The State of Customer Retention in 2017
A snapshot of customer retention in 2017: the subscription economy's rise, the growing customer success function and how businesses measured loyalty that year.
Acquisition had dominated marketing budgets for years, but 2017 was a year when a growing number of businesses started paying closer attention to what happened after the first sale. Here’s what that looked like.
The subscription model kept expanding beyond software
Subscription and recurring-revenue businesses, long the norm in software, kept spreading into categories that had never worked that way before: razors, meal kits, clothing boxes, even mattresses offered on a replacement cadence. Zuora’s ongoing Subscription Economy research, tracking subscription-business growth against the broader S&P 500, had been showing subscription companies growing revenue several times faster than traditional product sellers, and that gap kept the pressure on more categories to experiment with recurring models through 2017. The practical effect for marketers: churn, not just the initial sale, became a number the whole business watched.
Customer success became a distinct job, not a support afterthought
A noticeable shift in 2017 was how many companies, particularly B2B software, split “customer success” out as its own function separate from traditional support. Support existed to answer questions when something broke; customer success existed to proactively make sure a customer got value from what they bought, since in a subscription model a customer who never adopted the product was a churn risk regardless of whether they ever filed a support ticket. This wasn’t universal outside software, but the underlying logic (retention is an active job, not something that happens automatically after a sale) spread into other industries’ thinking about their own repeat customers.
Net Promoter Score kept its grip as the default loyalty metric
Despite ongoing debate among researchers about whether a single survey question could predict growth, Net Promoter Score remained the metric most businesses reached for when trying to quantify loyalty in 2017. Its appeal was simplicity: one question, a score leadership could track quarter over quarter. Its limitation, which more marketers acknowledged this year, was that a good NPS score told you customers liked you without telling you why, or what specifically to fix.
Loyalty programs got more personalized, not just more generous
Rather than simply adding more points or bigger discounts, retailers spent 2017 experimenting with loyalty programs that used purchase history to personalize offers, following the template Starbucks had set with its 2016 rewards revamp tying rewards to spend rather than visit count. The bet was that a relevant, individually tailored offer retained a customer more effectively than a generic blanket discount available to everyone.
What this meant for a typical business
If you ran a subscription or repeat-purchase business in 2017, the state of the field pointed toward three practical moves: track churn as seriously as you tracked new signups, treat onboarding as a retention lever rather than a one-time formality and use whatever purchase data you had to make loyalty offers specific rather than generic. None of that required cutting-edge technology. It required treating the customers you already had as seriously as the marketing team treated the ones it was still trying to win.
