Customer Service

What is the secret to happiness? Money? Friends? 

People of all backgrounds have been struggling with the answer to this question for centuries, and for almost as long, marketing leaders have been pondering the secret to customer happiness.

Unfortunately, most are still stumped. 

Keeping your customers satisfied with your product or service is non-negotiable. 

If customers are unhappy, they won’t just leave you, they’ll add salt to the wound, leaving you for one of your competitors, and the last thing any business needs after a blow to the wallet is a bruised ego. 

The role of marketing today is as much about delighting existing customers as it is attracting new ones. You want to make sure customers have a great experience using your product or service so they not only buy again, but ideally, spread the word through referrals or social media. 

“Loyalty is when people are willing to turn down a better product or price to continue doing business with you.” – Simon Sinek

Customer loyalty is your ultimate goal, but that can only be achieved if you are in good standing with them.

Metrics You Should Be Tracking to Help Improve Your Customer Retention

No matter what your industry or business model, customer retention rate is a great indicator of how happy your customers are and usually how likely they are to stick around. Client Heartbeat describes the value of knowing this, saying:

  • “According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%.
  • Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers.

Retention Rate = ((CE-CN)/CS)) X 100

C= number of customers at end of period
C= number of new customers acquired during period
CS = number of customers at start of period

Customer retention is the multiplier that exponentially increases customer lifetime value (CLV) and deserves the attention of every marketer.

CLV = (Average sale per customer)(Average number of times a customer buys per year)(Average retention time in months or years for a typical customer)

Of course, you can and should be tracking your retention rate and customer lifetime value, but we’re going to look at the key performance indicators (KPIs) that influence that retention rate, and are often overlooked.

Obviously, you want to measure customer satisfaction whenever you can, but you don’t want to bombard your customers with surveys and polls either. 

Instead, for more consistent data, you can monitor the following KPIs to get an idea of how satisfied your customers are without having to ask them.

1. Average Response Time

When a customer reaches out, how long does it take for you follow up?

Response times can play a large role in customer satisfaction and this is arguably the biggest contributor to customer retention.

We are constantly reminded that to make the final sale, you need to be readily available to your prospects and follow up, but that effort should continue even after they sign on the dotted line. 

Nothing is more frustrating to a customer than a company that is no where to be found when they are in need. Whether it is ignoring a glitch that a user has reported, or failing to respond to a question in an email, this kind of negligence can turn even the biggest advocate sour on your organization. 

Without your customers, you would have no business, so it’s important to make sure that they feel appreciated and receive quality service at all times. 

Ameen Khwaja explains it nicely in his Entrepreneur post:

“Be genuinely committed to providing more customer service excellence than anyone else in your industry. This commitment must be so powerful that every one of your customers can sense it.” 

You need to keep an eye on your communication outlets and be ready and willing to answer any questions, over any solutions, or address any issues that may arise in a timely manner. 

If your customer satisfaction rates are low, take a look at your average response times. If they are high, this is a quick and simple place for you to start making improvements. 

Consider breaking down your response times into your most popular outlets: phone, email, and and live chat. 


Research has found that about 53% of customers believe three minutes to be an acceptable response time when waiting on a customer service agent to take their call. Do you know how long your business keeps its customers waiting?

We all know the feeling of being stuck on hold for what seems like a lifetime. Don’t be like those companies. Start tracking your response time and try to keep it below a few minutes.


Responding to customer emails is so simple that it amazes me how many companies fail to respond in a reasonable amount of time.

The rule-of-thumb used to be 24 to 48 hours for an email response time, but most consumers today expect a response within one business day. In fact, the desired email response time from consumers is moving closer and closer to one hour.

If you’re feeling overwhelmed by the idea of responding to every customer email within one hour, don’t worry, you likely aren’t going to lose many customers as long as you respond within a day or two. According to this study, 50% of consumers give a company up to one week to respond to a question before forming a negative impression. 

Live Chat

Offering live chat support on your website is a very efficient way to provide customer service and a very popular one. (Just ask the folks over at WriterAccess; they have one of the best live chat response times I’ve ever seen.)

Unlike a phone call, you can help several customers at once on live chat, and unlike email, you can also ask questions and troubleshoot in  real time, instead of waiting for responses on the other end. 

There are many chat providers for your organization to choose from, but most have built-in analytics dashboards to help you track response times and keep logs of all interactions with customers.

2. Customer Referrals

If you’re not already tracking customer referrals, you need to start.

Your best customers are also your best salespeople. When they are happy, they will provide testimonials, leave reviews, and most importantly, refer their friends, family, and coworkers to your brand.

Having a lot of customer referrals indicates that customer satisfaction is very high.

If your customers aren’t telling their friends and family about you, it doesn’t necessarily mean that they aren’t happy with your product or service. It just means there might be room for improvement. 

Affiliate or refer-a-friend incentive programs are very powerful tools that marketers have been using forever.

Not only do they reward customers for providing you with new business, but they provide you with several valuable insights. In addition to detailed tracking of your customer referrals, affiliate programs provide you with insight into why people recommend your brand.

Referral programs might not be ideal for all types of businesses, but all businesses should be tracking customer referrals to determine if it ever could present a word-of-mouth marketing opportunity.

3. Repeat Purchases

If you offer a service, such as a SaaS, customer retention is measured by how long someone stays subscribed to your service. People are either a customer currently or they are not.

Businesses that sell products, however, have a harder time measuring customer retention.

How can you know if they’re still a customer or if they’ve moved on to another business when your customers aren’t subscribed to your product?

The answer is repeat purchases.

While some of your customers may voice their love or dissatisfaction of your product on social media or on your website, most people will tell you how happy they are by continuing to buy your product time over time.

Most eCommerce platforms will allow you to easily track this KPI, so there’s not anything technical required of you, but improving this metric is up to you and it starts with great customer service.

4. Post-Conversion Activity

Now, most businesses that practice the Inbound Methodology already do this, but alot of businesses that are new to the process, overlook it.

Most teams tend to focus too much on generating new business and end up neglecting the development of customer loyalty. 

Tracking your customer’s behavior and activity on your website, social media, and through email marketing is just as important now as it was when they were only a lead. So, ideally, you’d like to see your current customers continue to engage with your content and keep you at top of mind, when it comes time to make a new purchase or refer a friend. 

Your customer’s behavior tells you a lot about their continued satisfaction and whether or not they will remain a customer.

Here are some of the vital KPIs to track:

  • Pages viewed
  • Average time on website
  • Email open rate
  • Email click through rate
  • Items added to cart

One of the reasons that businesses have so much success with Inbound Marketing is that it accomplishes customer acquisition and retention at the same time. By measuring everything you can, as often as you can, you are always learning from your customers and improving your business — in the long run, there’s no better way to make your customers happier and keep them around for a long time.