5 Things to Change Now to Improve Customer Retention in 2025

Customer success is essential for any startup, at every stage. It’s what ensures customers are engaged, adopting, and gaining value from your product. But many startups get customer success wrong. This is partially due to a lack of understanding about how to design customer success, but also due to a lack of understanding of the goals of your customers. 

I once asked a startup CEO, What do customers get out of your product? He wasn’t sure, which was interesting, but not uncommon for an early-stage company figuring out product-market-fit. More important were his mistakes. He was not asking customers what they measured, and he was not measuring actual results based on that. As a result, unfortunately customers were churning.  

Here are five things startups often get wrong about customer success, and what you can do to stop churning through new customers and start building long-term relationships with die-hard fans.

1. Not defining customer success

This refers to the goal of bringing success to customers. The first step to customer success is defining what it means for your company. What are the key metrics that you’ll use to measure success? How will you know when a customer is successful? Once you know what customer success looks like, you can start to develop strategies to achieve it. Namely, figuring out your return on investment and talking about it.

2. Not having a dedicated customer success team

Customer success is not something that you can do on the side. It requires a dedicated team of people who are focused on helping customers achieve their goals. It is true that customer success is everyone’s job, but the roles and responsibilities of engaging in the customer journey have to be assigned. The customer success team should be responsible for anything from onboarding new customers, providing training and support, proactively monitoring trends and data, and overseeing renewals and expansions. Early-stage companies may struggle to afford full-time resources, so fractional and part-time hires are now more common.

3. Not measuring or understanding customer success

If you’re not measuring customer success, you can’t improve it. Additionally, you need to understand what you measure. Track key metrics like customer retention, churn, and customer engagement. This data will help you identify areas where you need to improve and also are important measures of your product-market fit.

I once talked to a CEO with a high net revenue retention rate (over 130 percent), but a gross revenue retention rate of about 75 percent. This was a huge red flag for me, and indicated a churn problem, without knowing anything about their customers. The CEO acknowledged the NRR was high due to a very high-revenue customer, but he was not too worried about the churn. I saw a bigger issue–unmanaged churn across the base, and one customer who could take the whole company down. Taking time to understand the impact of each metric is just as important as tracking it.

4. Confusing customer success and customer support

Probably the biggest mistake companies make is confusing customer success with customer support. Customer success is about more than just solving problems. Rather, it is a way to proactively monitor and predict customer issues. This is often mixed up with being a problem-solver, which is reactive in nature. Some customer-facing work will always be a little reactive, but just-in-time needs like how to log in, troubleshooting a bug, or other similar issues should be managed by a focused and process-based support team. Support is an essential function as well, and when you separate it from the work of your customer support managers, you provide them an opportunity to be truly strategic and not just react to problems all day.

5. Hiring a leader to solve your customer retention problems

A new leader will not solve your customer retention problems. This will require a full company effort, product-market fit, stability, and yes, a customer focus. New leaders with annual or longer contract customers especially need longer periods to realize results. Consider a customer pool with three-year renewal cycles, there may be a year with very high renewals and another with few to none. A leader with limited tenure may not make a dent in the pool, or be able to provide value to the process, without having enough of an opportunity to impact it. A good leader will also take time to learn from the data, understand churn trends (which unfortunately requires churn), and learn from past mistakes. Shorter tenures and lots of leader switching just don’t lend well to this. 

Customer success is more than a team, it is a company goal and one you need to understand well. This means providing exceptional customer experience, from human to product, and ensuring you understand what your customers value. Avoid the pitfalls above to drive more robust customer-focused practices and lead with proactive success.