Retaining Customers

Any seasoned business owner understands that retaining customers is key to the overall success and growth of their business.

According to research from Harvard Business School, “increasing customer retention rates by 5 percent increases profits by 25 to 95 percent.”

But what are the determining factors that will prompt a customer return?

Personally, one bad experience is enough to make me switch brands and, based on research by Kolsky, 67% of average consumers feel the same way. On the flip side, the more positive an experience I have, the more a brand stands out in my mind as a quality product/service provider. NewVoice found that “50% of consumers would use a company more frequently after a positive customer experience.”

Customer Experience First

Consumers value their experiences with a company more and more.

Your business needs to compete based on experience. According to Gartner, “89% of marketing leaders expect to compete primarily on the basis of customer experience by 2016, compared to just 36% four years ago.”

Customer Retention Definitions

Customer Retention: When a customer continues to return to the same business to purchase a product or service.

Customer Retention Rate: The percentage of customers who purchase from a business again vs. all the customers who purchased from the business at least once during the period of time in question.

Customer Retention Strategy: A program designed and implemented by a business to improve their customer retention rate.

This article outlines seven strategies for retaining customers and improving the overall success of your business.

6 Customer Retention Strategies That Actually Work!


According to Marketing Wizdom, “the average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships.”

Here are seven customer retention strategies that actually work:

1. Position Your Brand in Your Customer’s Heart

The emotional attachment that consumers develop with a brand dramatically influences their purchasing decisions.

Standing for something, understanding your customers and backing your brand up with social proof is the perfect recipe for having customers feel a personal commitment and loyalty towards your brand.

Stand For Something: According to the Harvard Business Review, 64% of customers that have strong relationships with brands do so because they identify with the brand’s values. Remember, it’s not a value until it costs you something so don’t be afraid to think big here.

Speak Your Customers’ Language: Understand who your customers are and craft strategies, communication channels, and messages that articulate your brand’s values in a way they understand and relate with.

Social Proof: Amazon Customer Reviews, TripAdvisor, and Yelp are all great examples of common platforms that customers are using to check out your brand’s quality, personality, and values. When customer reviews reinforce the consumer’s feelings, they are more likely to stand by their loyalty to your brand.

Recommended Action Step: Speak about your values in the language of your customers.

2. Provide Proactive Customer Service

It’s easier to prevent fires than to put them out. Proactive customer service is all about preventing fires… and can cost a lot less than reactive service when done right.

Some things to think about when creating a proactive customer service strategy are:

1. Anticipate customer problems: Before you offer your product or service to customers step back and think, “What problems will my customers have?” Take this list of problems and see if you can remove any of them. For the problems you can’t remove come up with a solution before a customer has the problem.

2. Automatically detect problems: Can you tell a customer is going to have an issue before the customer even knows? This is often simpler than you think. It could be as easy as tracking which packages were picked up late by your shipping company or which users experience an error in the app.

3. Proactive Resolution: Once you’ve detected a likely poor customer experience, resolve the issue as fast as possible. Often it’s possible to resolved a customer’s problem before they complain or even know it happen.

According to American Express, “59% of consumers would try a new brand or company for a better service experience.”

Recommended Action Step: Look for how you can solve your customers problems before they have them so you can respond as quickly as possible.

3. Consistent Customer Service

Expectation = Reality = A Happy Customer

Omni-channel marketing should aim to create consistent customer experiences across all channels. In other words, the customer experience in your physical store, on your mobile app and when someone visits your website should feel the same.

To create a consistent customer experience, all teams need to work together and be on the same page at all times.

Processes: Many people think of processes as slow and boring. However, when you’re trying to create a consistent experience process is key. This isn’t to say script every customer interaction. You just need to map the key processes such as how much a customer will pay, how a support ticket is handled and what how a return is handled.

Communications: Regardless of if you have an omni-channel customer experience or a single channel communications is key. You need to ensure team members know the processes. If you do have an omni-channel experience it’s important to promote communications between channel managers to ensure they can flag inconsistent experience quickly.

Recommended Action Step: Read the insightful article by Fast Company about the “6 Disciplines Behind Consistently Great Customer Experiences”. The article encourages companies to enforce a set of standard practices that will smooth out the kinks between departments and create a consistent customer experience.

4. Engaging and Personalized Service

Speaking of great customer service, today’s consumer wants to feel like they’re having a conversation with a person, not a robot. Engage customer experiences make the customer feel like they are genuinely interacting with your brand.

Personalized customer services shows that your brand cares about your customer’s individual needs and preferences, and that they are not just another opportunity to make money.

According to Rosetta Consulting, “engaged customers are five times more likely to buy only from the same brand in the future.”

Cheerios, for example, asked their followers to share their day with them on Instagram. In return, Cheerios sent a personalized and encouraging message back.


Recommended Action Step: Celebrate big moments with your customers, whether it’s a national holiday, your company’s two-year anniversary or your customer’s birthday. Take advantage of social media, email, or direct mail campaigns to celebrate these moments.

5. Build Company Credibility

We’ve focused a lot on customer experience specifically when they are interacting with you. However, a customer experience around your brand continues even when you’re not around.

Customer are continually influencing and being influenced by their friends and family. Because of this, it’s important that your company’s brand is credible and viewed in a positive light even when you’re not around.

To build your credibility you need to do two things:

  1. Offer quality products or services
  2. Offer valuable information, advice, and commentary

If your company is seen as a credible source by consumers:

  1. They will trust you, your company, and your products/services
  2. They will confidently recommend your company/product to their friends, family, and colleagues

Recommended Action Step: Besides delivering quality products/services, actively provide advice that truly benefits your target audience.

6. Track Customer Satisfaction

“If you can’t measure it, you can’t improve it”
– Peter Drucker

Measuring any strategy is key to its success and it’s no different with customer retention.

A good leading indicator of customer retention it the Net Promoter Score. The Net Promoter Score (NPS) is a tool created by Bain & Company to measure customer loyalty.

How NPS Works:

A Company sends a survey to a customer with one question: “How likely is it that you would recommend Company X or Product X to a friends, family, or colleague?”

Respondents answer with a number from 0-10, with 10 being extremely likely and 0 being extremely unlikely. Customers’ responses are then put into 3 categories

1. Promoters: Your most loyal customers who will not only promote, but encourage, their friends, family, and colleagues to use your company/product.

2. Passives: Customers that are happy with your company/products, but are passive when it comes to promoting.

3. Detractors: Your most unhappy customers who will talk about your company/product, but in a negative manner.

The NPS scale from Promoters to Detractors.


Finally, your NPS is calculated by subtracting Detractors from Promoters. If you want to learn more about NPS check out Referral SaaSquatch’s Beginner’s Guide to Net Promoter Score .

Recommended Action Step: Setup an automated NPS survey and don’t be afraid to talk to your detractors about what could have been better.


These customer retention strategies are a means to begin the process of building your customer-brand relationships. But remember that these retention strategies aren’t shortcuts.

Great customer experiences are built on real emotions and interactions that go beyond strategy.

Read more: Smart And Fast Fixes For Your Business