10 Customer Retention Strategies That Actually Work

Reading Time: 8 minutes

Finding new customers is undeniably essential for every business. This is what will drive revenue generation. But for growth and sustainability, it’s crucial to deliver experiences that foster customer loyalty.

As a company, you must learn how to retain customers and engage them in ways that encourage repeat purchases. You must also successfully cultivate brand affinity so that your customers are more likely to influence others to support you as well. The best way to achieve these goals is to employ a combination of proven customer retention strategies.

What are customer retention strategies?

Customer retention strategies are policies and initiatives that businesses follow to nurture relationships with their customers. These initiatives are meant to keep customers buying and prevent them from switching to other brands.

Ultimately, a successful customer retention strategy will promote customer loyalty and maximize customer lifetime value. This leads to sustainable profitability since retaining customers is cheaper for a company than acquiring new ones

Why customer retention strategies are important 

Employing a well-planned customer retention program can grow your business and guarantee its long-term success. Here are some of the most valuable benefits of keeping customers loyal:

• Higher revenue. On average, businesses get 65% of sales from existing customers. And, customers spend much more on subsequent purchases than on their first interaction with a company.
• Lower business costs. Customer retention tactics are seven times cheaper than strategies to acquire new customers. 
• More effective customer acquisition. As much as 86% of your loyal customers will recommend your business to their networks and provide you with new leads that are fairly easy to convert.

To gain these benefits, however, you need to use the best customer retention strategies specifically intended for your audience.

Customer retention strategies

How to improve customer retention will be different for every business. You need to consider your industry, brand, and audience before employing ways to retain customers. Nevertheless, here are some proven-effective retention strategies for customers of retail and service businesses alike:

1. Slash customer response times

You know why live chat is the top-rated customer service method?

Simple:

Because it’s the fastest one.

In customer support, the speed of responses is critical, and this rule applies to every support channel you’re using (email, live chat, phone, etc.). In fact, customer service is what keeps 56% of customers loyal to brands.

Consider these tips to speed up customer support:

Add a live chat function to your website

Live chat enables you to address customer apprehensions at the point of sale, helping to boosts conversions. Beyond that, it helps customers feel taken care of, making them more likely to come back to your company for their future purchases.

Here’s a good example from UK’s tech and appliances retailer, Currys:

Currys takes live chat to the next level by allowing you to go on a video call with a product specialist and ask all your questions before you check out. This makes customer service not only more personal and human but also fast and very accessible.

Provide time estimates for problem resolution

Letting your customers know how long it might take to address their concerns helps manage their expectations. Doing this also gives you good opportunities to show that you fulfill your promises and that you’re always on time. 

Here’s a good example from American adventure wear retailer, Huckberry:

Huckberry sends out emails to manage customer expectations about when to expect refunds. Knowing that refunds can take up to seven business days puts customers’ minds at ease and minimizes follow-up calls to support teams.

Automate as much as you can

Automation reduces your workload while giving your customers instant access to the information they seek. You can do this by publishing detailed self-help pages and using chatbots to help customers navigate through FAQs.

Here’s a good example from American retail giant, Walmart:

Walmart has organized an easy-to-understand FAQs on its website. For extra help, it uses a chatbot that determines what every customer needs and provides instant answers to their queries.

2. Deliver pleasant surprises

Emotions are the most significant drivers of loyalty. That’s why 60% of customers use emotional language when describing their connection to their favorite brands. 

Your business can generate positive emotions by surprising customers with exclusive gifts and special offers. Consider these ideas:

• Deliver handwritten notes. Customer service doesn’t get more personal than a note written specifically for each customer creating good unpacking experience.
• Send birthday gifts. Be the brand that makes your customer feel loved and appreciated on their special day.
• Offer service upgrades. Treat loyal customers to special features that others would need to pay for.
• Share their social media posts. Your customers feel recognized and appreciated when you unexpectedly repost their photos and stories on your brand accounts.
• Invite them to exclusive events. Letting customers take part in limited-access sales and parties is an incredibly effective customer retention technique for your most valuable buyers.

Spalding does this very well through its MVP program where members receive birthday emails containing special discounts they can use within 30 days.

‣ Learn more about how to increase customer retention by delighting your customers on their birthday: Birthday emails – Tips and best practices

3. Start a customer loyalty program

Enabling buyers to earn rebates or other forms of rewards for their purchases is one of the most effective ways to increase customer retention. In fact, 81% of shoppers say that customer loyalty programs encourage them to spend more on a brand.

When you start your own loyalty program, make it easy for your customers to join and give them several ways to earn points.

Here’s an excellent example from clothing retailer Chubbies Shorts:

‣ Build an awesome loyalty program: 5 tips for building a successful customer loyalty program

Keep in mind, however, that you can’t foster customer loyalty through a customer loyalty program alone. You need a customer retention plan involving a combination of strategies to get ahead of your competitors.

4. Share customer reviews

Trustworthiness is the top emotional factor that drives loyalty in 84% of customers. Among the most valuable trust signals are product reviews. Giving reviews prompts customers to reflect on their experiences with your brand and publishing them encourages other shoppers to buy. 

Setting up a system for a consistent supply of genuine customer reviews is an excellent retention strategy for customers of ecommerce stores and even clients of service-oriented businesses. Among the best ways to do this is to set up automated workflows that send out review request emails for every purchase.

Here’s a good example from Target:

This email makes it easy to leave a review and the “Help others” header makes it clear that the review will be shared with other shoppers. It also takes the opportunity to resolve any issues the customer might have had with their shopping experience.

5. Send customer retention emails

Email marketing plays a critical role in customer retention programs because it is cost-efficient but delivers incredible results. In fact, research shows that email is the most popular platform for retaining customers.

Consider these types of retention-oriented email marketing campaigns for your brand:

• Thank-you emails: A note of thanks can go a long way in making customers feel appreciated.
• Personalized recommendations: Using shopping history to deliver relevant recommendations is an effective way to encourage subsequent purchases.
• Exclusive offers: Even simple incentives can be enough to prompt shoppers to check out.
• Re-engagement emails: Sometimes, a little nudge is all it takes to get customers browsing again.

Here’s an example from Crate & Barrel containing product recommendations based on the recipient’s purchase history. This makes customers more likely to complete a subsequent purchase.

‣ Discover how to use email campaigns for maximum business impact: Ultimate guide to email marketing

6. Personalize customer support interactions

Customers appreciate being recognized, especially during customer support interactions. They want you to know their purchase history and other relevant details that enable you to deliver personalized service.

To achieve this, give your support team access to all the data they need to deliver personalized service. Although privacy shouldn’t be taken lightly, shoppers are generally open to businesses tracking and storing information that helps enhance the customer experience.

‣ Discover the value of personalized service: How ecommerce personalization can increase customer loyalty and boost sales

7. Get feedback with email surveys

Customer satisfaction surveys are useful for getting an accurate picture of how happy your customers are with your service. The most efficient way to send out and receive such surveys is through email.

For maximum efficiency, set up an automated workflow to ask customers about recent interactions with your business. Send them out for customer service interactions, shopping experiences, etc.

Here’s a good example from Dropbox:

When trying to get feedback through email, make it easy to send responses. And when you receive them, make them count. Continue with what customers believe you’re doing right and improve on things they may not have liked.

8. Learn from customers’ complaints

No matter how well you run your business, you will inevitably receive complaints about your products and services. You might get these through direct calls to your company, feedback emails, or even social media comments. No matter where you receive them, treat them as valuable sources of insights to improve your brand.

Making your customers feel heard and letting them know that you exist to serve them is a crucial part of any client retention program. So, whenever you make changes to resolve an issue pointed out by a customer, be sure to let them know you appreciate their feedback and thank them for their contribution.

Here’s an example of a business representative thanking a customer for pointing out an issue over social media:

9. Create educational content

Provide relevant and valuable content to your customers. This keeps them engaged, highlights your helpfulness, and establishes you as an expert in your niche.

Consider making how-to articles and videos to explain how to use your products. You can also maintain a blog and email newsletter to discuss topics your customers care about. 

When developing your content strategy, focus on educating customers at each stage of the buying process: awareness, consideration, and advocacy. Doing so will maximize engagement and help move them along the cycle.

Beardbrand is one of the most notable companies that has mastered content creation. Among the most important customer retention ideas you can learn from them is to create unique, valuable, and actionable content. Additionally, be consistent with your brand personality and customize content for every platform.

‣ Learn how to use email newsletters to drive traffic to your blog content: Email newsletters: best practices

10. Engage on social media

Recent data reveals that 64% of consumers want brands to connect with them and social media is the perfect platform to do so. 

The best strategies to retain customers include robust social media campaigns that engage your followers and create a sense of community around your brand. This means sharing customer-generated content, responding to their comments, commenting on their posts, etc.

Premium nail products retailer Nailboo is a company that has mastered how to engage customers on social media. Check out this example on their Instagram page:

Nailboo asked for comments and responded when they got it. And, their reply was far from generic. It was a direct and personalized response to the follower using a tone that’s recognizably on-brand.

Customer retention strategies: Summary

No matter the nature of your business, the best ways to retain customers involve providing excellent customer experiences across different channels. 

This will enable you to focus on building relationships with your customers, paying attention to their needs and preferences, and finding ways to make them feel appreciated. Ultimately, your customer retention strategies are what will drive profits and sustain business growth.

Special thanks to our friends at Omnisend for their insights on this topic.