Studies show that increasing customer retention rates by 5% increases profits by 25% to 95%.
And it costs 5 to 25 times less.
Whether it’s in times of crisis, when it may be harder to acquire new customers, or in normal times, customer retention is key to maximizing the growth of your brand.
According to the Gartner Group, 80% of your future profits will come from just 20% of your existing customers.
So, here are 10 proven customer retention strategies (including 29 actionable tips) to help you accomplish just that.
Table of Content
1. Customer Onboarding
Onboarding is an effective customer retention strategy as it ensures customers know how to get the most out of your product or service, which, in turn, improves their productivity.
Tip 1/29: Deliver a robust onboarding program
Having sold your product or service to a new customer, it’s essential to welcome them aboard and guide them through the first crucial hours and days. If a customer has committed to your product or service, the least you can do is show a commitment to them.
The best way to engage new customers is through an established onboarding program. These will vary depending on the size and nature of your business, but make sure it’s well-documented and that the customer has a point-of-contact to reach out to in case of any problems.
You’ll also want to tailor the onboarding program according to the needs of your customer, so offer a mix of common tutorials and one-to-one sessions to make sure you meet the needs of every customer.
2. Customer Education
Once you’re past the onboarding stage, you need to ensure you continue to educate and inspire your customers. Let’s look at some of the training options.
Tip 2/29: Send an automated email sequence
An automated email sequence that sends lessons at a predefined pace is an excellent way to keep customers engaged with new tricks and tips to get the most out of your product or service.
Tip 3/29: Include 1-2-1 training sessions
Offer personalized training sessions as part of your product set. For example, each customer is entitled to one free 1-to-1 training session with their account manager for the first six months.
Tip 4/29: Create an online academy or university
An online academy or university is perfect for customers to investigate themselves, so they can pick a topic and work through a series of classes. For example, Thrive University:
Tip 5/29: Use live webinars
Although webinars are used widely in the lead gen stage, they can also be extremely effective in educating your customers, too.
Tip 6/29: Publish valuable content on your blog
Regularly publishing and updating content on your blog helps to position your brand as a trustworthy and reliable source of information. You can educate customers on industry trends and provide in-depth guides that link to your product, as well as sharing product updates and announcements.
For example, we recently published a guide to TikTok marketing:
The release of this guide coincided with the announcement of the brand-new TikTok integration with Loomly:
3. Customer Service
Customer service is the primary on-going mechanism to support your customers, and it can be the place where you lose or retain customers. Get it wrong here, and you sow the seeds of doubt.
Tip 7/29: Set customer expectations
At the outset, you need to set out what customers can and should expect as part of their on-going support. In some cases, you can use a service level agreement (SLA) to set expectations.
For instance, you might state that you’ll respond to all support issues within 30 minutes. And then add that you aim to resolve their problem within one day. (The nature and size of your business will dictate what you promise.)
Tip 8/29: Provide world-class customer service
Research from Capgemini found that eight out of ten customers are willing to pay more for a product or service if they receive a world-class customer experience. And, it’s fair to say that customer service is at the heart of that experience.
So how do you provide world-class customer service?
- Provide support on the right channels, including phone, live chat, email, social media, and helpdesk tickets.
- Provide a fast response that lets customers know you’ve received the request.
- Resolve issues first-time without escalation to second or third levels.
- Proactively advise customers if you have a known product/service issue.
- Apologize when you make mistakes.
- Employ an experienced support team.
Tip 9/29: Strive for quality, not speed
Although customers prefer to get their problems answered quickly, they’re more concerned with getting a quality service.
According to research from Gallup, customers were six times more likely to be satisfied with a “quick” service. But when they measured other “quality” factors like product knowledge, sincerity, and the ability to explain things, they found customers were nine times more impressed with the brand.
Tip 10/29: Maintain service integrity
Customers will stay with you as long as you’re:
- Open and honest with them
- Take a genuine interest in them
- Don’t let them down
- Care for them
- Practice what you preach
4. Customer Delight
Once you have your customer service right, you can think about customer delight, i.e. going above and beyond their expectations.
Tip11/29: Surprise your customers
If you want to retain your customers, then you need to surprise them (in a nice way) every now and then. These surprises don’t have to cost a lot of money. In fact, it’s often the small, simple gestures that delight customers more, such as a handwritten note or a shout out on social media.
Grammarly makes its customers feel special with weekly achievement messages:
Tip 12/29: Over-deliver on your promises
Earlier, we mentioned setting customer expectations. Once you meet those expectations, you can go a step further and over-deliver:
“Under-promise, and over-deliver.”
Once you start over-delivering, you exceed expectations and go past what you promised.
Tip 13/29: Thank your customers
Saying thank you is a simple, yet effective, customer retention technique, that gives your brand an edge over the competition. Make sure your “thank you message” is sincere and personalized rather than automated and anonymous.
5. Customer Feedback
A customer feedback loop allows you to gather and analyze what customers think of your product and service. There are several ways to collect this information.
Tip 14/29: Leverage customer surveys
Online customer surveys are an excellent way of canvassing customer opinion. Different brands run surveys on various frequencies, but you should aim to be consistent. For example, by running a quarterly or annual customer satisfaction survey, such as the Net Promoter Score (NPS) type survey.
Or, if you have a software product, you could run in-app user surveys. Parlor claims these are much better as they’re:
- Accurate: Focus on your real users, not random testers.
- Relevant: Presented directly in your product experience.
- Non-disruptive: Engages users at the relevant moment.
- Actionable: Results analyzed across different user cohorts.
Whichever method you use to collect customer feedback, you need to analyze the data, plan changes, and, most importantly, close the loop by reporting back to customers what you intend to change and when you plan to do it.
Tip 15/29: Cherish customer complaints
As Bill Gates says:
“Your most unhappy customers are your greatest source of learning.”
Rather than take the hump, you should cherish customer complaints.
96% of dissatisfied customers walk away without complaining, so if you receive a complaint, you have a chance to put things right and retain your customer.
Often customers can’t be bothered to complain, but sometimes they don’t know how to reach you to complain. So make sure you have a direct path to receive customer complaints. And then deal with them promptly and courteously.
Tip 16/29: Use customer ratings, reviews, and testimonials
Customer reviews and testimonials are a great way of capturing feedback. And, when used correctly, can attract new and retain existing customers.
There are many platforms that you can use to collect ratings, reviews, and testimonials, including Google My Business, Facebook, Yelp, Trip Advisor, Trustpilot, plus your website.
Choose the platforms that make the most sense to your business.
Once you’ve collected the feedback, make sure you spread the word on social media and your website.
6. Customer Behavior
While customer feedback provides a direct way of gauging customer satisfaction, sometimes you have to look below the surface to monitor and measure customer behavior.
Tip 17/29: Look out for early warning signs
If you look closely, it’s possible to spot signs that customers might be about to leave. For example, low product usage or increased customer service inquiries might indicate a customer is becoming increasingly dissatisfied with your product or service.
Tip 18/29: Re-engage customers
When you spot “sleeping customers,” then it’s time to re-engage them before they leave. Remember, it’s easier to retain existing customers than find new ones.
Reach out on a personal level to discover the underlying problem and take steps to fix it. Or, on a grander scale, you could launch a reactivate campaign to encourage more customers to start using your product again.
Tip 19/29: Target customers with special offers
If you’ve failed to get customers back on board, you can always make a final special offer when they say goodbye. For example, you could offer three months free subscription to get them back using your software product during which time you make a concerted effort to prove they should stay with you forever.
7. Customer Communication
Keeping in touch with your customers is a sure-fire way to keep them engaged with your brand.
Tip 20/29: Develop a communication calendar
In the same way an editorial content calendar helps you keep track of content planning, creation, publishing, and promotion, a communication calendar helps you avoid losing your customers by building relationships and keeping in touch regularly.
The calendar is a sequence of events, special offers, and messages, which you send to your customers using automation software.
For example, if a customer’s subscription is about to expire, you can send an automated email letting them know they need to renew their subscription.
Frequent communications reassure customers that you haven’t forgotten them and that you value their custom.
Tip 21/29: Personalize your communications
Every customer has a name, and they love it when you address them personally. Whether that’s in an email or on social media, make the most of personalization to keep customers engaged with your brand.
Tip 22/29: Send a customer newsletter
Sending a customer newsletter is relatively simple, but it’s a proven way of keeping customers in the loop. Tell them about product updates, new features, the roadmap, new team members, and more:
Plus, by using an email marketing service, you can segment your customers from prospects and tailor news and offers accordingly.
8. Customer Loyalty
As well as tracking customers who may be on the cusp of leaving, make sure you remember to reward your loyal customers, too.
Tip 23/29: Introduce a customer loyalty scheme
Customer loyalty schemes are a tried-and-tested way of retaining your customers.
For example, Caffe Nero’s loyalty card gets stamped by a barista each time you purchase a coffee. Collect ten stamps and get a free coffee. Simple yet effective. Now they’ve extended the scheme to an app where you can also win prizes.
Tip 24/29: Reward your (VIP) customers
Other loyalty schemes involve various grades like bronze, silver, and gold. For instance, the more points you earn from staying in a Hilton hotel moves you up the ladder towards gold membership, and that means more perks. So customers are keen to continue booking with the Hilton to get their bonus.
Tip 25/29: Use referral programs
Referral programs can be a highly effective way of increasing customer retention. When an existing customer refers your product or service to a friend or colleague, then both parties benefit.
For example, Harry’s referral program looks like this:
- £5 for you and your friends.
- Every time a friend uses your invite link to start a Harry’s trial, both of you save £5 on your next order.
While HelpScout rewards its brand advocates with a $100 Amazon gift card when they refer someone who becomes a customer (plus that new customer gets a $50 credit on their account).
9. Customer Collaboration
Customer collaboration offers you a way to engage your most valuable customers and make them feel part of your brand.
Tip 26/29: Form customer councils
Parlor recommends forming customer councils based on shared characteristics such as your highest paying customers, or beta testers, or power users.
Council members can submit product requests, participate in research studies, preview potential new features, or join in on town hall discussions.
Tip 27/29: Share your product roadmap
When you’re developing new features and improvements to your product, it’s a great opportunity to share your roadmap with your customers. Getting users involved at an early stage can actually validate your roadmap.
It’s a win-win situation, as you only invest time developing features that customers want, and customers stick around because they know their requested features are on the way.
Tip 28/29: Create a community forum
You can involve customers in online communities and discussion forums where they can share and exchange knowledge with you and their peers.
For example, Shopify’s community of over 650,000 merchants and partners includes a discussion board where they can ask questions, provide feedback, and receive updates on the latest developments:
10. Customer Perception
Sometimes customers are attracted to and remain loyal to a brand because they identify with their core principles and beliefs, as well as their product or service.
Tip 29/29: Stand for something
More and more, customers want to remain loyal to brands that stand for something.
For example, at TOMS, for every $3 they make, they give $1 away:
Here at Loomly, we stand for Brand Success, because we believe that developing a strong brand is the best way to build defensiveness and future-proof your business.
To that end, we recently published an article to help our customers pivot during Covid-19:
Customer Retention Strategies in a Nutshell
Customer retention is an often-overlooked but critical component of any marketing strategy. It’s much easier to retain existing customers than continually attract new prospects, especially during this uncertain time.
Here’s a quick recap of the 10 customer retention strategies that you can deploy:
- Customer Onboarding
- Customer Education
- Customer Service
- Customer Delight
- Customer Feedback
- Customer Behavior
- Customer Communication
- Customer Loyalty
- Customer Collaboration
- Customer Perception
What strategies are you using to retain your customers during COVID-19?