The most impactful customer relationships – the lasting ones – are founded on genuine knowledge sharing and human connection. It can cost a brand up to 7 times more to attract a new customer than to keep an existing one, yet paying customers are often left with outdated resources and inefficient support systems. The challenge is providing customers valuable human connection and guidance at scale.The truth is, markets are becoming more competitive, increasing customer expectations.

In tech, businesses used to have to compete with an average of 2.6 other businesses in their first year of business. Now, they face 9.7. With more businesses competing for the same target market, your customers demand a more engaging experience to persuade them not to shop around for faster/cheaper/better looking alternatives.

The solution? Community-led growth - where brands create lasting relationships with customers by giving them a voice to help each other solve problems, share feedback and contribute to the future direction of your business. By breaking down the steps to community-led customer retention, we’ll help you adopt this game changing strategy and leverage your community to create operational efficiencies across your business.

 

What is customer retention?

Customer retention strategy

From a strategic standpoint, customer retention is about creating strong, loyal relationships with customers to ensure revenue is consistent and predictable. Strategically, it involves understanding customer needs, predicting their behaviour, and consistently providing value to keep them more than satisfied. Instead of focusing solely on short-term sales, the emphasis shifts to long-term customer value and converting customers into brand advocates.

Customer retention tactics

Tactically, customer retention involves specific initiatives to engage existing customers and provide them with the knowledge they need to reach their goals. This might include loyalty programs, personalised communication, feedback loops, and community engagement events. Tactics also revolve around creating valuable post-purchase interactions without having to overpromise 1-on-1 time with customer success/support teams. Communities give customers a space to connect with each other and brand representatives, fostering a sense of belonging and ownership in the long-term success of your business.

Customer retention KPIs

To measure the effectiveness of customer retention strategies and tactics, businesses often rely on several key KPIs:

• Customer Retention Rate (CRR): The percentage of customers retained over a specific period.
• Customer Lifetime Value (CLV): The predicted revenue from a single customer throughout their relationship with the brand.
• Net Promoter Score (NPS): Measures customer loyalty by asking how likely they are to recommend the brand to others.
• Churn Rate: The percentage of customers who stop using a product or service during a given timeframe.
• Repeat Purchase Rate: The percentage of customers who have shopped more than once.

Together, these metrics provide a comprehensive view of how well your brand is maintaining healthy relationships with customers.

 

What is community-led growth and how does it impact customer retention?

 Community-led retention is all about leveraging the power of your community to provide prospects, customers or partners with the right knowledge and connections, at the right time. To ensure customers stick around for the long haul, your business must provide ongoing opportunities for them to learn, share and grow together. In this way, community-led growth acts as a multiplier on top of product or sales-led growth. 

For years businesses like Apple and Google have created operational efficiencies through support forums. The next generation of customer communities proactively drive advocacy rather than simply react to complaints, bugs or challenges.

 

Types of community to drive customer retention

Community driven by product

Evolving from old-fashioned support forums, FAQs and knowledge bases, most communities designed to influence retention provide a space for customers to exchange product advice, showcase successes or share feedback to inform future product decisions. This experience not only helps ease support bottlenecks but also creates valuable knowledge sharing and connection opportunities for customers that they may be not able to access elsewhere. 

Community driven by practice

Beyond learning how to get the most out of your product, more brands are creating community experiences around professional best practices or brand-related interests. Providing a space for continuous personal or professional growth can differentiate your brand from competitors and create new opportunities to upsell customer through access to exclusive content or experts’ time.

Whether you're creating a community driven by product, practice or both, it's important to create spaces or activities that can be unlocked through a customer’s journey. Choosing the right platform to create these personalized experiences is an important step to impacting customer retention. 

 

How does community-led customer retention work?

When done properly, your community can become part of your customers’ daily routine, creating a deeper connection to your brand over time. Providing a space where customers can openly and safely share problems, ideas and feedback seems obvious but too many customer communities exist across fragmented channels designed for other purposes. This creates additional value for your customers beyond the success they can achieve with your product or service. 

Lauren Taylor from REDF, a startup accelerator describes the competitive advantage a community can provide as ‘moat’ - ‘a defensive strategy that protects your IP from being built out by better resourced or more established players in the market.’

When brands invest in creating a leading customer experience and encouraging feedback, it shows they care. This not only helps improve what they offer but also makes customers feel valued, reducing the chances of them leaving. This sense of belonging is what inspires to step in to support and help one another, easing the load on formal customer support.

 

What are the key benefits of a community-led customer retention strategy?

Before championing a community-led growth to transform how your business approaches customer retention, it’s important to first understand the key benefits and how they could help create new operational efficiency

✓ Self-service

Community enables peer-to-peer support and creates a knowledge base of common questions/answers

✓ Product adoption

Community enhances onboarding and ongoing education by centralizing where best practice is shared

✓ Roadmap engagement

Community allows customers to participate in your company journey and become supporters of your mission

✓ Customer advocacy

Community drives loyalty and encourages customers to share successes with their peers 

✓ Product Feedback

Community facilitates a constructive discussion with customers about how the product supports their priority use cases 

✓ Feature ideation

Community makes it easy for customers to share and vote for potential solutions to their shared challenges

The impact of community-led growth quickly spans beyond retention and enhances the whole customer lifecycle. By leveraging the loyalty and participation of people already closest to your business - your customers -  your business as whole can become far more resilient, scalable and innovative. 

 

Examples of community activities that impact customer retention

1. AMAs (Ask Me Anything) Discussions

Host regular customer-only events where company leaders or selected experts answer questions submitted by community members in real-time. Transparent dialogues help customers feel connected to the brand's core, reinforcing trust and offering insights into the company's values and direction.

2. User-Generated Content (UGC) Initiatives

Encourage community members to create and share success stories and best practices related to your product or service. When contributors are rewarded or given recognition, their connection to the brand strengthens, and they're more likely to stay loyal.

3. Exclusive Community Webinars & Workshops

Organise educational or informative sessions exclusively for community members. From product tutorials to industry insights, offering exclusive experiences to specific groups of customers enhances their sense of belonging and emphasizes the brand's commitment to their growth and learning.

4. Collaborative Product Development Initiatives

Involve community members in the product development process, whether through feedback sessions, beta testing, or idea generation discussions. When customers feel they play a role in shaping a product or service, their investment in its success escalates, increasing loyalty and reducing the chances of churn.

By repeating these activities on a regular basis and private spaces that only certain groups can access, your community can create an environment where customers feel valued, engaged, and committed for the long haul.

 

3 best practices for community-led customer retention

Embracing a shift from one-sided broadcasts or 1-on-1 support, to dynamic community interactions elevates your customer experience. These key principles will help lay the groundwork for a community that enhances customer engagement and loyalty.

1. Cultivate Authentic Engagement

Listen more than you speak. Encourage open dialogue, address concerns promptly, and celebrate community milestones. Engage in two-way conversations to foster a community culture where feedback (both positive and critical) is valued.

2. Provide Exclusive Value

Offering something unique to your community members can be a powerful retention tool. When members feel they're getting distinct value, they're more likely to stay engaged and loyal. Promote community-only content, early access to products, exclusive discounts, or educational resources as part of your product offering.

3. Facilitate Peer-to-Peer Connections

Communities are not just about the brand-to-customer relationship. Helping the right customers to network can be the catalyst to your community providing its own support and new layers of engagement. Create spaces within your community platform for members to share experiences or challenges and celebrate community champions who actively help others.

 By embracing these principles, your business can place community at the center of your entire customer lifecycle, ensuring meaningful engagement and optimal value every step of the way.

 

What metrics indicate community impact on customer retention

The most recent CMX report showed that the top frustration for the community industry was keeping members regularly engaged and quantifying the value of the community. This is particularly true for online communities experiences created with a patchwork of tools. Zapnito data shows that customers active in a well built brand community are 40% less inclined to churn and have a 50% higher propensity for upsells. The tools you employ play a pivotal role in gauging these pivotal indicators. Here are some key metrics that underline how your brand community fortifies customer loyalty:

Community Engagement Rate

Measures the active participation and interaction levels of community members.

Calculation: (Number of active users / Total number of community members) x 100

Why it matters: High engagement often correlates with increased customer loyalty. Members who actively participate are more likely to feel a connection to the brand and community, reducing the likelihood of churn.

Stickiness

Tracks how often members log in or visit the community platform.

Why it matters: Regular logins can be an indicator of the community's value to its members. Higher frequency suggests that members derive consistent value, enhancing retention.

Content Contribution Rate

Measures the amount of user-generated content, such as forum posts, comments, or shared resources.

Calculation: Total number of user-generated content items / Total number of community members

Why it matters: Members who contribute content are more invested in the community, implying a deeper connection to the brand.

Community Support Resolution Rate

Tracks how often community-driven support (e.g., peer answers to queries) resolves issues compared to formal customer support channels.

Calculation: Number of issues resolved within the community / Total number of issues raised in the community

Why it matters: A high resolution rate suggests that the community acts as an effective support system, enhancing user satisfaction and potentially reducing churn stemming from unresolved issues.

While these KPIs provide valuable insights, it's essential to view them holistically alongside broader business metrics. Effective community-led growth aims for both quantitative growth and qualitative depth, ensuring that the community truly impacts customer retention positively.

 

What department should own a community-led customer retention strategy?

A community-led growth strategy, particularly one focused on customer retention, shouldn't be siloed within one department. To get buy-in into a cross-functional approach, its important to show how teams will already be doing some level of community building. Claire Butler, Senior Marketing Director at Figma writes “When you’re pitching your product to users and gathering feedback, that’s an exercise in community. The next step is just connecting those folks to one another”.

Typically customer retention is driven by customer success and customer marketing. Customer Success is all about helping customers achieve their desired outcomes from your product/service. Creating a space for customers to learn, share and grow together frees up our team to provide more personalised and proactive support.

• Marketing & Branding: These teams can amplify community stories, highlight user testimonials, and integrate community feedback into broader campaigns.
• Sales: By engaging with the community, sales teams can identify potential upsell or cross-sell opportunities. Moreover, understanding community sentiment helps refine sales strategies.
• Customer Support & Success: These teams should actively participate in community discussions, providing expertise and ensuring user issues are promptly addressed. They can use community insights to proactively identify and rectify common customer pain points.
• Product Development: By tapping into community feedback, these teams can refine products or services to better meet user needs - a critical factor in customer retention.
• Executive Leadership: Buy-in and support from top-tier leadership ensure that community-led growth remains a priority, integrating it into the company's broader mission and values.

Ownership of the community-led growth strategy's impact on customer retention should be a company-wide initiative but driven by the department that owns retention and upsell. Collaboration ensures that the community's voice consistently informs and enhances the performance of every department in your business.

 

How to expand your community impact to impact beyond customer retention to acquisition, adoption and advocacy

Recognising the distinct groups of customers within your community is essential to crafting personalised journeys that elevate their experience with your brand. This is particularly important when planning content and activities that can influence new customer acquisition, product adoption, customer retention and advocacy. Many companies start their community journey by creating an exclusive space for current customers to exchange insights before extending access to potential customers. You can check out our guides to community-led customer acquisition, product adoption, and brand advocacy to learn more.

 

Conclusion

Building a strong community is key to keeping your customers happy and coming back. Better feedback, fewer support questions, and relevant product ideas are the lifeblood of any scalable business. Community experience is an essential competitive advantage in today’s market.

Ready to focus on engaging the people who matter most to your businesses’ success? Book a personalized demo call to learn more about our community knowledge-sharing platform and expert guidance.