20 Examples of Customer Retention Strategies That Work

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Jared Cornell

Senior editor

Parul Saxena

Chief editor

Last updated: December 3, 2020

The inventor of the famous ‘Net Promoter Score or NPS,’ Frederick Reichheld of Bain & Company, did research that led to a huge paradigm shift in the business community. While most of the customer-centric businesses focused on grabbing new customers to boost their earnings, this research showed that a mere 5% increase in the customer retention rate increases your profits by 25% to 95%.

As more and more customers reach out to you via digital mediums, it has become essential to track, design, and optimize online customer journeys. 

All the major brands and legacy business organizations running for decades now look beyond high-quality products, top-notch customer experiences, and brilliant customer journeys. They have many other things as the major driving forces behind their revenue indices, and customer retention strategies happen to be one of them. They always look to retain their previous customers while acquiring new ones and ensuring that both categories have high indices for customer satisfaction and happiness. 

Customer Acquisition vs. Customer Success – Understanding the Difference:

The image below clearly shows the key differences between customer acquisition and customer success. 

customer success mindset

Even if you focus on selling products or subscription plans, the odds of selling them to an existing customer are 60 to 70%, and to a new customer are just 5 to 20%

However, while most such companies focus on customer experiences, they tend to neglect the existing customers’ customer experiences during their owning cycle. This starts a vicious cycle of investing in new customers to boost the ROI and sales figures while also losing the existing customers. 

Why spend 5% more on acquiring a new customer when you can earn manifolds by nurturing the existing customers?

In the following discussion, we will be sharing twenty customer retention strategies that actually work like a charm. Read them carefully, incorporate them into your business model, and learn the art of retaining your customers like never before.

20 Sterling Customer Retention Strategies That Actually Work

1. Work towards establishing a strong relationship instead of completing a transaction

As per a story in Harvard Business Review, only 23% of the consumers feel that they can relate to the brands they use. And, 64% of these customers cited similar values as the reason they can connect to the brands they value. Alex Valencia of We Do Web Content believes that when you strive for building relations or partnerships with your clients, they feel valued. Regular meet-ups, reports, and proactive interaction with your clients making them aware of what more they can achieve by staying in an association with your brand. 

The following screenshot from an analysis done by the Boston Consulting Group for customer success features tight engagement models as a crucial point:

keys to customer success

Takeaway:

Instead of letting your customers drop out of the sales funnel once a sale is made,  engage with them to nurture positive professional relationships they can value.

2. Focus on delivering surprises apart from loyalty rewards

Loyalty and membership rewards have long lost their sheen on the business landscape. Instead of being seen as some lucrative brand offering, they are now enlisted under the basic customer expectations from your brand. Delivering surprises to your customers is one sure-shot pathway towards customer delight and customer success. So, revamp your business model to incorporate surprise and delight in your loyalty program strategy. 

Some surprises like freebies still work like magic and will continue to do so. Kleenex’s “Feel Good” campaign is an excellent example where the sick people got a free kit of products from the brand just by putting a status on their Facebook accounts.

Takeaway:

Continuously work upon your loyalty programs, and don’t forget to deliver a little happiness to your customers in the form of surprises and delightful rewards.

3. Customer onboarding as a new retention strategy

When you have a great customer onboarding program, your customers achieve their desired outcomes, which, in turn, leads to increased retention. Telling your customers about your products, its features, enhancements, and ways to make the most of it in their context makes them realize the value of your brand offerings from the start. Hence, having a great customer onboarding program is one of the best customer retention strategies that you can opt for. Some of the most notable brands that offer excellent customer onboarding experience are Duolingo, Slack, and Dropbox, etc.

Takeaway:

Do regular check-ins within your customer base where you send proactive communication to your new and existing customers regarding the products and services you offer, they use; and they might use it as an add-on. 

4. Realize the power of a robust and all-inclusive query addressal system

As per the stats, 47% of US citizens and 59% of global citizens value brands that respond to social media queries. Take a look at the following snippet from this study in the following section.

statistics

Further, 58% of the USA citizens feel that the standards of customer service have improved in recent times. These stats show the importance of having a robust query addressal system with a multi-channel approach, a ticketing system, a knowledge base for smart features such as self-help modules, and allows the support team to work in a collaborative manner. Hence, having excellent customer support software like the Help Desk software 

Takeaway:

Make sure you listen to your customers on all the channels and send timely responses. Poor customer service standards can cost you valuable customers and leave bad word-of-mouth with far-reaching consequences.

5. Value the customer feedback and work on them

Not long ago, brands started to feel like customer surveys are dead as they have lost their efficacy as customer retention marketing techniques. However, they are very much alive and kicking! Maybe you haven’t been able to come up with an interesting survey for the customers to complete and not efficient enough to offer you a genuine and actionable pulse check. One notable example is the skincare essentials brand Glossier, which has a dedicated team working on feedback collection and personally responding to the feedback. Things don’t end here as the brand genuinely works on the feedback to deliver modified products.  They have an amazing reputation among their customers!

Here’s how much value Glossier puts in its customers:

customer feedback

Takeaway:

Make your brand an ecosystem thriving on the happiness and satisfaction quotient of your customers. Make them feel that they are being listened to, interact with them, and ensure the feedback you collect is worked-upon to deliver modified brand offerings.

6. Automate to make your proactive communication a success

We know that proactive communication is the key to customer success. We also know that regular proactive interactions boost your brand presence and keep your customers engaged with your brand. Take a look at the US and global stats for customers that feel proactive communication from brands make them feel valued:

customer statics

So, we agree that proactive communication is a must. However, how can you make it a success without automation? For example, if you have 5000 customers to whom you want to send messages twice a week and emails once a week, is it possible to do so without the help of automation? The answer is NO! So, invest in relevant automation to transform your customer engagement experience.

Takeaway:

Automation of business processes that directly focus on customers is a must-have if you want to build a customer retention strategy that is relevant to the future business landscape.

7. Share critical information with your customers

Suppose you are revamping your subscription plans, or you are changing the product bundles. Now, everyone at your office that is related to this revamping process is excited, right? But are your customers excited as well?

Moreover, suppose this revamping is a result of a survey you conducted to collect user feedback. Isn’t it important to share this information with your customers to make them feel like contributing to your brand’s growth? The answer is yes!

Many notable brands have taken the extra step to make sure their customers know all that they should know!

Takeaway:

Sharing critical information with your customers is one of the best customer retention strategies. This way, you make them feel as if they are an important part of your brand philosophy and brand offerings.

8. Tap the power of ‘personalized customer experiences’

Show your customers what they want to see. Make an offer that they might actually need and end up using. Make your product catalog seem as if it was handcrafted for them. From lookbooks to seasonal updates, from customized virtual personal shoppers to virtual mirrors, and from newsletters to subscription updates – leave no stone unturned to make sure your customers feel your brand to be the most relatable one among the crowd. As per Forbes, 80% of customers are more likely to do business with a brand that offers personalized experiences. 

Takeaway:

Personalized business offerings and personalized customer experiences are some of the best customer retention strategies that must never be overlooked.

9. Create and nurture brand advocates 

When it comes to spreading positive word-of-mouth on public channels, brand advocates can help you accomplish the task in a more cost-efficient, more productive, and humanistic manner. They can interact with your customers and future customers, help them clarify their doubts, and act as public and tangible speakers for your brand promotions. However, it is important to nurture them properly to help you in the long run.  

Take a look at the following image to understand brand advocate segmentation for better customer service skills.

customer segmentation strategies

Takeaway: 

Make your brand advocates your fool-proof warriors to cater to different strata of customer bases. Create talented advocates and nurture them with rewards to turn them into a long-run resource for your business.

10. Focus on being relevant to your customers

The modern business landscape has become a chaotic scene with tens and hundreds of options available in each product and service category. To add to the challenges of the brands, the customers have become technology-savvy and are always online. If you think you can stay relevant to your customers with a product or service basket dating back to 5 or 6 years, you are in for a brand failure and massive customer churn. Take a look at this innovative business model that shows the various components of customer success.

nexgen business model

Takeaway:

Stay relevant to your existing customers’ needs and requirements so that they don’t look for your replacements and stay associated with you for long.

11. Avoid funnel drop by improving the KPIs around customer support

The classic funnel for client conversion looks like this:

classic conversion funnel

This type of conversion funnel leads to an easy client drop after the sale has been made. This also leads to customer attrition or customer loss. Suppose you improve the key performance indicators around your customer service by opting for better and more efficient service tangibles. In that case, you can build a sure-shot customer retention strategy that will pay you well.

Takeaway:

Improve your KPIs around customer service by offering features such as easy access to information, self-help modules, and friendly staff, etc., to retain your customers.

12. Formulate a customer advisory board

If you are a large enterprise, it is essential to have team formations representing your customers, requirements, responses, and queries better and more efficiently. The formulation of a customer advisory board or department can do the job perfectly. You can then hold meetings and handover the customer management, engagement, and retention responsibilities to a team that is only working for customers. It offers a countless number of benefits, and increased customer retention is one of them!

Takeaway:

A customer advisory board can reduce the burden of other departments and help your brand curate delightful customer experiences that boost retention and ROI.

13. Develop social intelligence

You cannot imagine survival in this age of digital presence without a loud and clear presence on social media. Many notable brands, such as Taco Bell, JetBlue Airways, Amazon, Wendy’s, and Disney, have an impeccable social media presence. Also, they are not passively online. They continuously track their mentions and tags and respond in an unprecedented manner, so their customers feel leaving them a sin! Social media mentions can help you achieve otherwise impossible results. 

Take a look at the following image to understand more about this point.

social intelligence

Takeaway:

Have an active and sound social media presence to cater to all your customers. Social media intelligence is a must-have on your agenda for customer retention marketing.

14. Introduce Service Level Agreements.

Nothing speaks professionalism and commitment to the quality of services like a Service Level Agreement or SLA. Your existing clients and customers are well-versed with your service levels and already have a perception in their minds. To break this previously conceived notion and formulate a new image in their minds, you must develop a revamped SLA that can help them understand your enhanced and improved service portfolio in a better manner. This also helps in establishing innovative brand expectations. 

Takeaway:

Leveraging service level agreements for rebranding, image building, and customer expectations’ mapping can work wonders as innovative customer retention strategies.

15. Empower your customers with the convenience

Many iconic brands made history with an impressive and brilliant service portfolio. They continued to lure and entice their existing customers for decades and ended up being the most reputed names globally. One such example is Elizabeth Arden that held the Royal Warrant for a sterling 55 years for Queen Elizabeth’s lipsticks. Well, this is just one miniature example when it comes to empowering your customers. Similarly, IKEA offered an immersive and amazing virtual reality app for its customers to try its products in their room settings. So, if you keep empowering your customers with convenient services and products, they will continue valuing you. 

Takeaway:

Make your products and services accessible and convenient to such a degree that they become an indispensable part of your customer lifecycle. Creating history with your brand starts from the conception.

16. Understand the trade-off between under-promise and over-delivery

If you want to make your customers feel happiness and delight in every association element they enjoy with your brand; then it is essential to understand a fact:

Your brand should under-promised and over-deliver.

The following chart represents the performance of brands while catering to customer expectations.

Promises, once made, become an obligation that must be fulfilled. So, instead of losing your grip on your customers just because you were not careful while promising, it is one of the biggest tragedies that can happen to you. But, if you follow the dictum mentioned above, you can not only deliver delightful customer experiences but also appear as a reliable business entity.

Takeaway:

Make promises to your customers that are achievable and based on realistic grounds.

17. Don’t forget to follow-up with your customers

A robust client or customer follow-up can revitalize your customer lifecycle and bring the existing customers to the first stage of the sales funnel. Reach out to your customers regularly by organizing online meet-ups, live sessions, events, and experiential marketing and promotional events. Educate them about the product or service they are using and tell them what makes it so great. Help them in customization, and don’t forget to drop reminders about add-ons.

Takeaway:

Having a robust, efficient, and reliable customer follow-up system in your organization is one of the must-haves for revamping your customer retention programs.

18. Track the customer journey such that a problem is solved even before it occurs

Formulate a team that can closely associate with the clients and customers to collect their reviews and experiences with your brand. The team must engage with the customers to understand any probable issue that might arise in the future. Your customer service team can use dedicated survey software to capture customer feedback wherever required. Doing so will nip the issue in the bud and will pave the way for smoother customer journeys. 

Nobody can shed light better on your company’s loopholes and improvement areas better than your users. Be ready to lend an ear and work towards improvement. 

Takeaway:

Gain intelligence by working in close association with your clients for early problem identification and advanced resolution.

19. Focus on customer journeys instead of touchpoints

The customer journeys are no longer linear and have become a more inclusive lifecycle. So, instead of focusing on delivering service at various touchpoints, focus on entire journeys. This will help you make your brand a never-ending cycle of buying and selling. Take a look at the following image to understand this concept in a better manner.

optimize customer journey

Takeaway:

Focusing on individual touchpoints will make you lose track of your customers. Focus on the journeys, and you will have a wholesome snapshot of your customers’ preferences. 

20. Client segmentation for drafting better customer retention strategies

Client or customer segmentation offers you an in-depth understanding of the different types of customers you have. You can divide them into categories based on their importance in terms of ROI and other such parameters. This way, you can come up with targeted and personalized service portfolios.

You need to remember that every customer is different and plays a vital role in your business’s success story. They have different personalities and often exhibit different purchase behaviors. As a result, it becomes important to formulate ‘specific’ retention strategies instead of blindly following too many general tactics. 

Takeaway:

Customer segmentation allows you to cater to different types of customers in different ways and is one of the best customer retention strategies.

Final Verdict

If you ask – “What are customer retention strategies?” then understand it as a culture built around customers, their demands, habits, preferences, and evolving requirements. It is an assimilation of strategies that are ever-changing and constantly evolving. 

We hope that all the readers find thoughtful takeaways and examples of customer retention strategies from here.

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He is a customer-support specialist, a marketing evangelist, and a book lover, associated with ProProfs Help Desk. Jared is passionate about customer support and loves to solve customers’ queries. He is always keen to develop new strategies to help customers seeking Help Desk assistance for a delightful experience.

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