32 Research-Supported Customer Retention Strategies that Really Work (with Stats)
Keeping existing customers is both cheaper than acquiring new ones AND imperative for growth. Here are 32 customer retention strategies that really work.
When it comes to running a sales business, customer retention is the foundation of any successful growth strategy. That sentiment is true whether you’re an eCommerce seller, brick and mortar retail establishment, software company or even a contract services provider.
Picture the following scenario. Company A and Company B each have 1,000 customers. In a year, Company A retains 800 customers (80%) and Company B retains 700 customers (70%). Each company also adds 300 new customers per year for a new customer growth rate of 30%. Company A will now have 1100 customers for an overall growth rate of 10%, while Company B will still be at 1000 total customers for no overall growth at all.
That’s a lot of work to attract and obtain new customers for no growth. It’s sort of like running as fast as you can on a treadmill without going anywhere.
In addition, keeping existing customers is exponentially less costly to your business than acquiring new ones. In fact, a survey conducted by Invesp Consulting found that obtaining a new customer is up to 5X more costly than retaining existing ones.
But how can you retain more customers and foster success for your business? Let’s take a look at 32 research-backed customer retention strategies that some of the biggest companies are using to great effect.
Customer Loyalty Programs
According to a recent Forbes compilation of stats from various studies, 52% of American consumers will join the loyalty program of a company they make frequent purchases from. In addition, 84% of customer loyalty program members have redeemed rewards from programs to which they belonged. Finally, the average consumer belongs to 14.8 loyalty programs while 18% of consumers actively participate in loyalty programs of which they are members.
These statistics show a significant opportunity to improve customer retention by implementing a customer loyalty program. If shoppers know they will receive perks for buying from you, they will be more likely to frequent your shop any time they need products or services that match what you sell.
Certain types of businesses have used loyalty programs for years. Think about frequent flyer miles from airlines or branded discount cards from grocery stores. The premise is simple. Invite shoppers to sign up for free as members of your customer loyalty program. Then, determine the types of rewards you want to offer them. Your customer loyalty program can include:
- A discount on all items when signed in to their account.
- Earned points toward future purchases based on dollar amount spent.
- A tiered system in which rewards grow based on membership level.
- Any combination of benefits or advantages for shopping with you.
When it comes to customer retention, onboarding is a great way to nurture relationships and keep customers happy.
Case-in-point, a recent survey by Wyzowl showed that 86% of people report being more likely to stay with a company that invests in customer onboarding. However, 90% of customers also believe that the companies they buy from need to improve in this area.
It happens all too often that a company sells a product or service to a customer and then moves on immediately to the next sale. While making more sales is important, so too is ensuring the customer who has already bought from you receives all the support they need to get the most from their purchase.
A great customer onboarding process is to reach out to a consumer immediately following their purchase. Learn more about how they intend to use the product or service you sold them. Then tailor an onboarding program aimed at educating them on best-use practices and answering any questions they have. For instance, Replyco offers initial onboarding as well as all-access concierge customer support to make sure our users are always getting the highest ROI for their money.
Check in with Customers Regularly
An obvious-yet-highly-effective customer retention strategy is to reach out to your customers regularly. By frequently checking in with them, you are building a relationship and a special level of trust and camaraderie with customers.
The approach here can be very simple. Either pick up the phone and give customers a call every once in a while, or send a one-on-one email. The goal is to touch base with them and let them know that you are available for any questions, comments or concerns they may have.
Special Surprises for Customers
You can give your customer retention strategy a serious boost by offering special surprises to customers. After all, everyone loves receiving gifts. And by offering these kinds of unexpected bonuses, you are creating serious goodwill between you and your customers. You are also keeping your store at the top of their mind, thereby increasing the odds that they will come to you when they need a product or service you sell. That’s what customer retention is all about.
These special surprises can include free birthday items, special holiday discounts, random free shipping codes, etc. The list of potential ideas goes on and on. Get to know your customers. Figure out what would delight them most. And then get creative!
Next, improve customer retention by letting customers know that you value their input. According to a study conducted by ThinkJar CEO Esteban Kolsky, only 1 in 26 customers will actually go out of their way to lodge a complaint when they are dissatisfied with a company. The other 25 will simply take their business elsewhere without saying anything.
At the same time, FluidSurveys shows that approximately 1 in 4 people will respond to a survey if sent one. This is a huge opportunity to keep people from leaving by inviting their feedback and addressing any issues about which they are unhappy.
Use Empathy to Transform Customers into Super Fans
Once you have invited customers to provide feedback on your products and services, it’s time to empathize with any frustrations they have and take action to correct any problems.
An article on Entrepreneur.com states, “Truly understanding your customers’ needs means reflecting on their fears, desires, pain points and whatever keeps them up at night. If your sales team doesn’t intimately understand your customers’ lives, how can you expect them to explain how your products or services fit their lives?”
The article goes on to say, “Going beyond increased sales though, what’s even more valuable are loyal customers and strong referrals. To see repeat customers and customers transformed into super fans, make sure this empathy mindset enlivens the culture of your entire organization from customer service to the accounting department.”
After making sure you understand a customer’s frustrations and needs in relation to their feedback, take steps to correct the issue. That may include improving a certain product, addressing customer service shortcomings or even offering a refund or replacement item.
Turn Complaints into Customer Retention Opportunities
Once you learn to appreciate complaints, you will likely begin to increase customer retention numbers. As we’ve already discussed, few customers will actually lodge a complaint rather than just leaving your company entirely.
The customers who are willing to speak up and let you know when there’s a problem are the ones that enable you to make the necessary changes and improve customer loyalty. So, rather than seeing complaints in a negative light — embrace them as opportunities to strengthen and grow your business.
Want a great way to improve customer retention AND your company’s reputation? Make sure your business stands for something.
According to a Harvard Business Review study, only 23% of American consumers report having a relationship with a brand. However, a whopping 64% of those consumers who said they did have a relationship with a brand cited shared values with a company as the reason.
These days, more than ever, shoppers want to buy from companies that align with their own personal values. If you want to connect with customers and create a strong sense of loyalty to your brand, develop a way to showcase and exemplify a strong sense of ethics and identity. Take Bombas, for example. For every pair of socks or item the company sells, it also donates the same to someone affected by homelessness.
Also, companies such as Linnworks and other UK businesses are currently involved in programs aimed at helping people gain employment amid COVID.
Your program should, in some way, relate to your business. Sell pet supplies? Maybe you could donate a portion of your proceeds to animal shelters. Or, you and your staff could even volunteer at a shelter each month.
Another simple customer retention strategy is to maintain a frequent communications calendar. This encourages engagement while keeping customers informed of your company’s upcoming events, sales or promotions.
Your communications calendar should include a schedule for all types of outreach initiatives. From new customer emails to “thank you” notes to notifications of upcoming promotions, all of your communications should be planned and scheduled.
These follow-ups and customer emails should also be automated and pre-programmed to automatically send out at specific intervals in accordance with the customer’s journey. For instance, new customers should automatically receive a “thank you” note after their first purchase. And long-time customers who are a member of your customer loyalty program should receive any birthday promotional emails you program every year on their birthday.
Excellent Customer Service
Potentially the most important aspect of any customer retention strategy is customer service. There are a myriad of stats showing why customer service is absolutely essential to promoting customer loyalty. But here are just a few:
Hubspot research shows that 93% of customers report being likely to make repeat purchases from companies that offer excellent customer service. Furthermore, another survey commissioned by RightNow and conducted by Harris Interactive showed that 73% of consumers fall in love with a brand and remain loyal because of friendly customer service representatives.
Ensure your customer service team provides courteous, personable, knowledgeable and friendly support. In doing so, you can dramatically increase the odds that customers will remain loyal to your company.
Another important aspect of great customer retention and excellent service is to make sure your customer support team responds to inquiries quickly. In fact, according to a Comm100 study, customers are only willing to wait up to 45 seconds on average for a response via live chat.
In a similar study, New Voice Media found that customers who call customer service lines tend to hang up after holding for 11 minutes. Finally, speed of response and speed of resolution are seen as by far the most important aspects of the customer service experience, according to the studies consulted.
And as we already know, when a customer is dissatisfied, they are overwhelmingly likely to simply take their business elsewhere. By responding quickly (immediately when possible) to customer inquiries, you are vastly improving your chances of retaining customers for the long-haul.
If you’re a multi-channel eCommerce seller, this is where message centralizing software can supercharge your customer response protocol. For instance, if you use Replyco for messaging, then you can view and reply to customer inquiries from all marketplaces in one place. No more logging in to multiple accounts or worrying about emails falling through the cracks. Tools like automated sorting, auto-responders and email templates also help your team get to messages faster.
Keep Customers Happy No Matter What
As already evidenced, customer satisfaction is imperative to your customer retention success. That means you need to go the extra mile to keep shoppers happy no matter what. The requirements of this strategy will differ on a case-by-case basis, but the end goal should always remain the same: don’t stop until the customer is satisfied.
For instance, if a customer calls in because they are having trouble operating a certain product, don’t rush through your usage explanation. Stay on the call with them and walk them through the entire process.
And if explaining via phone isn’t doing the trick, try sending them a live video of you providing a full product demo. You could even have them use their smartphone to record themselves using the product, or meet via FaceTime. That way, you might be able to figure out where the usage mistake is being made and gently guide them on how to correct the matter.
Another incredibly important aspect of any good customer retention strategy is honesty. According to a compilation of statistics from Fundera, 43% of customers report having left a brand because they lost trust in a company.
There are few better ways to inspire trust in your company than by always being honest and transparent with customers. For example, if a situation outside of your control is causing shipping delays, don’t promise next-day delivery to shoppers. While they may not love having to wait longer for their items, they will appreciate the fact that you were upfront with them about potential delays.
Along with honesty in your customer retention program comes consistency. By making sure you are always delivering products, services and support in a consistent manner, you are showing customers that they can depend on you. Recent studies showed that 87% of consumers believe brands should put more effort into offering a consistent experience.
Think of this way: are you going to revisit a shop where you receive a different level of service and product quality each time you purchase from them? Or are you more likely to stick with a brand where you know exactly what to expect?
It is in our nature to prefer consistency and stability. Give this to your customers and they will be very likely to reward you with their loyalty to your brand.
No one likes responses to inquiries that sound like they’re the same reply that would be sent to every customer with a question. By personalizing your communications, you are increasing the odds of leaving the customer with a great impression of your company. And if they’re happy with the service they receive, they’re more likely to remain loyal to your brand.
This can be as simple as setting up your email response templates to automatically insert the first name of the customer when replying to messages. Personalized service can also include one-on-one phone calls or live chats and individually curated product suggestions based on shopping history.
Give Customers Something to Look Forward To
Next up is a fun customer retention technique. Keep customers coming back to your store by giving them something to look forward to. This can involve semi-annual sales, huge holiday-based discounts (such as for Amazon Prime Day, Cyber Monday or Black Friday), local events and more.
Whatever you do to keep customers excited for what’s down the road with your brand, make sure you advertise it heavily so all customers know about it. Send emails, post on social media, take out advertisements. And finally, regardless of what you advertise, deliver in full on any promises made.
Another highly effective way to retain more customers is to make customer reviews public and easily accessible. This is because customer retention is all about educating your consumers and encouraging trust and satisfaction in your brand. Your customers are more likely to trust you if your reviews are transparent and real. This act of being open with your customers instills a comfort level in them when buying from you.
In fact, a study by Spiegel Research Center found that 95% of customers consult online reviews before buying. Another survey by BrightLocal reported that 84% of respondents say they trust online reviews as much as personal recommendations from people they know.
Use Automation to Re-Engage
Want to boost customer retention? There are few better ways than by using automation to re-engage customers who have shopped with you before but who haven’t visited your store in a while.
By setting up a system to recognize when a shopper has not visited your shop within a certain length of time, you are giving yourself a chance to win back customers. Any system you implement should be set up to automatically send a “we miss you” sort of email to un-engaged customers. It can include information on current sales or promotions, reminders of their previous purchases with new product recommendations and / or discount codes for returning to your shop.
This outreach does two things that bode well for customer retention. First of all, it lets customers know you haven’t forgotten about them. This adds a personal touch to your communications. Second, it reminds them that you exist and helps to put your brand back to the top of their mind for shopping needs.
Anticipate Potential Difficulties and Create Triggers to Assist
A Salesforce survey shows that 74% of customers are likely to switch brands if they find the purchasing process too difficult or inconvenient. But there’s a simple solution to this problem. You should anticipate potential stumbling blocks and create assistive triggers on your website. This way, you can vastly improve your customer retention odds by eliminating possible problems.
For example, is there a specific point in the buying journey on your website that customers frequently ask the same question about? If so, set up an instant message that pops up at that point in the transaction directing visitors to help docs or answers to the frequently asked question.
Create a Panel of Customer Advisors
What better way to improve customer retention than by setting up a panel of actual customers to advise you on how to better serve your base? This may seem tricky, but it can actually be quite simple.
Invite a few of your most loyal and / or long-time customers to be members of the advisory board. Then establish meetings that occur at regular intervals in which they can voice their concerns, opinions and suggestions for how you can improve the ways you serve customers. You can also send them surveys or questionnaires to which they can respond, and / or provide a page that they can visit any time to offer feedback. For instance, Replyco utilizes a Public Roadmap in which users can view upcoming features and product releases, suggest new tools they would like to have, vote for their favorites and more.
Customer retention is all about keeping shoppers engaged. Invite your customers to sign up for a company newsletter. Then send that newsletter out at set intervals (weekly, monthly, etc.) to let them know about everything that’s happening with your brand.
Be sure to link up your newsletter to relevant pages you want customers to visit, like your store or a page that explains any sales you have going. And make your newsletters as entertaining as possible. The key is to engage and inform customers while keeping your brand fresh on their mind.
Customer education is absolutely critical to customer retention. Statistics and surveys compiled by Aspect, RightNow and other research firms show that 73% of customers value the ability to solve problems on their own. Furthermore, 53% of consumers believe it’s important to be able to find resolutions to issues without having to consult a customer service agent, while a full 55% report “falling in love” with brands that offer easy access to education and self-service tools.
This is why your educational tools are of paramount importance. Offer comprehensive help docs, FAQ pages and troubleshooting sections that enable customers to find solutions to their problems without having to contact you. This can also save you time and money because, not only will you retain more customers, you will also spend less time answering simple questions.
Engage Customers via Blogs and Social Media
As already mentioned, when it comes to customer retention, engagement is the name of the game. Keep customers plugged in to your brand with frequent content that is relevant to your products and services as well as their needs.
Do you sell pet supplies? Then keep a blog about all things related to pet care. That can include product recommendations, advice, guest posts from vets and the like. You should also update your social media pages regularly and keep up with what’s trending in your industry. Is there a certain illness going around that affects dogs? Let your customers know.
They will appreciate the information and will begin to look to you as an expert and trusted advisor in your industry. And they will keep coming back to you for their product needs.
Set Expectations with SLAs
You can also boost customer retention by setting expectations with SLAs, or Service Level Agreements. These are a set of expectations between you (the provider) and your customer. For instance, if you offer a satisfaction guarantee that promises a full refund if the buyer isn’t satisfied, that guarantee is part of your SLA.
Your SLAs basically include expectations about the level of service and quality you will provide, as well as remedies if those expectations are not met. In offering these clear terms to customers, you are helping them to trust your brand. You are showing that you are a company that delivers on promises and sticks to its word.
Provide Updates to Customers
Along the same lines of instilling trust through consistency and SLAs, providing frequent updates to buyers is another way to improve customer retention.
For instance, is a package’s shipping delayed? If you leave them hanging without a word, they may switch companies due to frustration. But if you let them know about the delay and explain the reasons, they will likely appreciate your honest and communicativeness.
Offer Discounts After First Purchase
If you’re looking for a quick and easy way to boost customer retention, this is it. Reach out to all customers after their first purchase and offer them something special. For example, offer a customer who has just bought from you for the first time a discount on their next purchase.
This will make an immediately positive impression on the customer and will practically ensure their return to your store.
Eliminate Buyer’s Remorse
Along the same lines as offering a special discount or perk after a buyer’s first purchase, eliminating buyer’s remorse will go a long way toward boosting customer retention.
We’ve all bought something on a whim and then wondered if we made the right decision. By making contact with a customer immediately after a big purchase from your store, you can mitigate the potential of them regretting having shopped with you.
Send them a message thanking them for their purchase and listing the amazing benefits of the product they’ve just acquired. Offer to provide a product demo or to answer any questions they may have while including direct contact information so they can reach back out to you any time.
Not only will this decrease the odds of them returning the item they’ve purchased, it will also increase the chances that they will visit your store again for their future product needs.
Continue Nurturing after Sale
In addition to eliminating buyer’s remorse, you need to continue nurturing customers long after you’ve made a sale. From emails that go out immediately following their purchase to follow-up emails months later to check in with them, your job servicing a customer is never done.
You need to make sure they always feel important. Let customers know how much you value their time and their business. Make sure they are always able to find answers to their questions and make contact with your service team. Send out sales reminders, holiday greetings, product demos, new release announcements and the like to constantly keep your company fresh on their mind.
Customer Journey Mapping
In order to keep your customer retention on track by nurturing customers, you also need to map their journey. After all, the communications you send out are heavily reliant on where they are in their relationship with you. Map every customer’s journey and set a strategic communications plan in place (relying on your communications calendar).
For example, implement a week 1, week 2, week 3 and so forth automated communications strategy for customers. Set up automatic emails that go out in accordance with when buyers have made a purchase or last-visited your store.
Keep Track of Data and Customer Metrics
In order to best tailor your customer retention strategies, you need to keep track of all data and metrics related to any initiatives you implement. For any strategy you put into place, use an organized system for measuring its success and determining how it contributes to your overall goals of customer retention and business growth.
You can then use the data you collect and analyze to inform your future strategies. For example, you may find that the best strategy for you is a combination of customer outreach, customer service and content creation (blogging and social media). Every company is different. Get to know your customer base and what works best to delight them and keep them coming back.
Happy Shoppers = Better Customer Retention
At the end of the day, all of these strategies have one thing in common. Happy shoppers lead to better customer retention.
To improve your customer experience, make sure you offer friendly service and quick responses. This is where Replyco can help. With centralized messaging for all your selling channels, you can provide lightning-fast replies and thrill customers. Our ticket-based pricing structure and convenient templates also enable you to boost ROI while saving tons of time.
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