customer retention strategiesCustomer retention has become a top priority for marketers and salespeople. The rise of ecommerce has made for an increasingly competitive marketplace, which means retaining customers has become just as, if not more, important as acquiring them.

In order to retain customers in the future, you’ll need to provide them with more than just good products or services: you’ll need to deliver an experience that they can’t get anywhere else.

This blog post shares seven effective strategies guaranteed to retain your customers.


So, what is customer retention?

Customer retention is a collection of methods a company uses to maintain repeat relationships with its customers. Examples include creating an environment that is inviting, providing incentives like discounts or free items, and personalizing communication throughout the customer journey.

Customer retention strategies are designed to achieve that goal and can be as creative and innovative as the company desires. What matters most is that they have a measurable impact on both current customers’ profitability and future business prospects.


Why Customer Retention Is Important

For any company to thrive, it needs repeat customers. Whether your business is selling a product or providing a service, customer retention can be the difference between success and failure.

It’s been proven that focusing on customer retention provides dividends. Research shows that companies focusing on customer retention have:

  • Found loyal customers are 5x more likely to repurchase & 7x more likely to try a new offering. One customer experience agency found loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.
  • Positively benefited from brand ambassadors. Research estimates that around 60% of loyal customers talk about their favorite brands to their family and friends. This word of mouth marketing attracts new customers by selling your value proposition for you, and is a significant reason why customer retention is so important for businesses.
  • Increased their bottom line. Customer retention is important for any business to make a profit. Data shows that increasing customer retention by 5% can increase profits anywhere from 25%-95%. Existing customers can also provide 65% of a company’s revenue, so it pays off in the long run and with little effort on your part to keep them happy.


When to Focus On Customer Retention

The stage your business is in will impact how heavily you should focus on customer retention.  A good rule of thumb is to identify which of the below five stages your business falls into, and then use the advice as a guide:

  1. Just started: As a new business, your main focus should be on attracting initial customers. Focus solely on strategies and tactics that enable you to grow your customer base.
  2. Picking up traction: You have an initial customer base and you’re making sporadic sales. This is a good stage to begin retention efforts that encourage your customers to buy more. An example could be email campaigns encouraging repeat purchases from customers.
  3. Consistent seller: Your sales are consistently increasing. At this point, you can begin to mix in more retention strategies alongside your acquisition efforts. Examples could include referral and/or loyalty programs.
  4. Firmly established: As an established business you now need to find new ways to grow. Retention strategies introduced in this stage can influence customers to purchase more, and more often, which provides boosts to their LTV (lifetime value). Retention efforts at this stage should be considered and well implemented.
  5. Well-established: As a well-established business you are likely to have a plethora of marketing automation and processes already in place, so now is the time to focus heavily on customer retention.


Understand How Retention Fits in With Your Business

It can be hard to choose the right strategy for your business. Do you focus on attracting new customers or retaining old ones? As it turns out, there is a lot of overlap between these two strategies.

Retaining an existing customer leads them to spend more and buy higher value items each time they shop with your store. And if that isn’t enough, those returning shoppers are likely coming back because they’ve had good experiences in the past so their likelihood of shopping again is already high.

This means investing efforts into retention pays off twice over: by having higher order values as well as high retention rates – but only when done strategically.

A store’s customer lifetime value (CLV) also has a significant impact on how it should approach a retention strategy. For example, stores that sell electronics usually have customers who have medium purchase frequency with a high purchase value, so they have a lot to gain from a solid retention strategy. However, those selling mobile phone cases will have a lower purchase frequency with a low item value so retention won’t be the best strategy to focus on.


7 Actionable Customer Retention Strategies You Can Start To Implement Today


Provide the Best Customer Experience You Possibly Can

Outdoing expectations, exceeding customer needs, and proving your worth is a crucial part of success in today’s competitive market.

It’s important that your company keeps its customers happy across all channels, including in-person and online interactions with them. Your employees will want to make sure they’re listening carefully so they not only take care of the issue quickly, but they build rapport with the customer with friendly conversation – it’ll be more personalized this way, too.


Track Churn Metrics and Signals as Closely as You Can

Why do customers churn? There are many reasons that a customer may choose to leave your company, and understanding these will help you reduce the number of people who decide to take their business elsewhere.

Customer Churn Analysis helps stores analyze qualitative and quantitative signals from current clients (and potential new ones) so that you can better understand how best to keep them happy with what you’re offering – which in turn makes it more likely for other customers to follow suit.

By tracking churn metrics you may be able to save customers from leaving you. You can do this by looking at two key sets of data. First are performance-related metrics such as declining repeat purchases, or frequency of purchases. The second involves looking at the customer journey and gaining insights into how each touchpoint is performing.

The ideal situation involves you identifying a recent customer whose frequency of transactions has dropped over the past few weeks and has just given an NPS (Net Promoter Score) score of 5. This type of customer is likely to churn. If you can get this data, and use it accordingly, you could potentially stop many customers from leaving.

In the example above, you could send the customer a follow-up email asking what made this specific experience bad and offer a discount off their next purchase as a gesture of goodwill.


Use Ecommerce Automation Where Possible

Recent research has revealed that trigger-based emails have, on average, a 5x higher open rate and 15x higher click-through rate than other types of marketing campaigns, which means there is an opportunity to cultivate relationships with your audience when they are at their most engaged.

The trick to striking at the right time is by leveraging the power of email automation so that the right email is sent at the right time. Getting this timing has the potential to strengthen relationships, reduce customer churn and capitalize on opportunities such as reactivating inactive customers.

A nice example of this is Birchbox. After the user has signed up, it sends a welcome email, using this opportunity to find out more about the subscriber and how it can tailor emails to their needs.

A series of automated emails then follows this up: nothing product related at first, just helpful advice on beauty tricks, makeup tips, and then some special offers to hopefully drive transactions and loyalty.

Layering automated emails with information from your database, such as a customer’s interests, will enable you to create personalized emails for an extra layer of effectiveness when compared to a generic email campaign. Of course, emails are only one aspect you can automate, there are other areas you can consider such as the use of AI in the customer journey, automated chatbots, and more.


Deliver Highly Personalized Experiences

Eighty-two percent of customers are more likely to share their information with companies that can provide a personal experience tailored specifically for them.

One way retailers can better connect consumers is through the use of Customer Intelligence Platforms (CIPs) which allow businesses to collect, analyze, and act on customer data in order to make personalized offers that will meet each individual’s needs.

The unique, analytical view of their customers that CIPs provide businesses with enables the business to identify who is visiting the website and what other online behavior they have engaged in. Businesses are then provided with actionable advice on how to interact more effectively by promoting offers that would be most relevant to those specific visitors, and personalizing the content delivered.


Implement a Customer Loyalty Program

With a loyalty program – often called a customer retention scheme – it’s like you and your customers are in partnership. You give them something they value: a reward, and that motivates them to return more often. The customer gets the satisfaction of having accomplished their goal while receiving what they really want from you: great products.

Meanwhile, the investment on your end pays off with repeat business from loyal shoppers who shop at higher frequency rates now than when there was no incentive for returning purchases.


Create a Customer Feedback Loop

A customer feedback loop is an essential part of retaining customers because it provides your business with an opportunity to collect and analyze potentially negative customer feedback that could be driving customers away from your business.

Reviews, surveys, and focus groups are all ways to collect customer feedback. In addition, using different methods of feedback collection should provide comprehensive data that can be best used across the whole business to decide where, and how best, to allocate resources in order to alleviate problems.

For example, sending product reviews that highlight potential product design issues could be sent to development teams who are then able to proactively begin to work on solutions. By using a feedback loop, your business is best positioned to quickly and efficiently address criticisms and resolve faults to keep customers feeling seen, valued, and happy.


Use Surprise Reciprocity to Delight Your Customers

Reciprocity is a social construct with an easy concept: people respond based on how they’re treated. When someone is treated nicely, they typically return the favor in kind.

Research has shown that while reciprocity works effectively on its own, it’s actually more powerful when it’s least expected. Brainstorming some ways to surprise customers, either by providing them with special attention or gestures of kindness, can be a particularly emotive way of promoting customer satisfaction and retaining happy customers.



Customer retention is essential to any business. In our article, we covered the seven main customer retention strategies that can help you keep loyal customers and lower costs associated with acquiring new ones.

These customer retention techniques will not only make your company more profitable in the long run but also ensure a successful boost of customer AOV (average order value) and LTV (lifetime value), which is vital for a business’s revenue.


About the Author – Hannah leads Marketing and Business Development at Zeotap, the home of the next-generation Customer Data Platform. Zeotap empowers brands to unify, enhance and activate customer data in a cookieless future, all while putting consumer privacy and compliance front-and-center. Recognized by Gartner as a “Cool Vendor”, it works with over 80 of the world’s top 100 brands, including P&G, Nestlé and Virgin Media. It is also the founding member of ID+, a universal marketing ID initiative.

Prior to joining Zeotap, Hannah led the Marketing and SDR functions at Yieldify, a martech company selling CRO solutions to ecommerce businesses in the US, UK and Australia. She started her career (after a detour teaching English in Japan) at Weber Shandwick and Nelson Bostock, working with companies including Samsung, Canon and HTC on global communications strategies before jumping ship to startups with a product marketing role at Monitise, a mobile banking business since acquired by Fiserv.


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