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Top Customer Retention Strategies That Actually Work



customer retention strategy

Businesses are made to profit💸, which happens only when a customer returns to your business again and buys your products. 

As many companies selling the same product are already in the market, acquiring new customers is challenging.

They have to compete🤼 with each other and focus more on existing customers who give positive reviews of their products and brands, all for the purpose of increasing 📈customer retention.

In that case, are you a business owner looking for strategies that help you retain customers? If that’s so, we’ve got you covered!

This blog will cover everything about customer retention, its importance, purposes, strategies to improve it, and how to calculate its rate.


  • Customer retention is a strategic plan to attract, engage, and make them purchase products frequently.
  • Customer retention programs help to maintain quality customer service, loyalty, and feedback mechanisms.
  • It focuses on understanding and responding to the customer’s needs to build lifetime trust.
  • The customer retention technique promotes products and services to new customers to generate leads.
  • Provide valuable educational content to reduce confusion and enhance product satisfaction.

What Is Customer Retention?

Customer retention is maintaining a relationship with existing clients and making them buy its goods and services over time. Customer retention helps businesses increase revenue, improve customer service, and customer trust, enabling them to compete in the market with their competitors.

Critical aspects of customer retention are:

  • Building loyalty: This is the foundation of customer retention. And building loyalty involves creating strong emotional connections between the customer and your brand.
  • Minimizing churn: Understanding why customers churn (through surveys or feedback analysis) is one of the most crucial things, and doing everything to reduce it is important as well.
  • Increasing customer lifetime value: Increasing customer lifetime value (CLV) is also related to retention as it involves maximizing the revenue generated from each customer by encouraging repeat purchases.

How To Calculate The Customer Retention Rate?

Customer Retention Rate(CRR) is crucial in determining the percentage of customers. This helps to identify new customers attracted to your company and those who stop/cancel purchasing.

You can calculate it by using this formula:

Customer Retention Rate= {(E-N)/S} x 100


E = Total number of customers at end period.

N = New customer acquired.

S = Customers at the start of the period.

Why Is Customer Retention Necessary?

Customer retention can keep existing customers for a long time. It is necessary because it has an immediate effect on company success. Additionally, it significantly boosts revenue by increasing the chance of customers repeatedly purchasing. Client retention plays a vital role in making customers happy.

If your business fails to satisfy customers’ expectations, you will lose customers and can’t make things right again. For that reason, it is necessary! And to improve customer retention, you must carefully observe the customer experience and what customers think about your brand.

You must also do marketing and advertising to grow your business and increase revenue.

Customer retention is necessary for the following points.  

  • Leads to Better Cost Saving: It is always more cost-effective for existing customers than acquiring new ones. Acquiring new customers is always more expensive than retaining new ones. When customers come frequently, there is a likelihood of better cost savings.
  • Increases Profitability: When your loyal customers come frequently to buy more products from your company, your company’s revenue increases compared to new customers not buying anything. Also, regular customers believe in your company and are also familiar with your brands.
  • Businesses Get Refer (word-of-mouth) Marketing: Once you build a good bond or trust with your regular customers, there is minimal need for marketing and advertisements. The customer will promote your business by referring family, relatives, and friends, making it easier for companies to attract new customers.
  • Bring Valuable Feedback: Retained and trusted customers always give you better feedback as they have already used your products and services. Feedback also helps your business grow and improve for market needs.

Take a look at this 👉What is Bad Customer Service? [Examples & How to Fix It]

15 Customer Retention Strategies to Keep Customers Loyal With You

Businesses should improve customer retention strategies and techniques to secure long-term growth and profitability. A satisfied customer will likely stay loyal and spread positive word of mouth about your business.

Here are strategies to enhance customer retention:

1. Get To Know Your Customers

The primary goal of any company or business is to determine the voice of your customers, their needs, their pain points, and how to fulfill them.

You have to take this as a strategy and stay focused on the customer while they visit and observe them about what they want, their plan, and their goal. You should also create data on customers before and after purchase.

Businesses can collect more information from various sources by asking about their products through surveys and feedback forms. This helps companies understand customers’ needs and how to keep them loyal, improving customer retention.

2. Optimize And Personalize Your Experiences

Today, users have high expectations, and everyone needs an optimized and personalized experience. Knowing your customers will make it easy for you to provide an optimized user experience. The interaction between you and your customer helps to determine your brand value and increase customer retention rate.

You’ve got to have a strategy that focuses on building a simple user interface design that helps optimize user experience and make it consistently pleasant. For this, businesses can utilize data like customer name and last product purchase to recommend relevant products and encourage repeat purchases. This makes customers feel valued and understood.

3. Engage Through A Well-Executed Mailing System

Today, all businesses and customers have shifted to computers and mobile devices, making it easy for companies to notify customers of their products by sending well-executed mail. 

Welcome emails can impress customers and encourage them to make a first purchase. Furthermore, a well-done nurturing emailing sequence can keep them coming back for more. Aside from this, you can improve retention by sending mail about the benefits of your products, explaining how to use them, and providing video tutorials. 

4. Create A Loyalty Program That Is Relevant And Easy

To build revenue and improve client retention, provide some incentives to loyal and regular customers. Giving customers facilities like referral bonuses for using products for a long time helps to gain more retention. 

Businesses can use customer loyalty management tools like LoyaltyLion and Emarsys to reach more customers and retain them with less stress. Again, referral bonuses benefit customers, which is good for businesses. And when businesses give incentives and bonuses to customers, they are more likely to have repeat customers.

5. Build Dedicated Knowledge Bases That Make A Difference

Businesses must have solid, dedicated plans and knowledge bases to build good relations and retain existing clients. Both of these are needed because these, by just being there, can help customers resolve queries without contacting support or a call center, which increases customer retention rates.

Companies can also establish forums where customers can post queries, connect with others, and get inspiration. Customers who feel like they are a part of the community are likelier to stay loyal. To solve specific problems and increase retention, businesses must build dedicated communities!

6. Show Appreciation In Ways That Matter To Your Customer

Showing appreciation to customers enhances businesses’ ability to retain customers. Businesses should show appreciation by sending clients and customers personalized thank-you notes, exclusive benefits, discount codes, surprises, and loyalty points. To make a lasting impression, send handwritten notes to devoted clients. 

Sending presents and discount cards to customers also creates a sense of reciprocity. Businesses can save time and effort by creating and distributing personalized notes ink according to your specifications.

7. Encourage Reviews And Testimonials

You should focus on building a reputation around positive reviews and testimonials. By doing so, they help leads learn about your business’s products and brands, resulting in new customers. This makes customers aware of the company’s products and features. It also helps to maintain a long-term bond between you and your customers.

As excitement about the product grows, new customers are more likely to buy with confidence. Seeing positive reviews of your products and reading about your home page can boost new customers’ confidence and encourage them to stay with you. Respond to negative reviews, show gratitude, and make things right quickly.  

8. Improve Customer Service And Support

Establishing a caring and supportive online presence builds trust and keeps customers coming back. Social media monitoring software helps companies respond quickly to positive and negative comments. Companies can should also respond to customers using calls, chatboxes, and video tutorials on search boxes.

There may be times when customers have problems or questions regarding a product, so they make a call or contact you via live chat, calls, emails, or social media and want to resolve them. It is your company’s responsibility and duty to resolve these problems strategically, as it will have a long-term impact on customer satisfaction.

9. Make Returns And Refunds Easy And Reasonable

Refusing refunds or making continuous errors impacts customer retention. But if the company solves the problem, apologizes honestly, and refunds quickly, this builds trust for future purposes. Customers will trust you if they rely on you to treat them fairly. This is also called the customer retention strategy.

Businesses should ensure that refunds are processed promptly to maintain customers’ trust. They should also provide transparent policies that are easy to use and understand and meet customer expectations before buying any product. This will help retain customers and also enhance their brand reputation.   

10. Provide “Simple Payment” Options

These are customer retention tactics to attract more clients and increase revenue. 

According to a survey, 76% of consumers are more likely to make a purchase if they are offered an easy and seamless payment plan. 

So, your company should offer a transparent process for purchasing, one that fits their understanding and encourages them to purchase more from you in the future.

A simple payment solution that lets customers purchase immediately and pay later in installments and is accessible can boost customer retention. It reduces the burden on customers because they do not have to pay a high amount at the same time of purchase.   

11. Foster Word-of-Mouth Support

Word-of-mouth marketing supports your company’s customer retention programs because once a trusted customer refers new customers, the chance of buying your product is high. For this strategy, a business should encourage its existing customers to share their positive experiences with their family, friends, and colleagues.

Existing customers happily buy your product repeatedly, which builds the likelihood that new customers will purchase from you. Businesses should also provide rewards like discounts and special offers to both referrers and referred customers to encourage them to buy their products.

12. Offer Unique Services

Offering unique services is challenging, but if a company comes up with a new feature that others don’t, it will be the peak point for retaining customers. If businesses solve the critical problem of customers, then the chance of an increase in revenue will be high.   

On the flip side, offering unique services can be a powerful tool to set yourself and your business apart and keep customers coming back for more. One way to do it is to go beyond basic recommendations. That, in turn, can be done by analyzing customer data to predict their needs and offer personalized experiences.

13. Use Gamification to keep customers invested

Gamification is essential for retaining customers because it fulfills their needs and rewards them after a purchase. This strategy incentivizes customers to make more purchases.

For this to work, businesses must first understand their audience to provide gamified features that appeal to their interests and motivations. They need to make the game mechanism simple and update it promptly. Gamification enhances the customer experience and leads to increased customer loyalty and retention.  

14. Listen/Speak To Your Customers

This plays a vital role in retaining customers. Businesses must listen to queries and respond to customers with suitable solutions. Communication with clients helps identify the business’s problems and create better solutions. Conversations between clients and customers can help in making better business decisions and retaining customers.

Businesses can communicate directly through various channels, such as emails, social media interactions, call support, and physical face-to-face conversations. Customers feel happy when a company asks for feedback after purchasing a product. This method helps to obtain priceless information and increase customer retention.  

15. Educate Your Customers

Educating customers is essential for engaging them in your products or services. Once businesses interact with customers, they must provide different programs, such as free educational webinars and know-how about products, in order to help customers grow their knowledge of their products. 

This helps customers feel supported and reduces frustration and product returns. Providing relevant information and solving issues influences customer satisfaction and loyalty. Continuously updating educational content helps educated customers be more likely to be satisfied and contributes to the broader success of the business.

📖Also Read: 14 Customer Service Metrics to Measure

Top 7 Customer Retention Examples

A customer retention program plays a vital role in a business’s success. Below are the top 7 examples followed by most companies.

1. Offer A Seamless Online Experience(Amazon Prime)  

Customers today expect a better experience on mobile phones and the Internet. To fulfill that, Amazon provides a seamless online experience to customers and fulfills client retention demand.

Amazon’s subscription service offers free shipping, ad-free music, exclusive deals, and more, significantly increasing customer stickiness and repeat purchases. 

2. Netflix’s Content Recommendation

Netflix uses highly complex algorithms to decrease churn and maintain subscriber engagement by predicting which movies subscribers will watch next.

Also, Netflix’s user interface design is simple and easy to use, and more enjoyable content enhances the overall user experience.

3. Build Empathetic Customer Relationships(Zappos)

Zappos is an online shoe retailer that offers free delivery on all orders and a 365-day return policy. This company is committed to customer satisfaction. The dedication to client loyalty results in an excellent retention rate.

4. Sephora Beauty Insider

Sephora offers various rewards to its members, such as birthday gifts, benefits, and exclusive member events that encourage repeat purchases. Buying new products from Sophera provides points that can be redeemed for unique gifts.

This program is known for its ability to understand customer behavior, which results in highly personalized marketing.

5. Personalization Through Predictive Analytics(Spotify)

Predictive analytics is another tool for increasing customer loyalty because it provides a personalized experience to customers. It helps increase retention by keeping users engaged and satisfied with the services.

For this, Spotify offers customized playlists like Discover Weekly and daily mixes likely to be enjoyed based on their listening history.

6. Offer Omnichannel Customer Service(Nike)

This is a big brand, and customers all over the globe are using it; you wish to provide them with a positive shopping experience everywhere. It offers tracking features and personalized training plans for runners.

Nike deals with this by providing its customers with quick responses from customer support and live calls encouraging them to stick with the brand for their fitness goals.

7. Create Interactive Educational Content(Ikea)

It enhances customer engagement and provides valuable information. However, support is insufficient for each customer query; there are more customers who have the same problems with your product, so education is vital to solving all these queries.

In order to increase customer satisfaction and retention, Ikea offers interactive educational content. 

What is a Customer Retention Program?

Businesses design customer retention programs and tactics to increase sales and retain existing customers. These programs maintain trust and a good relationship with customers for the long term.

The customer retention program includes various strategies to foster long-lasting relationships and promote repeat business, including loyalty rewards, exclusive offers, and an ongoing feedback system.

Here are some popular customer retention programs used by businesses

  • Loyalty Reward Program: These programs offer points, discounts, and other incentives for making regular purchases or engaging with the program. Customers receive rewards that make them come back.
  • Engagement Programs: Developing interactive methods allow customers to interact with the brands. This might include a loyalty program or social media competition. 
  • Exclusive Offer: Existing customers get exclusive information or special discounts that make them feel appreciated and promote repeat business. 
  • Customer Feedback And Survey: Asking customers for feedback helps identify their requirements and areas of dissatisfaction. Customer feedback is appreciated, which assists in making necessary adjustments.  


Customer retention is essential for any business’s long-term success. By utilizing these strategies and prioritizing customer satisfaction, engagement, and loyalty, companies can build strong relationships with their customers and retain them. They can also drive sustainable growth and efficiently increase revenue.

When you correctly identify your customers’ needs, they will purchase your product repeatedly. Businesses must focus on services that best fit these needs. Companies can challenge their competitors now and in the coming years by implementing a customer retention strategy.

If you are looking for other options besides strategies to improve customer retention, call center solutions like KrispCall are available. With KrispCall, you get features and functionalities like call listening, call monitoring, Unified Callbox, sales call recording, and call analytics that can collectively give you insights into all your customer conversations.

You can use these features to understand what’s happening in every interaction, understand the situation, and then take action to improve customer interactions and thus improve retention.


How do I determine which customer retention strategies to use? 

To determine which customer retention method to use, clients can ask customers for their opinions and reviews, directly call, survey, and provide feedback.   

What are the different customer retention program ideas?

There are many customer retention program ideas. Below is a list of solutions that help you retain your existing customers. 

  1. Onboarding program
  2. Customer loyalty program
  3. Customer advisory board
  4. Beta testing group

What are the various customer retention metrics to measure?

There are five methods to measure customer retention metrics.

  1. Customer retention rate
  2. Customer churn rate
  3. Customer lifetime value
  4. Repeat customer rate
  5. Purchase frequency
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Dinesh Silwal

Dinesh Silwal is the Co-Founder and Co-CEO of KrispCall. For the past few years, he has been advancing and innovating in the cloud telephony industry, using AI to enhance and improve telephony solutions, and driving KrispCall to the forefront of the field.

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