Customer Retention Strategies To Explode Your Business In 2020

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Customers are the fuel that keep your business running and effective customer retention strategies will keep them buying from you over and over again.

Without a strong focus on customer retention, you could quickly start losing customers to the competition. That’s why it’s so important to focus on customer retention within your company.

A lot of companies make the mistake of spending 80% of their time on acquiring new customers and just 20% on retaining them. We actually believe it should be the other way around, because it costs 5x more to acquire a new customer than it does to retain an existing one.

And that, ladies and gentlemen, is why we put this guide together for you. But before we get into the “how”, let’s look at the “what” and the “why”.

What Are Customer Retention Strategies?

Before you jump into different tactics to keep clients, you need to know what customer retention strategies really mean.

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At its core, this practice involves keeping customers from leaving your company and switching to a competitor.

By preventing that from happening, you’re retaining them – hence the name customer retention.

But this isn’t a one-time thing you do to maintain your customer base: It’s something that should begin the day you acquire a customer and continue throughout your relationship with them — if you want to keep them as a customer, that is.

Why Is Customer Retention Important?

No one likes the idea of losing customers. However, failing to keep customers will hurt much more than just your ego. It will also affect your bottom line.

Here are just a few stats that show how important customer retention is for your business, according to the book “Managing for Quality and Performance Excellence” and Harvard Business School:

  • 65 percent of a company’s business comes from existing customers
  • Improving retention rates by 5 percent can increase profits by 95 percent
  • It costs 5 times more to find new customers than to keep current ones

It really can’t be overstated how important your current customers are to your business. With the typical company losing 15 percent of its customers each year, you need to start taking steps to keep from being part of that statistic.

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How To Measure Customer Retention

Before you can tell how well you retain clients, you need to be able to track your Customer Retention Rate (CRR).

You can track the rate on a monthly, quarterly or annual basis depending on what works best for your business.

The goal is to see how many clients you kept during that time period, compared to how many you had at the start of it.

To calculate your Customer Retention Rate, you need to know the number of customers you had at the end of a period (E), new customers acquired during that period (N) and the number of customers you had at the start of the period (S).

Then, plug those numbers into this equation:

[(E-N)/S] x 100 = Customer Retention Rate

Now, let’s break that down with an example (because, math). Say you start the month with 1,000 clients and have 1,100 by the end of the month: You lost 25 customers and gained 125 Here’s what that would look like:

[(1100-125)/1000] x 100 = 97.5

So, you would have a 97.5 percent customer retention rate, which is great. A CRR above 85 percent is what you’re aiming for – but the higher the better, of course.

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How To Improve Your Customer Retention Rate

Once you have numbers to monitor, you can start incorporating some tried-and-true customer retention strategies to get your CRR closer to 100 percent — which is the ultimate goal.

“Make a customer, not a sale.” —Shep Hyken, customer service expert and bestselling author

Create a Delightful Customer Experience

A large part of retaining a client is making them loyal to your brand and company. But creating customer loyalty isn’t something you can just manufacture or ask for: It’s something you have to earn.

“You don’t earn loyalty in a day. You earn it day-by-day.” —Jeffrey Gitomer, author

According to consulting group Rare’s report, consumers say loyalty is primarily driven by likability (86%) and trust (83%). And interesting tidbit: Women are more brand loyal than men.

You might not be able to force loyalty on to your customers, but you can give them reasons to stick with your business. Some options are rewards programs that give them discounts or bonuses after every purchase.

You can structure your customer loyalty program however you want: maybe people earn points toward rewards by sharing your content on social media, liking your pages, visiting your store, buying a certain amount of products or anything you want them to do.

Get ideas on how to structure your rewards program (and start building loyalty) from big brands like Starbucks:

Starbucks Customer Loyalty Program Gets It Right


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Promote Dedicated Customers

Similar to a rewards program, you can also entice customers who have been with you for a while by giving them a special title or making them a VIP.

For example, the longer they’re with you or the more products they purchase might mean they move up in your customer ranks.

New customers could be at the bronze level, ones who have been with you for a year could be silver and the top level could be gold.

You can even just label them as “Awesome” at a certain point — it doesn’t have to be complicated.

Or, you could name your top customers VIPs and send them special deals throughout the year. It’s a strategy that’s especially popular in the retail and credit card industries, but it has applications across markets.

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Show Them Inside Your Company

Relationships aren’t one-way streets, so help your customers get to know you and your team. Posting blogs, photos and videos about your team is a great way to do that.

You can feature an employee each month on your blog, for example. Just don’t make it stale like so many other blogs out there. Here are some good questions you can have your team member answer in the blog post to liven it up:

  • What’s something not many people know about you?
  • What was your first job?
  • What do you like to do in your free time?
  • What are the top 3 things on your bucket list?
  • What’s your favorite part about your job?

Having these types of culture blogs help your customers get to know the faces and personalities that bring your brand and business to life.

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Make Paying Easy

There’s a variety of options you can use to make paying for your products and services easier and ideally, completely automated.

When it comes to processing payments, there’s no point reinventing the wheel. Companies like Stripe and Recurly have built incredible, flexible payment platforms that almost any company can use.

So how can you make paying easier for your customer? Here are two ideas.

First, you can send them recurring emails with a “Pay Now” button if you sell a subscription product. Second, you can give them an option to set up automatic payments. Just do whatever is easiest for them and you’re on your way.

Put The Customer’s Needs Above Everything

It’s easy to get preoccupied with what you’re selling and forget who you’re selling it to. Customers are much smarter than you probably give them credit for, and they’ll know if you’re optimizing your business for revenue first and customer happiness second.

Make everything about your customers and their experience first and then see how your offerings fit into that — not the other way around.

Ask what they’re struggling with and see how your products or services can be the solution. If they can’t, then invest the time and resources to improve what you’re already selling.

Don’t get lost in the mindset of short term revenue goals. The company with the long-term vision always beats out its short-term focused competitors.

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Build Customer Dependency

Another benefit of being at the top of your game is that your customers will depend on more than just your products and services – they’ll also rely on your experience and knowledge.

After you cultivate that dependency, your customers will be more likely to turn to you for advice (via your blog, Youtube channel, account managers, etc), which is exactly what you want. Now they’re relying on you for more than just the tangible things you offer.

You can show your level of knowledge by posting how-to videos, in-depth guides (like this one!), interviews you’ve done with the media, etc.

Remind Them Why They Chose You

People have short memories. I mean, can you remember what you ate for lunch yesterday? Surely I’m not the only one who struggles with that.

Customers are quick to forget how your services helped them in the past or how far they’ve come since they started using your company. So, remind them.

Have your services or products helped them increase their productivity or made their day a little better? You could send them an email showing them where they were when they came to you and how they’ve improved since then (with your help, of course).

Think about it like the before-and-after effect. We all love seeing how someone or something has progressed — especially if it’s us. You can use charts, graphs or whatever method works best to show the change.

Customer Experience Management Chart


Anytime you can make your customers see your company’s value, it’s a huge win for you.

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Online Customer Service Strategies That Work

Most companies have finally realized they can’t just do the bare minimum and expect people to stick around when it comes to customer service. So it’s no wonder that revamping how you approach customer service can improve your customer retention rate massively.

Instead of reacting to issues as they happen, make customer service something that happens before the problem occurs.

Reach out to clients throughout the year to see if they’re having any issues or if there’s something you could be doing better. Try asking them, “How are we doing?”.

This proactive approach shows initiative on your part and also allows you to fix problems before they becoming bigger ones — keeping your customers from looking to a competitor’s offering.

And considering 82% of consumers in the United States say they stopped doing business with a company because of a poor customer experience, it’s not something to take lightly.

Take A Proactive Approach

No one likes negative surprises: finding out they missed a payment, waiting on a package that was supposed to be delivered or learning they missed out on a sale. Prevent your customers from having to deal with these disappointments by keeping them in the loop.

You can send them a text if they have an upcoming bill, give them tracking information on a shipment or email them about discounts or any other information they need to know (before it’s too late). They’ll appreciate your help and feel more connected to your company.

Get Employees On Board

You may be the face of the company, but you’re not the only one interacting with your customers, so you need your team members to be committed to customer retention and service if you’re going to succeed.

Beyond letting them read this article (of course!), it’s important to explain to your team why retention is vital to your company. Since they’re on the frontline, you can also get their feedback on ways to improve customer service.

Plus, the more you involve your team in the strategic direction of your company, the higher morale will be – plus, an appreciated employee is a happy employee. Showing your employees respect also helps retain customers because that mindset trickles down to how they interact with your customers too.

It all comes full circle.

Set Expectations Up Front

We’ve all heard the saying “under promise and over deliver.” Heck, it’s almost used to the point that we forget how critically important that statement really is for every business.

“The key is to set realistic customer expectations, and then not to just meet them, but to exceed them — preferably in unexpected and helpful ways.” —Richard Branson

The earlier you can set expectations, the better. For example, if it normally takes you an hour to respond to customer feedback, let them know you’ll get back to them in the next 24 hours. That way, you have a little buffer if you’re slower to get back to them — and you’ll give them a positive surprise if you get back to them sooner.

You can also set expectations by sending customers a short email when they sign up with you laying out what they should expect as one of your customers. You can also use this email as an opportunity to surprise and delight them.

Create Deliberate Opportunities For Feedback

The more connected your customers feel to your company, the more likely they are to stay with you (Have you caught onto the “connected” theme with all of these tactics yet?).

The easiest way to stay connected to thousands or even millions of customers is of course, social media.

Don’t just post one-way updates and photos on Facebook, Twitter and Instagram though. You should also create deliberate opportunities for customer feedback. Ask open-ended questions, post polls and encourage them to share their thoughts on a topic.

While the responses you get can help you learn more about your customers and what they want, don’t forget to keep it lighthearted most of the time like Jeff Barrett, CEO of Status Creative:

People want to connect with other people (NOT companies), so humanize your posts by putting a photo as your profile image or adding the name of the person who made the post.

Speed Up Your Response Time

Just like you track your sales leads in your CRM, you should also monitor your response time for customer support. There’s no excuse for their questions to sit in your help desk for days, or worse, going unanswered altogether.

Research and calculate your average response time for customer inquiries and then take steps to improve on that as quickly as you can.

The “how” isn’t nearly as important as the “when”. In today’s here-and-now culture (and with mainstream adoption of chat bots and messaging apps already here), your customers expect a response almost immediately.

Customer Support Statistics


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How to Improve Brand Loyalty

Share Your Company’s Values with Your Customers

Think about the people you’re most drawn to. Do they have similar values or ideas? We tend to relate to others who feel the same way we do, so help your customers connect with you by sharing your company’s values.

Here are some things you can share:

  • Business practices: What’s important to you and your team (examples include hard work, family, perseverance, dependability, giving back, etc)?
  • Organizations or causes: Are there any groups or causes you’re passionate about and support?

Post about it on social media to help your customers better relate to you. Coke has even created products and an entire marketing campaign around their values of friendship and sharing:

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Become A Thought Leader

You want to be the one company your customers trust and turn to when they need the products or services you provide. That’s what’s going to set you apart from the competition and keep them coming back for more.

Basically, your goal is to become the undisputed thought leader in your industry, and make sure your customers know it.

The best way to become a thought leader is to think about how you can help your customers well beyond just the products and services you offer. Today that means putting out helpful content on a regular schedule.

Start by focusing on problems you know your customers are experiencing. Then think about how you can use what you know to help them. Next, create your content (such as blog posts, short Youtube videos, stories on Snapchat, etc) and get it in front of customers via social media, email marketing, etc.

The key to becoming a thought leader is 1) consistently producing content and 2) making that content more like edutainment (a mix of advice and fun).

Remember – everyone has a short attention span, including your customers, so don’t take yourself too seriously and keep your content short and useful.

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Keep Your Contracts Simple

If you sell using contracts, make sure you keep them as simple and as easy to understand as possible. Here’s a good litmus test – if your contract needs to be reviewed by a lawyer before a potential customer can sign it, it’s too complicated.

Contracts can repeal a lot of potential customers too, so keep that in mind. One option that works really well is to have flexible payment terms (i.e. no contracted period) but to offer a 20%+ discount for customers who are comfortable signing a 6/12/24 month contract.

That’s win-win.

“Do not try to include everything. It’s better to develop a service contract that would be highly desirable to 40 percent of customers than to develop something that would be only moderately appealing to 90 percent.” —Norman Hood, founder of “The Exit Plan Show”

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Position Yourself To Over Deliver

Creating moderate customer expectations helps set the stage for you to really wow them — so make sure you do just that. Not only will it make your customers happy, but it will also help you differentiate your company from competitors.

Here are some ideas for how to go the extra mile:

  • Give gift cards to customers who have experienced a problem with your product
  • Show customers you’ve listened to their insights – for example, let them know if you made a change because of something they suggested
  • Empathize with their problems and make it a personal goal to fix what’s wrong
  • Check on customers even when they haven’t reported an issue
  • Send discounts or a small gift on their anniversary of being your customer

People remember bad experiences more than good ones, so make sure you limit those as much as possible.

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Keep It Consistent

From your customer service to sales, your entire company needs to operate as a unified force. Customers shouldn’t love working with one department and hate another. Your whole team should be consistent.

That starts with your team’s training and how they’re taught to handle different situations, like customer complaints or questions.

You can also rely on your CRM to keep track of each customer and how they’ve interacted with you in the past. Encourage team members to save notes when they speak with a customer, so in the future the rest of your team will have a mini-history of everything that customer has inquired about.

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Make Them Feel Special

Think about a moment where you truly felt special as a customer. Maybe someone went out of their way to help you, or they took the time to get to know you and your needs. Remember that? So will your customers.

You could send them a handwritten note thanking them for their business or better yet, record a short video for EVERY customer thanking them for putting their trust in your business.

The best way to make your customer feel special is simple – think about what you’d like to see a company do for you and then emulate that.

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Never, Ever Sacrifice Quality

You can use every trick in the book to keep customers, but if you let the quality of your services and products slide, so will your customer retention rate.

Remain true to your company’s core values and high level of quality — which are probably the things that attracted new customers to you in the first place.

You can ask customers to rate the quality of your services and products when they make a purchase, either through email or directly on your site.

If they don’t give you the highest rating, make sure you reach out to them to see what you could have done differently. Your customers will appreciate that you care about their feedback, helping them feel more connected to your company and catching them before they possibly leave (once again, it’s all about having that connection).

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A Simple Way To Boost Brand Loyalty

One of the simplest ways to boost brand loyalty is to ask your customers for feedback. The other is to understand the right marketing mix to use, even before they become a customer.

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Customer Engagement Strategies That Boost Revenue

You might be an experienced salesperson who closes nearly every sale. But what happens next? Do you move on to a new prospect and hope your current customers stay where they are?

That’s a mistake many business owners make: they stop marketing to their clients.

Marketing your business and services isn’t just something you do to attract new clients. It’s also a way to engage your current customers, showing you’re thinking of them and care about any additional problems they’re having that you can help solve.

Try sending them an email when you have a new piece of online content or if there’s something interesting going on within your business. You can keep it short and sweet:

Emailing Customers With New Blog Content


More Than Just A Number

Everyone wants to feel like they aren’t just a number – and your customers are no different. Show them you know them on a personal level, not just as a paycheck

That can be as easy as always addressing emails with their names or sending them messages on special occasions (birthdays, anniversaries working with them, holidays). Break that corporate speak and show you’re a real person who cares about your customers.

Build Trust And Relationships

You’d do more for your friends and family than you would a stranger, right? Don’t be a stranger to your customers — work to cultivate trust and relationships.

Trust takes a while to happen with clients, but some ways you can help build trust include being honest (especially when you’re in the wrong), being transparent and doing what you say you’re going to do when you say you’re going to do it.

Leverage Marketing Automation

A solid relationship requires constant work and communication. But don’t worry – that doesn’t have to mean more on your plate.

The level of personalization available in marketing automation software today means you can email relevant, timely content to each of your customers based on what they DO or DON’T DO. It’s all easy to set up, completely automated and completely personalized.

For example, you can email new customers the day after they buy. If they open your email, you can send them a follow up immediately. If they don’t, you might wait 2 weeks to send a follow up and take a different approach in that email.

Our favorite marketing automation tool is ActiveCampaign (we use it to send millions of emails every month). It’s simple to get up and running and does all of the heavy lifting for you once you’ve created your campaigns.

ActiveCampaign's Automation Builder

Host VIP Events For Customers

If you have local customers, invite them to an event like a picnic, focus group or another type of social event. The benefits of in-person events are twofold. First, you can pick their brains for feedback. Second, they get to relax and enjoy being with your team on a more casual level

That creates a positive relationship and helps build their brand loyalty for your company. After all, how many of your competitors are thinking about hosting in-person events for their customers? Hint – probably none.

Re-Engage Laggard Customers

Do you have a few wayward customers who are on the verge of leaving you for greener pastures? Maybe they haven’t interacted with you in a while, or their purchasing habits have stalled.

Try emailing those lost sheep to let them know you’ve missed them. It will help put your company front of mind and also give them the chance to reach back out if they need anything. You don’t want to sound desperate, so keep the message light and even a bit comical:

Customer Re-Engagement Email


Email Isn’t The Only Channel

You could be doing great things to keep your customers. But if they don’t know about it and don’t see it, you’re wasting your time.

You need to know where your customers are — whether that’s social media, email, Messenger, in person or over the phone — and then reach out to them there.

Not only does that help you interact with them, but it also shows them you know what communication method they prefer. It’s another way to give your customers a more personal experience when dealing with your business.

Find out the best way to reach your customers simply by asking them. You could make it a quick question that pops up when they purchase something (while you have them there), or it could be part of a survey you send out after the sale.

Customer Updates Via Text Message


Ask Your Customers For Feedback Regularly

Stop trying to guess what your customers want and expect from your business and start asking them. It’s a simple idea but you’d be amazed at how many businesses simply don’t do it.

Gathering customer feedback can help you figure out how to improve and grow your business, while also helping customers feel heard and valued.

Asking for customer feedback on your products and services shouldn’t be a one-time thing but something you do regularly – such as once a quarter or once a year.

You can do that by emailing them a simple survey. You can place a feedback form on your web site. You can also use live chat for a more casual, one-to-one approach. The channels through which to collect feedback from your customers are almost endless. The point is that it should be done regularly.

In this guide we’ve given you our best tips to retain more of your customers. If you’ve never asked your customers for feedback, now is a great time to start!

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