Using Personalization to Improve Customer Retention in Tech

Using Personalization to Improve Customer Retention in Tech

Chirag Deshpande
High-Tech Industry Lead
Jun 5, 2024

Understanding the Importance of Customer Retention in the High-Tech Sector

Focusing on customers and enhancing their experience—embracing customer obsession—has driven digital and data transformations over the past three years.

Personalizing customer acquisition channels was a key aspect of this transformation for all high-tech industry customers; improved customer profiling, first-party data strategies, and personalized acquisition funnels have significantly impacted revenue.

The 2022 "SaaS crash" and higher acquisition costs necessitated reducing costs and increasing revenue. Therefore, to retain and expand our existing customer base, we prioritized personalization.

A Harvard study found that retaining just 5% more customers can boost revenue by 25%. Although retaining customers offers cost savings by ensuring renewals and growing revenue at a fraction of new acquisition costs, implementation has been challenging.

Components of a positive customer relationship with your brand

Effective customer retention strategies enhance loyalty and satisfaction, fostering an emotional connection. Retention programs have shifted from transactional to emotional engagement, aligning with changing consumer behaviors. Customers who feel appreciated, respected, and valued are more likely to remain loyal to a brand or technology. They expect preferential pricing and other benefits in return for their loyalty, advocacy, data enrichment, and increased business.

A data-driven, personalized program can distinguish between customers who behave loyally and those who feel loyal, encouraging both to become genuinely loyal customers (Source: Forrester Research, Inc.).

There are three main reasons for implementing a retention program focused on growth:

1. It’s Cost Effective

Customer acquisition in the high-tech sector is notoriously expensive, with costs rising by 50% over the past three years. 

Acquiring new customers can be up to 20 times more expensive than retaining existing ones. Additionally, a churn rate of 10% among existing customers further impacts your bottom line each year.

By deeply understanding your current customers and analyzing their behavior, you can create effective lookalike models to acquire new customers more cost-effectively.

By adopting a personalized strategy to retain customers, you can boost revenue without increasing marketing expenses. Focusing on existing customers reduces costs associated with advertising, lead generation, sales efforts, and onboarding compared to acquiring new customers.

2. Increased Revenue

A customer retention strategy leverages your understanding of current customers to drive cross-selling and up-selling. By analyzing the customer journey, product engagement, and interactions, you can tailor your program to your target audience. This enables you to predict which customers are most likely to add new products or services.

As customers invest more in your products or services, they become more committed, leading to long-term loyalty and repeat purchases. Existing customers generate more revenue over time than new customers, boosting their lifetime value (CLV).

3. Brand Advocacy

Who are the best sellers of your product or service? Your existing customers.

When loyal customers engage in marketing and brand advocacy, it significantly boosts your ability to attract new customers because it demonstrates that you provide lasting value and a competitive advantage.

Customers who strongly support you feel an emotional connection to your brand and product. As a result, customer advocacy and referrals result in a conversion likelihood four times higher than average.

How Can Personalization Improve Customer Retention?

So, we have established retention benefits - how can we improve your current state?

The first step is understanding what the customer wants. This knowledge allows you to personalize the customer experience and offer tailored benefits. According to a Forrester Benchmark survey, the expectation of loyalty personalization today exceeds 50% across three generations.

The second step is to identify and establish customer loyalty metrics. Measure this using metrics like customer retention percentage, customer lifetime value, customer engagement, sentiment, and Net Promoter Score (NPS).

The final step is obtaining the correct customer data to drive personalized marketing and engagement. The data sources should include information about your customers' product usage, interactions with customer support, brand engagement, and advocacy on social channels.

Effective personalization of your existing customers will result in the following:

Increased Customer Engagement

By prioritizing personalized engagement at every stage of the customer journey, from initial awareness to repeat transactions, you're maximizing the likelihood of sustained revenue growth for your brand.

Tailoring your customer loyalty program has the potential to slash attrition rates by 20% within the first year and boost engagement, with email open rates potentially soaring to 75%.

Improved Customer Experience

Personalizing the customer experience is key to making customers feel valued and unique. This connection is crucial for building emotional ties with the brand.

Tailoring content, offers, recommendations, and even considering personalization in mediums such as live chat demonstrates a genuine concern for your customers.

According to a McKinsey study, 76% of consumers are inclined to spend more or make purchases when they receive personalized experiences.

Increase in Loyalty

The most important takeaway from a personalized customer retention strategy is increased loyalty. Effective personalization helps elevate loyalty among customers who are more likely to buy and stay as happy customers over time. 

Implementing Effective Personalization Strategies in the High-Tech Space

Different methods of personalization are utilized to enhance individualized interactions: data-driven personalization, segmentation strategies, and the newer AI-driven personalization.

What does AI have to do with the High-Tech Industry

The choice of method depends on the organization's readiness to implement personalization; those in the early stages may opt for segmentation strategies, while more advanced programs may lean towards AI-driven personalization.

Despite their differences, these strategies share a common element in their approach, namely:

Collect and Analyze Data

To achieve effective personalization, it is crucial to collect and analyze quality data. Data-driven personalization, whether through machine learning algorithms or AI-powered recommendations, relies heavily on accurate data. Poor data leads to poor personalization. Therefore, ensuring the accuracy of the data and implementing the right data analytics platform are essential steps.

This not only enhances the quality of insights but also facilitates easier adoption across teams.

Use Personalized Content

One-size-fits-all content no longer works. Customers expect a unique experience, especially when they have shared their data and engaged with your brand.

Leveraging dynamic content creation based on your target audience and personalizing content on engagement channels is essential. The goal isn't to personalize all of your content but to focus on personalizing key moments to increase engagement.

This is the expectation in an AI-driven personalization journey.

The benefits of personalized contents on consumer behavior

Leverage Technology

Enhance your personalization strategy by going omnichannel. Equipping your product and marketing teams with the right personalization technology stack is essential for customizing the customer journey effectively. This includes tools for A/B testing, real-time data integration, and profile creation.

 In 2023, advancements in AI technology significantly enhanced personalization across various channels, utilizing chatbots, virtual assistants, and generative AI for dynamic content creation.

To meet your personalization needs and scale effectively, leveraging technology for an omnichannel approach is a fundamental requirement for any successful personalization strategy.

Continuously Monitor and Adjust

Personalization has evolved significantly, progressing from simple A/B testing and media personalization to subsequent page customization and AI-powered recommendations. The goal is to tailor each experience for every individual, but this is complex and requires regular feedback.

To achieve this, it's essential to have a solid customer retention strategy and the right metrics to monitor retention, growth, and churn. Focus on optimizing your content for your audience and targeting high-value segments. Regularly adjust and refine your strategy, too, to maintain its effectiveness.


Customer-obsessed companies have consistently shown better performance in terms of revenue, profitability, and customer retention compared to those that are not.

With the rise of AI personalization trends, customers now expect even more personalized experiences (hyper-personalization) and a greater value exchange.

By personalizing your customer retention strategy, you can improve ROI and strengthen customer relationships, leading to long-term sustainable value creation.

Chirag Deshpande
High-Tech Industry Lead

Chirag is a leader in digital and data-driven business strategy, marketing technology, and product development, with a strong track record of driving global growth for organizations for nearly two decades. He leads the High-Tech Industry vertical at Further and is recognized for his thought leadership and innovative approaches to driving solution adoption and value realization. In his free time, Chirag enjoys spending time outdoors with his family - exploring new adventure trails and activities.


Read More Insights From Our Team

View All

Take your company further. Unlock the power of data-driven decisions.

Go Further Today