14 Proven Customer Retention Strategies To Learn & Copy (2024)

If you don’t have time for guessing or are in need of reliable ways to improve customer retention without trial and error, you are in the right place. 

This expert-level guide will list experience and data-backed strategies you can implement. By the end of this read, you will have what it takes to build a loyal customer base that adds lasting value to your business.

Let’s get right to it. Cover photo via Mike Moloney on StockSnap.

How Can You Calculate Your Customer Retention Rate?

Your customer retention rate will help you measure how effective your customer retention strategies are. Simply put, it will let you see how well your business is doing in keeping its customers over a specific period.

With it, you can find key areas in your strategy you need to improve on to help you make decisions based on proven data.

Here’s how you can calculate the CRR:

Let’s create a scenario to make this formula easier to understand:

• Customers at the beginning of Q1: 1,000
• Customers at the end of Q1: 1,200
• New customers: 300

Now let’s put this information into the formula:

• Customer Retention Rate (CRR) = (No. Of Customers at the End of a Period) – (No. Of New Customers Acquired Over That Time) / (No. Of Customers at the Beginning of the Period) x 100
• CRR = {(1,200 – 300) / 1,000} x 100
• CRR = (900/1,000) x 100
• CRR = 0.9 x 100
• CRR = 90%

Is 90% CRR good?

• Generally, this is considered very good. Typically, a CRR above 80% is excellent, showing that you have loyal customer loyalty and effective retention strategies. Reinforce strategies that have contributed to high retention rates.
• CRR between 60%-80% says that you have decent retention efforts but also has room for improvement. This means you have to personalize your offers and be more proactive with your support. 
• CRR below 60% tells you of potential issues in customer retention strategies that require your immediate attention. If this happens, you need to thoroughly review customer feedback and update your retention strategies immediately.

14 Best Customer Retention Strategies To Implement This 2024

You don’t have to implement all the strategies at once. As you go through each strategy, consider if it aligns with your current goals and resources. Whatever fits the closest, implement that first. 

1. Create A Customer Feedback Loop For Loyal Customers

This process goes beyond standard surveys, focusing on personalized interactions to learn how you can make your customers more satisfied and loyal. Here’s what you can do:

• Use direct contact, reviews, and surveys to gather feedback. Encourage your customers to share their thoughts and experiences through email, SMS, social media, and live chat.
• Dive deeper into their feedback through a more detailed survey or follow-up questions. Send them follow-up emails with additional questions or conduct phone interviews.
• Identify if the problem is a one-time occurrence or a recurring issue. Analyze patterns in the feedback to pinpoint systemic issues.
• Decide the best internal and external solutions to resolve the issue. Create action plans like improving product features or enhancing customer service protocols.
• Use automated systems to solve simple problems quickly. Implement chatbots or automated email responses for common issues.
• Inform your customers about the actions you took. Let them know how their feedback created improvements.

A Brand That’s Executing This Strategy Well 

Glossier, a skincare and beauty brand, actively engages with its customers through various feedback channels–email, social media, and its website’s live chat feature. For example, they actively respond to clients on Instagram whenever they ask about stock availability telling them what products are most in demand. 

2. Offer a Personalized Customer Experience

If you think “Hi [First_Name]” in an email is sophisticated personalization, we’re here to tell you that we’ve come a LONG way from that. More than personalized emails, customers expect and prefer an entirely personalized shopping experience. So personalize every touchpoint of the customer journey.

Here are ways you can do this:

• Map the customer journey to find touchpoints where customers are disconnecting from the buyer journey and identify drop-off points too. Create easy quizzes to know what to recommend. 
• Use location-based personalizations–recommend physical store locations that are in your customer’s area. Take advantage of geolocation data for targeted recommendations.
• Tailor the live chat feature (customize chat scripts and responses) on your website and social media platforms based on customers’ shopping and online behaviors.
• Offer relevant product recommendations based on purchase history, preferences, or first-party and zero-party data. 

A Brand That’s Executing This Strategy Well

Warby Parker comes with a frame quiz that identifies the user’s features so they can recommend the right glasses for them. 

3. Ace Your Customer Service Game

Acing your customer service game means consistently providing outstanding experiences that go above what customers expect. This includes promptly responding to questions (less than 24 hours if possible), solving problems before they become big issues, and being empathetic when customers have concerns. Focus on building strong relationships and fixing problems well to keep your customers happy.

4. Integrate Fast & Efficient Deliveries

Integrating fast and efficient deliveries starts with streamlining your logistics, making sure orders are processed as soon as it is made. This entails having a well-organized warehouse and using reliable shipping partners to limit delays. 

Another key aspect is making sure that deliveries are consistent and reliable. Set realistic delivery timeframes and meet them consistently. Addressing any issues promptly on delayed shipments or damaged goods in 3-6 business hours. This tells customers that you value their time and their business. 

To do these:

• Offer real-time tracking updates to keep customers informed.
• Use route optimization software to determine the best delivery routes and minimize delivery times and costs.
• Identify key locations for your warehouses to make deliveries faster.
• Offer quicker delivery choices like same-day or next-day delivery.

A Brand That’s Executing This Strategy Well

Puma uses ClickPost to ensure timely, efficient deliveries. This software offers end-to-end logistics solutions using AI-enabled engines and has integrations across multiple eCommerce platforms and 150+ courier companies.

5. Create A Positive Return & Refund Experience

Create clear, easy-to-understand, and hassle-free return policies. Provide multiple return options like in-store drop-offs or prepaid shipping labels, to accommodate your customers’ preferences. This will make them feel supported and empowered when initiating a return.

Once a return is initiated, prioritize prompt processing and communication, in less than 24 hours if possible. Keep customers updated on the status of their return and refund through email or text notifications. You can also consider going above and beyond by offering flexible refund options, like store credit or exchanges.

6. Make Sure That Branding Is Consistent Across Platforms

Consistency across all platforms starts with keeping a uniform visual identity, messaging, and tone across your website, social media, emails, and physical locations.

This extends to the customer experience you deliver. Make sure that the quality of service, product offers, and customer support aligns with your brand promise across all touchpoints. This reinforces your brand’s reliability and reinforces a positive perception in your customers’ eyes. Over time, this consistency builds a strong brand recognition of being dependable and giving off an enjoyable experience.

To do this:

• Make sure you use the exact same logo, with consistent sizing and placement, on your website, social media profiles, email signatures, and physical signage.
• Develop a brand voice guide outlining your preferred style, vocabulary, and demeanor for written and spoken communication to make sure you have a unified voice across customer service interactions, marketing campaigns, and social media engagements.
• Use your brand’s designated colors, fonts, and imagery consistently across all marketing materials, including advertisements, product packaging, and digital content.

A Brand That’s Executing This Strategy Well

With healthy beverage brand Poppi, whether you visit their website, their social media channels, or sign up for their email newsletter, you’ll find the same style, tone, fonts, and messaging. If you notice, there’s always a pop of colors in each element but because they made only 2 colors dominant, they kept a consistent look and feel. 

7. Build A Loyal Community Using Social Media

This involves actively engaging with your audience to build meaningful connections by consistently posting relevant and valuable content or asking questions, running polls, and responding promptly to comments and messages. 

We can write an entire book on this but for now, let’s focus on the following 5 areas to get started:

7.1 Use Interactive Elements

Host giveaways, polls, quizzes, and surveys to engage your audience. For example, run a weekly giveaway where participants share your post to enter to boost engagement and reach.

7.2 Launch Fun Contests & Exclusive Promos

Launching exciting contests and limited-time promotions. Offer a discount code to customers who share a photo of themselves using your product to encourage them to participate.

7.3 Create Engaging Content

Instead of just promoting, connect with your audience on a personal level. Post about topics they’re passionate about, like sharing tips about your industry or asking for their opinions on upcoming product features.

7.4 Share User-Generated Content (UGC)

Feature customer photos, reviews, and videos to build trust and authenticity. For example, highlight a customer’s glowing review and how your product solved their problem to inspire confidence in potential buyers.

7.5 Introduce Referral Programs & Gamification

Implement a referral program with rewards for customers who refer friends. For example, offer a discount on their next purchase for every friend they successfully refer, creating a win-win situation for both parties.

8. Set Clear, Realistic Expectations

Whether it’s getting feedback from your customers, offering swift delivery services, or listing the benefits of your products, don’t promise something if you can’t deliver it. 

Here are the general steps to remember:

• Make sure your customers understand what they can expect from your products or services with a clearly described value proposition. Communicate your product’s or service’s benefits clearly on all platforms.
• Gather and respond to customer feedback promptly (as discussed in #1). Use this feedback for product/service improvement.
• Listen to customer complaints and address issues swiftly to maintain trust. Respond to their messages and concerns via emails and social media quickly and effectively.
• Deliver on promises and keep your commitments to build loyalty. Consistency is key.
• Monitor your performance and regularly elevate your efforts based on your findings. Use analytics to track progress.
• Use feedback to enhance your strategies and continuously learn and improve. Implement changes based on your customer’s input.

9. Use Effective Email Marketing Strategies

Engaging and personalized emails can help you nurture your customers. From welcome emails to milestone emails, everything should be set up to nurture leads with a high CLV. To do this, you need to: 

• Make it easy for customers to reach out to you. Provide a visible contact card or contact information. Give them multiple contact options.
• Keep messages clear and to the point. Avoid clutter.
• Use testimonials to build social proof and trust. Share success stories on all platforms.
• Encourage prompt action by creating a sense of urgency. Make use of time-sensitive offers.
• Use engaging and eye-catching media and pitch decks to capture your audience’s attention.
• Provide value with each email you send by making sure your content is highly relevant, something they can take action on.
• Make it easier for your customers to take the desired action, such as with one-click CTAs.
• Grab their attention with a compelling and catchy subject line to increase open rates.

10. Implement Omnichannel Marketing Strategies

It’s vital for you to integrate various channels, such as email, social media, and brick-and-mortar stores, to offer your customers a cohesive and consistent customer experience. As a result of this experience, your customers will continue doing business with you for a long time. 

To effectively implement this strategy, you must focus on ensuring consistency across all platforms and communication mediums.

A Brand That’s Executing This Strategy Well

A great example of the integration of omnichannel marketing comes from Target’s partnership with Pinterest.

The brand has added the Pinterest Lens into their app, which allows customers to take a picture of something they like and get recommendations for similar products at their store. You can take from their example to partner with relevant brands that can help you create a cohesive shopping experience for your customers.

11. First Impressions Can Make or Break It

One of the best ways to create a lasting first impression is through your web design. From attractive visuals to speed and navigation, everything should be relatable, convenient, and easy for your customers. Work with experts to redesign your website and mobile-optimize it to increase returning visitors by 28.95%.

Focus on creating a strong first impression through your website design. Make sure your site or online storefront is fast, easy to navigate, has trust badges, aligns with your branding, and is visually appealing. 

A Brand That’s Executing This Strategy Well

Fortune Restoration offers property restoration services for Byzantine-inspired buildings. This is easily noticeable with the luxurious purple color and font they used. They also make it easy for visitors to trust their services by adding trust badges. 

12. Consider Implementing A Subscription-Based Model

Subscription-based models let you create meaningful relationships with customers that extend beyond profitability. It offers brands the benefits of recurring revenue and increased customer engagement. Introducing a subscription service could translate into lasting customer relationships and recurring revenue for your business.

13. Offer the “Buy Now, Pay Later” (BNPL) Payment Option

The BNPL payment option lets you attract new buyers and build long-term loyalty with your existing customer base. These flexible payment terms entice customers to make a bigger-than-intended purchase and keep coming back for more in the future.

A brand that’s executing this strategy well

In August 2020, Apple teamed up with Affirm, a BNPL provider, to offer their customers more flexible financing options for Macs, iPads, and iPhones. This payment option improved customer loyalty among the brand’s audience.

14. Keep Things Interesting

Your brand is not the only one trying to engage with your audience, grab their attention, and turn them into qualified leads or conversions. Chances are that your customers are interacting with countless other brands, including your competitors daily. 

Surprise your customers with unexpected perks like personalized thank-you cards, complimentary gifts, or free upgrades.

Are Customer Retention Strategies Crucial for All Businesses?

YES! Regardless of your industry or the size of your business.

As you go over the following benefits of efficient customer retention strategies, you’ll find at least one—in addition to increased profitability—that’ll make your efforts worthwhile:

1. It Automatically Increases Engagement

Customer retention is all about knowing what your customers like and dislike. This automatically means that conducting a customer retention analysis will improve your buyers’ journey at every single stage of that sales funnel. With this, you can easily fine-tune your offers to meet their changing demands.

2. You’re Better Equipped For Innovation

Your efforts will automatically land you a base of loyal, satisfied customers. With these people who share their thoughts, you’ll have the freedom (and peace of mind) to innovate and develop new products. 

3. It Decreases Customer Churn

Customer churn–when your customers stop using your products or services is costly. competitors, poor product quality, or low-quality customer service. 

A high churn rate means a slower growth rate and a sales team that’s tied up in finding out what went wrong. Since customer retention ensures all your customers are happy and satisfied for a long time to come, you can easily reduce churn by focusing on retention.

4. You’ll See An Increase In Your Profits

Your loyal customers will likely spend more on your products and services in their lifetime. 

They’ll renew subscriptions, try new products, and, eventually, branch out because existing customers are 50% more likely to try new products and they spend 31% more than new customers.

Since customer retention is all about encouraging repeat purchases and retention, most (if not all) of your customers will have a higher overall lifetime value. This means higher profits for your business.

5. It Increases Referrals & Builds Loyalty

Word-of-mouth marketing is incredibly powerful. 20-50% of all buying decisions are influenced by it and 92% of shoppers trust recommendations from their friends and family over other forms of advertising.

This means that effective CR strategies will organically increase referrals and build a loyal community for your brand.

Avoid These 5 Common Pitfalls To Improve Customer Retention

The goal here is not to scare you away from implementing retention strategies. These are the things you need to be aware of so you can better prepare your strategies and learn how to fix the problems that come along the way. 

1. Not Aligning Your Retention Strategies

Customer retention strategies, like any other marketing strategy, should be consistent and aligned with your overall values, vision, and goals for the future. Otherwise, it will cause conflicting outcomes, actions, and messages.

Make sure that you have a clear strategy, mission, and vision for retention and that your entire team is aware of the same. Make sure you communicate with all stakeholders.

2. Steering Clear Of Innovations

Another common pitfall is failing to adapt to the customers’ changing expectations, preferences, and needs and sticking to the same retention practices. This decreases customer loyalty, satisfaction, and attention—especially if another brand is fulfilling their needs and requirements to a T. 

To avoid this pitfall, you’ll need to constantly add new value, benefits, and features and improve your offers, services, and products by integrating innovation into your customer retention strategies. Evaluate competitors’ actions, customer feedback, and market trends, and adjust your strategies accordingly.

3. Relying Heavily On Intuition & Assumptions

Relying on outdated data, intuition, or assumptions will let you lose your competitive advantage, missing trends, and repeating mistakes. To do this, analyze your retention data using analytics tools, AI sales tools, feedback forms, interviews, and surveys.

4. Not Measuring The Results Of Your Efforts

More than just evaluating your customer acquisition strategy’s performance, you should also assess your retention efforts results. Take advantage of net promoter score, customer lifetime value, churn rate, and customer retention rate to measure your retention to understand what influences your buyers’ behavior.

5. Not Knowing Or Engaging With Your Customers

Not all customers are the same. Your customers will have varying feedback, behaviors, preferences, and needs. Not considering these differences makes you miss opportunities, deliver poor services, and irrelevant offers.

You can avoid this pitfall by segmenting your customers based on their CLV, satisfaction score, engagement level, purchase history, and demographics.

Conclusion

At the end of the day, the strategy you will implement first will depend on your goals and the current resources you have. Start small. Start with what you already have and go from there. As you master 1 or 2 strategies and start seeing results, you can then scale to more complex strategies. 

If you want to learn more about what and how you can take advantage of the current marketing revolution, we have the right resources for you. Check out our blog now and learn about more ways you can drive more leads and sales for your business.

Author Bio:

Burkhard Berger is the founder of Novum™. He helps innovative B2B companies implement modern SEO strategies to scale their organic traffic to 1,000,000+ visitors per month. Curious about what your true traffic potential is?