Increasing Customer Retention Rates for Your Business

8 Customer Retention Strategies to Boost Your Sales

three girls wearing large hats on a shopping spree
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Image by Martin-Dm © The Balance 2019

While many business owners and marketers are focused on attracting new customers, the best customers are the ones they already have. Boosting customer retention rates by 5% increases profits by 25% to 95%.

Because the best marketing campaigns have response rates that are often on the lower side, you can see the benefit of focusing on client retention and reengagement. While you should always continue efforts to bring in new business, ensuring you have a significant customer retention strategy boosts the lifetime value (LTV) of each customer, and can dramatically impact your financial bottom line.

Customer Retention Strategies

Most customer retention strategies include customer loyalty or brand loyalty programs. However, the best customer retention practices allow you to build a more meaningful and lasting relationship with your customers. Here are some ideas for your company to consider: 

  • Focus on Expectations: The service strategy “under promise and over deliver” is the secret to making customers feel you are doing a superior job. For example, if customers expect shipping times of about a week, and their packages arrive in 3 days, they feel you are outperforming for their convenience and satisfaction.
  • Build a Trusting Relationship: Customers will be more loyal to your brand if they don’t feel you are constantly trying to sell them something. Therefore, aim to become an expert in your field and share knowledge, whether in the form of a blog, inspirational Instagram posts or regular email updates. As a source of information (and inspiration) to your clientele, you can build a stronger emotional connection as your company’s communication rises above the general marketing noise.
  • Provide Excellent Customer Service: Excellent customer service policies and practices can turn disgruntled customers into personal brand advocates (who spread the word about your product or service for free). Some things to try to include: a generous return policy, 24-7 online support, and a quality call center. By showing your clients that you’re there for them no matter the circumstance, you ensure a strong relationship going forward.
  • Value Feedback: No one likes to hear complaints, but for business owners, every piece of negative customer feedback is a crucial opportunity to improve your product, your communication, your service, and your relationships. Even if you think you are getting enough feedback through review channels and customer service complaints, you should be soliciting additional feedback from your clients through regular surveys, interviews and special rewards as part of your on-going marketing plan. The information your customers will share is invaluable in shaping how you can improve your efforts.

In today’s data-rich environment, there’s no excuse not to personalize your customer communications.

  • Get personal: In the simplest form, this may mean using first names when sending emails. If you have a more advanced program, you can recommend products based on a customer’s past purchases, send refill reminders, and add birthday or anniversary messages. These incentives can make a customer feel cared for by your brand in a more genuine way than your average retailer.
  • Reward the behavior you want: “Word of mouth” referrals are one of the best marketing tools available to businesses. You can incentivize your current customers to spread the word about your products or services with a referral program, reward points, loyalty club, or special discounts when they leaving reviews or share on social. By making them part of your marketing plan, they increase your brand visibility and get rewarded in the process.
  • Make things easy: As you grow and are able to upgrade your website, loyalty programs, or payment processing systems, look for ways to make transactions faster and easier for customers. Think about Amazon’s 1-Click ordering, Walgreen’s text refill reminders that require only a single click to renew a prescription, or supermarkets that allow customers access to all their store coupons with a single scan of a card. When you save your customers’ time and effort, you give them something truly valuable.
  • Build a stellar workforce: As your company expands, you cannot be the only person interacting directly with your customers. Therefore, it’s incredibly important that you have great employees. However, the numbers aren’t everything. It’s about both quantity and quality, which means finding and keeping staffers who will work hard to keep customers happy. Finding the right people to represent your brand means spending time and energy on recruiting and training programs. Make sure every employee has the right attitude and understands the importance of their customer interactions. Their work helps ensure that each and every client will think the best of your brand.

Bottom Line

A current customer can be a wonderful ally to your business, as well as your next most profitable sale. By taking the steps outlined above, you can help build brand loyalty, create a business staffed by ‘customer champions’, and give an on-going boost to your bottom line.

Article Sources

  1. Harvard Business School. "The Economics of E-Loyalty," Accessed Oct. 1, 2019.


  2. Journal of Services Marketing. "Emerald Insight: Under-Promising and Over-Delivering: Pleasing the Customer or Strategic Blunder?" Accessed Oct. 1, 2019.


  3. Massachusetts Institute of Technology Sloan Management Review. "Why Customer Participation Matters," Accessed Oct. 1, 2019.


  4. Harvard Business Review. "How Valuable Is Word of Mouth?" Accessed Oct. 1, 2019.


  5. Cornell Center for Hospitality Research. "Customer Satisfaction Through Service Excellence," Accessed Oct. 1, 2019.