3 Customer Retention Strategies You Want to Start Using Today

Many small business owners chase new customers when they’re better off focusing on retaining existing ones. Don’t believe me. Well, here’s a telling statistic: Getting new customers is five times more expensive than keeping existing customers.

That’s not to mention that improved customer loyalty contributes to improved profitability. According to a study by Frederick Reichheld of Bain & Company, a 5% increase in customer retention leads to an increase in profits of 25-95%.

The verdict is out: customer retention is critical to business success. In this post, we’ll share 3 customer retention strategies you’ll want to start using immediately.

Customer Retention Strategy 1: Gather Customer Feedback

If you know why your customers are leaving in the first place, you can figure out how to fix it. Start by gathering customer feedback. Focus on customers who recently stopped using your product or unsubscribed from your mailing list. There is a better chance that they will give you an honest review based on a recent experience. Here are a few strategies you can use:


Create customer exit surveys through tools such as SurveyMonkey. You can immediately display the survey after a customer cancels his account.

But surveys do have limitations. They often take the form of multiple choice questions and limit customer responses. But, there is an alternative.


Immediately after a customer has canceled their account, send them a follow-up email. Make sure your emails are well-crafted. Groove HQ is a perfect example of how sending the right message can alter response rates.

After launching a customer exit email campaign to understand why their customers were leaving, they achieved dismal response rates. But, their response rates soared from 1.3% to 19% when they changed “Why did you cancel your account” to “What made you cancel your account.”

Well-crafted emails are also a powerful way to re-engage inactive subscribers and build loyalty. Inactivity can be due to a variety of reasons, with a primary reason being irrelevant content

Regardless, you can rekindle activity by sending re-engagement emails. The company Office is one of the best examples of a powerful re-engagement campaign. They asked their readers to re-confirm their gender to make sure they were sending them the right products.

For further reading check out this post by Crazy Egg: 9 Customer Re-Engagement Emails You Need To Steal.

Customer Retention Strategy 2: Improve Customer Service

customer retention strategies

Poor customer service is one of the top reasons people leave and switch to another company. There is research suggesting that 71% of customers end their relationship with a company because of poor customer service.

Think of your own experience with a business which delivered poor customer service. Chances are, you left them, right?

Given the importance of customer loyalty for building loyalty and retaining customers, it’s important that you stay on top of it. Here are a few ways to do exactly that.

Train Employees

Train your staff so that they have adequate product knowledge and can deal with customer issues and complaints. How you handle a negative experience of a customer speaks volumes for you and your brand. With adequate training, your staff can turn complaints into an opportunity to boost customer loyalty.

Focus on Your Infrastructure to Support Your Staff

Use live chat interfaces, frequently asked pages, and contact forms. Make your support numbers and email addresses visible on the site.

Gather Constant Feedback

Every time you interact with a customer you need to use that as an opportunity to improve. For example, each time you deliver a service, let customers rate that service. It will allow you to swiftly detect and remedy and problems.

The company Bluehost is a perfect example of this. They ask you to rate the level of service you receive after a technical consultant helps you on their live chat interface.

Leverage Social Media

Social media is a powerful way to grow your business on a budget. But, it also can become a customer service nightmare. Negativity publicity can spread fast when someone complains. That’s why you need to be active on social media to deal with these issues.

Elon Musk recently gave everyone a lesson on this. When someone tweeted that people are using Tesla Supercharging Spots for parking and not charging, he responded agreeing it was an issue, took action, and resolved the issue in 6 days.

Customer Retention Strategy 3: Build a Customer Loyalty Program

Nothing builds loyalty faster than showing customers you care and that they’re valued. Having a loyalty program encourages repeat purchases and customers to switch from companies who don’t have one.

Loyalty programs can take a variety of forms such as discounts, exclusive offers, buy one get one free, loyalty points, and tier programs. For example, in my hometown, the local coffee shop gives me a free coffee for every 10 I buy. My bank also offers a tier program where rewards increase as I move up different levels.

Setting up loyalty programs don’t have to cost a fortune. There are many online apps to boost loyalty and customer retention. Up City lists 20 Loyalty Reward Apps for Small Businesses, and if you’re a Shopify or Weebly user why not visit their app stores?


Retaining your existing customers is critical to success. It’s far cheaper than chasing down existing ones, and it contributes to improved profitability. There’s much research that supports that finding.

That’s why you need to focus on customer retention strategies to make sure you’re retaining customers. In this post we highlighted three: gathering customer feedback, improving customer service and building brand loyalty.

What customer retention strategies do you use?

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