2. April 2019 Blog

6 customer retention strategies

Let’s start with a little math: if you want to quantify how good you are at keeping your existing clients, you can use a simple formula to calculate the so-called customer retention rate:

Number of customers at the end of a given period – Number of new customers / Number of customers at the start of the given period x 100%

If you have just found out that your result is not very good and you want to prevent your existing customers from leaving, you should start by asking yourself why your existing clients are leaving you. Don’t be afraid to ask your former clients for feedback – this will help you identify the main sources of dissatisfaction. You might be surprised to find out that they didn’t opt for your competitors because of the price but because your agents were arrogant.

If you managed to identify the main reasons why your clients abandoned you, you can use some of the following strategies to prevent your existing clients from leaving in the future:

1. Benefit from data analysis and don’t forget about prevention

The easiest and most efficient way to ensure customer retention is to capture any warning signals and take action as soon as possible. By analyzing shopping behavior patterns, you can easily find out who are your loyal customers which customers are considering leaving. For example, if you see that there is a continuous decrease in orders made by specific customers in comparison to the previous period, it’s clear that there’s something wrong. Find out who your key customers are and prevent them from leaving your business.

2. Make special offers

Make sure to regularly come up with special offers tailored to your customers’ preferences. Consider the following offers:

  • discounted products of their favorite brand or a chance to buy a second product at a better price, i.e. a 30% discount if they buy two packs of multivitamins or two T-shirts of the same brand
  • a special gift for their purchase or on their birthday, i.e. travel-sized toothpaste when they buy 3 toothbrushes or a pair of sports socks when they buy sneakers
  • a free extra service, i.e. gift wrapping, extra mobile data or a paid TV channel for free for a month

3. Start a customer loyalty program

One of the main pillars of customer retention is systematic loyalty building. Loyal customers don’t tend to switch to competitors and on average, they spend more money per transaction than a one-time customer. Creating a positive relationship to a brand is not a matter of hours or days, but it’s not impossible. Repeated positive customer experience and loyalty-boosting tools will help you. In practice, loyalty programs are one of the most commonly used tools.

Most loyalty programs are based on a simple principle:

  • Customers receive award points for each purchase, which entitle them to a discount for the next purchase.
  • Customers get a stamp (point) on a loyalty card when they buy above a certain amount and once they get enough points (stamps), they receive a discount or a gift the next time they make a purchase. For example, you get a stamp for each coffee you buy in your favorite café. When you get 9 stamps, the tenth coffee is on the house.
  • Loyalty programs are voluntary and many businesses motivate their customers to join their loyalty programs by offering better prices, free delivery, more favorable return policy, etc.

4. Reward your VIP clients

VIP clients are crucial for your business because they are the most profitable ones. These are the customers you really don’t want to let go of. Even though you should care about each and every client, VIP clients should receive special care. The most important clients deserve:
•    top-class services
•    professional approach based on their individual needs
•    thank them for their loyalty by offering them exclusive rewards, bonuses or services

5. Be interested in your customers and improve their customer experience

Show your customers that you care about them and that you don’t take them for granted. Don’t forget to thank them for their purchase, update them about the status of their order and respond to their questions or complaints as quickly and possible.
You should also continuously monitor the quality of their customer experience and work on improvements. Money is not everything and if your customers don’t have a good feeling about their purchase and your attitude, not even a low price can save you.

6. Improve your customer relations

Good customer relations are crucial for the success of your business. Be proactive and listen to your clients’ requirements and wishes. Don’t lie to them and don’t make promises you can’t keep. To read more about building and maintaining good customer relations, please read this article.


If you pay attention to your clients, it will definitely pay off. You can prevent customers from leaving even without major investments and efforts. Don’t forget that retaining current clients is much cheaper than acquiring new ones and loyal customers pay three times more per transaction than first-time visitors.