiceQuality IssuesLack of Ongoing EngagementFriction in User ExperienceIneffective MarketingCompetition and Market Changes

Poor Customer Service

Long response times, inadequate support, and a lack of personalization can leave customers feeling neglected and frustrated. This often leads to churn, a trend observable through metrics like:

  • Increased support ticket volume
  • Negative feedback scores, and
  • A low CSAT score

Product or Service Quality Issues

Churn from product or service quality arises when the customer experience falls short of expectations, whether in functionality, reliability, or overall value. It’s often highlighted by metrics such as:

  • Declining repeat purchase rates
  • Negative product reviews

Inconsistent quality and insufficient product enhancements can lead to reduced customer engagement and a desire to seek more innovative solutions.

Lack of Ongoing Engagement

This typically originates from ineffective communication strategies, where messages are irrelevant or infrequent, leading to a loss of interest. Metrics like this signal a drop-off due to a lack of ongoing engagement:

  • Decreased email open rates
  • Reduced website engagement, and
  • Low event participation

Friction in User Experience (UX)

Complex interfaces, cumbersome processes, and technical issues disrupt the customer journey, leading to dissatisfaction and churn. Friction in UX is often reflected in metrics such as:

  • High website bounce rates
  • Abandoned shopping carts, and
  • Low user satisfaction scores

It’s vital to resolve these issues because they have a significant impact on how your customers interact with your brand.

Ineffective Marketing

Generic, irrelevant messaging can lead to disengagement, and bombarding customers with too many messages can drive them away. Ineffective marketing can be identified through metrics like:

  • Low campaign conversion rates
  • Declining engagement with marketing materials

Personalization in marketing is key to fostering customer loyalty and interest in your brand.

Competition and Market Changes

Lastly, churn can be influenced by external factors like competitor actions and market changes. If your rivals are constantly innovating and offering more attractive features and benefits for the same price or less, it’s no wonder customers are jumping ship.

These external factors are reflected in metrics such as:

  • Loss of market share
  • Declining customer acquisition rates, and
  • Negative customer feedback regarding product relevance

Keeping pace with market trends and competitor innovations is essential for retaining customers who might otherwise be drawn to more contemporary or superior offerings.

3. Create SMART Goals to Combat Drop-off Points

Setting SMART Goals

After identifying the root causes of customer churn, the next step is to set clear, achievable goals to tackle these issues. The SMART framework is an effective tool for this.

Businesses can create focused, actionable plans to improve customer retention by setting SMART goals. Here’s how:


Goals should be clear and specific, addressing the identified drop-off points. A vague goal lacks direction, making it hard to achieve meaningful results.

For example, if poor customer service is a drop-off point, a specific goal could be “Improve customer service response time.” This goal directly addresses the issue and sets a clear direction for the team.

CRM software features, such as Zendesk‘s analytics, can track response times and identify bottlenecks, aiding in setting specific improvement targets.


Each goal must have criteria for measuring progress. This helps to track the effectiveness of your strategies and make necessary adjustments.

For example, to improve customer service response time, the measurable target could be, “Reduce average response time from 24 hours to two hours within six months.” This provides a quantifiable target to aim for.


Goals should also be realistic and attainable. Unrealistic goals can demotivate your team and lead to frustration. For example, if UX friction is a problem, an achievable goal might be:

“Redesign the checkout process to reduce cart abandonment by 20% in three months.”

Here, a CRM like HubSpot, for example, can be instrumental. It offers behavior tracking codes, heatmaps, website popup forms, and live chat to analyze customer interactions on your website.

It helps identify friction points in the checkout process and suggest areas for improvement.


Ensure goals are relevant to your broader business objectives and customer retention strategies. For example, addressing product quality issues might have the goal:

“Implement a quarterly product review and improvement process to increase customer satisfaction scores by 15% within a year.”

This is relevant and appropriate to the overall aim of enhancing product quality and customer satisfaction.


Set firm deadlines to achieve your objectives. This pushes you into action and makes it easy to decide which tasks to tackle first.
For example, for improving marketing communication, a time-bound goal could be:

“Develop and launch a personalized email marketing campaign within the next two months, aiming to increase customer engagement by 30%.”

4. Evaluate Your Success and Refine

Effective customer retention isn’t a one-time effort. It’s a process that requires continuous attention and adaptation, such as regularly gathering and analyzing data to understand and adjust to changing customer needs and behaviors.

There are many tools to help with this. Zoho CRM‘s comprehensive analytics, for example, lets you continuously monitor key metrics such as customer health scores, churn rates, and engagement levels.

This data can reveal how your strategies are excelling and where you might need to improve. For example, you might decide to:

  1. Adjust your approach to customer service based on interactions tracked in Zoho
  2. Personalize your marketing campaigns using segmentation tools
  3. Update your product offerings from customer feedback insights

By actively seeking to understand your customers and avoiding complacency, you can ensure lasting, strong customer relationships and stay ahead in a dynamic market.

13 Practical Strategies for Improving Customer Retention


Monday CRM – Affordable, Easy to Use, and Scalable

  • Powerful Sales Automation
  • Task and Project Tracking
  • Efficient Roadmap Planning

Let’s have a look at actionable tips for improving customer retention with practical CRM strategy examples using the best CRM tools.

1. Treat Customers as Individuals

We can agree that a one-size-fits-all approach no longer suffices. Customers want experiences tailored just to them, based on their individual needs and preferences.

Begin by diving into the rich data your CRM offers. Analyze past purchases, interaction history, and preferences to tailor your communications and offers.

This can transform a generic marketing message into a personal conversation. Moreover, consider the power of special occasions like birthdays or milestones in your customers’ journey with your brand.

A simple, personalized gesture made on these days can significantly strengthen the emotional bond with your customers.

2. Encourage Repeat Business

Implementing a loyalty program or providing incentives is a proven strategy to boost customer retention. Here’s how to create effective loyalty incentives:

  • Design a Tiered Loyalty Program — Offer increasingly valuable rewards as customers make more purchases or engage more with your brand.
  • Offer Exclusive Deals — Provide loyal customers with perks such as early access to new products, special discounts, or members-only events.
  • Celebrate Customer Milestones — Acknowledge significant moments, like their first or 10th purchase anniversary, and reward them with special incentives.
  • Feedback-Based Rewards — Encourage feedback by offering incentives for completing surveys or participating in focus groups.

Case Study

The Starbucks Rewards Program allows customers to earn stars on every purchase, redeemable for free items. Plus, it offers personalized recommendations based on purchase history and preferences.

3. Seek and Act on Customer Feedback

Regular customer feedback isn’t just about collecting opinions; it’s about shaping your services and products based on what your customers tell you.

Make it easy and inviting for customers to provide feedback through surveys, feedback forms, or direct communication channels. More importantly, encourage this dialog by reaching out post-purchase or after significant interactions.

Zoho CRM integrates with “Zoho Survey,” for example, which lets you design surveys, trigger them based on specific events (purchase, support ticket), and analyze responses alongside customer data.

You can then analyze these insights for patterns and recurring themes to reveal invaluable opportunities for improvement or innovation.

4. Make Your Support a Pillar of Customer Satisfaction

Transforming customer support into a memorable and positive experience is key to retention. Here’s how to elevate your customer support:

Prioritize Efficient SolutionsPersonalize InteractionsProactively Address ConcernsContinuous TrainingProactive Customer Contact

Speed combined with accuracy in problem-solving can significantly enhance customer satisfaction.

Train your team to recognize and reference a customer’s history with your brand, ensuring a personal touch.

Encourage your team to anticipate potential issues during interactions and offer proactive solutions and advice.

Keep support staff updated with new techniques and approaches, using customer feedback to guide their training.

Reach out to customers with updates, tips, or assistance before issues arise, showcasing your commitment to their satisfaction.

Case Study

Many recognize Zappos as one of the online retailers that nail customer service. It focuses on making customer interactions as helpful and positive as possible by offering free shipping and returns and providing a unique and fun shopping experience.

5. Connect Through Engaging and Relevant Content

Engaging content is a powerful tool for maintaining customer interest and loyalty. You can do this by following these best practices:

Understand Your AudienceDiversify Content TypesMaintain Brand ConsistencyEncourage InteractionUse CRM Software

You must know what your ideal customers are like before you can connect with them. So, start by creating buyer personas to guide your content and address specific customer interests and needs.

Mix up your content with blogs, videos, and social media posts to appeal to different audience preferences and ensure your messaging stays engaging.

Ensure consistent brand messaging across all content formats to build trust and a strong brand identity. Include educational, entertaining, and insightful material to make your brand valuable in customers’ lives.

Encourage feedback and interaction with your content using user-generated content (UGC), creating a two-way communication channel that makes customers feel heard and connected.

Software like Pipedrive CRM can be beneficial in tracking how customers interact with your content.

For example, when a customer interacts with specific content, such as watching a video or downloading a white paper, you can record these actions as activities in Pipedrive. This creates a timeline of their content engagement within their contact record.

6. Proactively Reach Out Before Problems Arise

Proactive engagement with customers can significantly enhance their experience and prevent dissatisfaction. This approach involves understanding and addressing customer needs before they turn into problems.

Monitoring customer behavior through your CRM can reveal patterns and potential issues, allowing you to proactively reach out with solutions or assistance.

For instance, Zendesk‘s “Predictive Action” feature analyzes customer interactions and predicts churn risk. This allows you to identify and proactively engage with customers before losing them.

Regular check-ins at strategic points in the customer journey, like post-purchase or during periods of inactivity, ensure customers are satisfied and engaged.

Plus, educating customers through tips, guides, or updates about your product or service can preempt problems and enhance their overall experience.

7. Build a Community

Creating a community for your brand can really engage customers and keep them coming back. How? By offering more than just products or services, your organization can create a shared experience and a sense of belonging among your customers.

For example, Nike’s community-building efforts around fitness and athletics foster a shared “Just Do It” spirit through social media challenges and global events, creating a bond among members.

To develop your brand community, identify interests or values that connect with your customers. Use social media, forums, or your website to facilitate discussions and interactions.

You can even engage your customers through events that reflect these shared interests. Active participation in these communities is crucial.

Show your customers that you value their input and are committed to enhancing the product experience and their sense of community belonging.

8. Make Onboarding Smooth

Onboarding lays the foundation for your customer’s experience, and it can make or break their impression of your brand. To ensure a positive start, make the onboarding process streamlined and user-friendly, avoiding information overload.

Provide clear guides or tutorials for easy product or service initiation, and personalize these resources to meet individual customer needs. Ensure support is easily accessible during this phase to address concerns and build trust in your brand.

For example, CRM allows you to create custom workflow boards with educational resources integrated into the process. This can guide customers through onboarding, product usage, or troubleshooting steps.

9. Stay Ahead With Responsive Product Innovations

Nokia’s CEO famously said, “We didn’t do anything wrong, but somehow, we lost.”

The company didn’t do anything wrong per se but failed to innovate in time to adapt to the market dynamics, leading to the company’s downfall.

Therefore, try to regularly update your products or services based on customer insights to meet evolving needs and preferences. Plus, it helps to actively monitor industry trends to stay ahead.

This proactive stance in adapting and evolving your offerings can significantly enhance customer loyalty and set you apart from competitors.

10. Segment Your Customers

Effective customer segmentation helps to tailor experiences and communication to meet diverse needs, leading to engaging interactions. You can use CRM data to segment customers by purchasing behavior, demographics, and engagement history.

Oracle’s CRM system, for instance, offers advanced data analytics features that can effectively segment your customer base, ensuring more targeted and personalized marketing strategies.

Once segmented, you can implement customized strategies for each group, including tailored campaigns and recommendations to enhance customer experience and improve retention efficiency.

11. Regularly Monitor Customer Health Scores

By regularly monitoring and analyzing customer health scores, you can better understand—and more proactively address—customer needs.

Health scores, calculated based on product usage, engagement levels, and customer feedback, clearly indicate customer satisfaction and potential churn risks.

For example, Salesforce CRM offers its “Health Score” feature within the Customer Success Platform, allowing score creation based on predefined templates or custom metrics.

You can track these scores over time and identify patterns that can indicate a customer’s likelihood to continue using your service.

Use this data to intervene early with customers who show signs of decreased satisfaction and offer support, resources, or incentives to re-engage them.

This ongoing assessment allows you to proactively address issues and tailor your strategies to meet customer needs, which helps to maintain high satisfaction and minimize churn risk.

12. Employ Win-Back Strategies

Winning back customers who’ve stopped using your services is essential to a comprehensive retention strategy. Identify the customers who have lapsed and analyze the reasons.

This could be due to changes in their needs, dissatisfaction with the service, or attraction to a competitor’s offerings. Develop targeted re-engagement campaigns that address the reasons for their departure.

This could include special offers, updates on new features, personalized messages, or improvements based on their feedback.

Case Study

Netflix has several strategies to win back customers who have canceled their subscriptions. It sends out personalized emails with access to discounts and free trials and offers the ability to resume watching paused shows.

13. Prioritize Accessibility

When websites and products have user-friendly designs and accessibility features, they’re easier to navigate, more enjoyable to use, and available to all users, including those with disabilities.

So, keep your product or service simple to reduce frustration and ensure your platform(s) comply with accessibility standards. It’s also helpful to incorporate usability testing.

This allows you to gather direct feedback on how users interact with your product or service. You can then use this feedback to see what’s working and what isn’t.

Ultimately, prioritizing user-friendly design and accessibility in both web and product design enables you to cater to a broader customer base and demonstrate your commitment to inclusivity and customer-centricity—key factors in building loyalty and trust.

Case Study

Google creates products and services that are simple, intuitive, and accessible to everyone. Gmail, Google Maps, and Google Search are all known for their clean interfaces and easy-to-navigate features.

Google also incorporates accessibility features into its products, making them usable for people with disabilities.

Final Thoughts


Monday CRM – Affordable, Easy to Use, and Scalable

  • Powerful Sales Automation
  • Task and Project Tracking
  • Efficient Roadmap Planning

The journey to enhance customer retention is both challenging and rewarding. Business success is hinged on understanding customer’s unique needs and preferences and responding appropriately.

To strengthen customer relationships, you can use strategies like personalizing customer experiences, proactively solving problems, offering loyalty rewards, and creating engaging content.

Here, the role of a robust CRM system becomes invaluable. It not only facilitates these strategies but also provides the insights and tools needed to turn casual buyers into loyal advocates.

In the face of fierce competition, the key to sustained growth is staying adaptable, listening to your customers, and consistently striving to exceed their expectations with a powerful CRM strategy.


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Maheen Kanwal
Technology Expert
Maheen Kanwal
Technology Expert

Maheen Kanwal holds an MBA and brings and 8+ years' experience working in and writing on the fields of business and people management, including a four-year stint as the HR Management Executive for a large Oil & Gas firm. Over the years, she's managed every side of business and people management, from recruitment and organizational development to performance reviews and certified skills training. She's also an experience Business Tech writer, with articles appearing in Technology Advice, Small Business Competing, Webopedia, Software Pundit, and Techopedia.