Neal noted his ecommerce website uses Shopify, which provides retention data like which consumers are returning and how many times those customers order.
One of the other most obvious customer retention strategies is to reward shoppers for their loyalty, such as through a loyalty program.
Another tool to help keep customers coming back is automation. Paxton pointed to automation systems that simplify entire workflows for marketing teams, which includes re-engaging clients.
- What customer retention is and why it’s important.
- How to calculate customer retention rate.
- 13 customer retention strategies to earn loyalty and save money.
What is customer retention?
Why is customer retention important?
“Rather than requiring your marketing team to track which customers have expired, a marketing automation solution that combines AI and machine learning can automatically recognize when customers lapse and re-engage them with individually relevant content,” he said.
“The biggest factor is providing good service,” he added. “Sometimes the crickets or roaches will perish in route. It is imperative that we reship a new order at no cost. That one transaction may be a losing proposition for us. However, the long-term potential of retaining that customer greatly salvages the loss on that one order.”
What is customer retention rate?
It all starts with a good customer experience.
SurveyMonkey offers a survey template to help you get started.
How do you calculate customer retention rate?
You can collect customer insights through surveys, reviews, purchase behavior, and more, and then create profiles to execute these personalized experiences through deals or messaging.
An easy way to improve the customer experience—and therefore your customer retention rate—is to respond quickly to customer feedback, questions, and requests.
That really gets to the heart of why customer retention is so important for all businesses. In this post, we’re going to take a closer look at this effective marketing strategy, including:
13 customer retention strategies that work
And, of course, customer retention KPIs can also help businesses proactively improve customer retention. Metrics to track here include site traffic, conversions, and abandoned cart rates—as well as your customer retention rate.
1. Provide a solid customer experience
“You have the freedom to be innovative in the kind of loyalty programs you establish and the incentives you provide,” said Dustin Porreca, SEO Manager of marketing agency Elevate Demand. “The bottom line is that you want to make your returning clients feel like VIPs every time they visit your establishment. Allow them to know that they are valued and demonstrate this value via your behaviors so that they will continue to have a reason to return.”
“You will never be able to please every consumer on every issue, but surveys can help you find patterns that you may have overlooked,” said Matthew Paxton, founder of gaming server site Hypernia. “A good survey should include both multiple-choice questions and free text answer fields to allow customers to express themselves more extensively if necessary.”
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“I have seen my retention grow from 3% to 27% since using SurveyMonkey.” -Rohan Kadam, Biking Know How
“CRM is not just the application of technology, but is a strategy to learn more about customers’ needs and behaviors in order to build stronger relationships with them,” said Adam Ng, CEO of review site Trusted. “The CRM strategy focuses on putting customer needs first and delivering a superior, more personalized customer experience. Remember one satisfied customer brings ten new customers with him whereas one dissatisfied customer takes away ten customers along with him.”
2. Under-promise & overdeliver
“Implementing live chat can be one of the most effective customer retention strategies,” he said. “Customers are 59% more likely to buy if brands respond to their questions in under a minute.”
To recap, here are 13 of the best customer retention strategies as determined by the experts interviewed for this post:
3. Reward loyalty
“Transparency is a reliable and fair customer retention strategy both parties can benefit from.” -Eddie Bye, Physio Flex Pro
This, Joanne King, director of online music platform ICMP, said, also paves the way for brands to cross- and upsell.
Rohan Kadam, founder of the blog Biking Know How recommends online tools like SurveyMonkey to ask clients about their most recent encounters with your company. “I have seen my retention grow from 3% to 27% since using SurveyMonkey,” Kadam noted.
Repeat customers help ensure a steady flow of income and keep a business stable, said Sherry Morgan, founder of pet site Petsolino. And, in a perfect world, they also help grow a business through positive word-of-mouth marketing.
Or, Sep Niakan, managing broker of condo site Condoblackbook, noted brands can implement live engagement tools, such as video chat, so customer care teams can provide solutions on the first contact.
4. Use your data to personalize the experience
This latter metric measures how loyal customers are, which is especially important in an increasingly crowded market. An ideal range is 20 to 40%, said Jason Sherman, CEO of ecommerce platform TapRm.
Another way to enhance customer retention is through transparency. When brands are transparent with consumers, they feel more confident in making future purchases.
The good news is you don’t have to juggle all of this alone—the right customer relationship management (CRM) platform can help make the process of retaining customers a lot easier.
“Customer churn analysis assists stores in analyzing qualitative and quantitative signals from present clients [as well as possible new clients] in order to better understand how to keep them happy with what you’re doing—making it more likely that other consumers will follow suit,” said Rameez Usmani, CMO of Web Hosting Advices.com.
“Customer churn analysis assists stores in analyzing qualitative and quantitative signals from present clients [as well as possible new clients] in order to better understand how to keep them happy with what you’re doing—making it more likely that other consumers will follow suit,” said Rameez Usmani, CMO of Web Hosting Advices.com.
“Customer churn analysis assists stores in analyzing qualitative and quantitative signals from present clients [as well as possible new clients] in order to better understand how to keep them happy with what you’re doing—making it more likely that other consumers will follow suit,” said Rameez Usmani, CMO of Web Hosting Advices.com.
“Customer churn analysis assists stores in analyzing qualitative and quantitative signals from present clients [as well as possible new clients] in order to better understand how to keep them happy with what you’re doing—making it more likely that other consumers will follow suit,” said Rameez Usmani, CMO of Web Hosting Advices.com.
Part of a good customer experience also requires making the onboarding process as seamless as possible.
11. Be transparent
Customer retention rate, or CRR, is a marketing metric that determines how many customers a company retains over a given time period.
“Be conservative with your estimates in terms of what you’ll be able to deliver to your customers. Then, overdeliver on that promise,” Zhou said. “Always offer more value than your customer expects. That way, your services/products, no matter what your price point is, become a no-brainer for your customers.”
“When you do this, customers know what they need to know about the brand or the product itself. And this gives them a feeling that the brand does not conceal or hide something,” said Eddie Bye, founder of supplement site Physio Flex Pro. “Overall, it is a reliable and fair customer retention strategy both parties could benefit from.”
12. Use customer relationship management tools
The most common formula for calculating customer retention rate is: CRR = ((E-N)/S) x 100.
“That one transaction may be a losing proposition for us. However, the long-term potential of retaining that customer greatly salvages the loss on that one order.” – Jeff Neal, Critter Depot
One specific metric to look out for is churn rate. That includes both performance-related measures, like a decrease in repeat sales or purchase frequency, as well as analyzing each touchpoint in the customer journey.
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13. Automate where possible
Instead of waiting for customers to come with questions, comments or concerns, you can proactively solicit their opinions via feedback mechanisms like customer surveys.
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“You can improve your [repeat purchase rate] through customer retention strategies such as an optimized customer life cycle, loyalty programs, retargeting ads, and cart abandonment emails,” he added. “This creates a better post-purchase experience that drives customer loyalty and increases repeat sales.”
The 13 best customer retention strategies
“Make your returning clients feel like VIPs every time they visit your establishment so that they will continue to have a reason to return.” -Dustin Porreca, Elevate Demand
- Provide a solid customer experience
- Under-promise & overdeliver
- Reward loyalty
- Use your data to personalize the experience
- Live engagement tools
- Solicit feedback
- Listen online
- Monitor your retention data
- Pay attention to churn
- Make onboarding easy
- Be transparent
- Use customer relationship management tools
- Automate where possible
