Berenika Teter
Berenika Teter 2 March 2020
Categories Customer Experience

Customer Retention: 5 Tips to Increase Loyalty

If you run a business or are in charge of any important process within the company, you probably have a lot on your plate already. At the same time, your clients are more demanding and impatient than ever - and if you do not deliver and live up to their expectations, they can easily switch to your competitors.

That’s precisely why it makes sense to invest time and effort in customer retention. However, before you start fighting for service retention and sort out some retention strategies, you should actually find out more about the customer retention definition and its meaning for your business.

What is customer retention?

Long story short: customer retention is the procedure of turning one-time clients into loyal and repetitive clients. What else can customer retention define? For example, a set of activities that can make a specific group of customers more likely to come back for more of your products and services. Loyal customers often make a customer base, willing to recommend your service further.

Why is customer retention important?

First of all, getting some new customers on board can cost you increasingly more than appealing to your existing one. In the world of overwhelming information chaos, reaching new customers is not as affordable as it was in the past, plus it's obvious that your competitors do not sleep. Statistics also give some food for thought: according to CallMiner research, U.S. companies lose $136.8 billion per year due to avoidable consumer switching.

Customer retention can help your business grow. If you provide flawless customer experience, your potential clients would have no reason not to recommend you further or turn back from you.

Benefits of customer retention

There are many benefits of working constantly on retaining customers, let us just list a few:

  • Increased customer satisfaction and revenue.
  • Loyal clients are usually more likely to give you feedback or be early adopters of your new products or services, so your company can save money on barely affordable external testing. The source of feedback is precious and hard to underestimate. 
  • Strengthen brand recognition due to recommendations, referrals and a strong, loyal community around your brand (and therefore, increase the level of understanding for your product or service flaws or betas). 
  • A one-of-a-kind chance to build a special bond with your customers (the aforementioned community).

Customer retention strategies

We define customer retention as the process of turning one-off customers into loyal clients and working on increasing retention rate. However, it is always easier said and done. What can you do to make your marketing retention strategy work wonders?

Make your customer feel important

The pillar of any strategy for customer retention is to make your current clients feel important. Brands often make a mistake of granting new customers and promising them the moon, instead of taking care of the customers already attracted by the brand.

For example, banks offer very appealing interest rates or free services to new customers, charging their existing ones a lot. Fortunately, this is about to change since the competition is fierce and banks cannot afford the decrease of retention of customers. Referrals and money for recommendations are just a few small activities introduced and maintained in order to grow.

How to make your customer feel important? Ask them for the opinion and feedback, encourage to share their comments on your service and make sure they are likely to interact with your business again.

It is not about adoring your customers, it is about appreciating their efforts, loyalty and relation with your brand. Needless to say that this is the most valuable and precious source of feedback which you would probably never get otherwise. If additionally, you take this kind of feedback seriously, your existing customers can pay their gratitude back, by being even more emotionally attached to your brand.

If you keep your customers fully informed about the status of your services for them, they may be less impatient and more understanding. Even if you encounter any obstacles, it is better to tell your customer about that then keeping them in suspense and unhappy.

Go an extra mile

Even living up to the expectations is not enough nowadays - exceeding the expectations is way more warmly welcomed than this. Companies who mastered customer retention know about it, so they work on seamless customer experience and building relationship with each customer. They know that amazing retention rates do not last forever either.

How can you go the extra mile in your business? It is not as difficult as it seems. Next time your customers order some products from your shop, add something small for free. Give them a handwritten note, thanking for booking with your restaurant again. While calling, ask them about their day and wish them a nice evening. Sometimes small things make a huge difference and define the client retention meaning.

If you build a positive experience, your clients are not only willing to come back to your business again - they are willing to recommend your company further, to potential new customers.

Of course, it goes without saying that before you start making something extra, you need to fulfil the basics and provide your customers with great experience first. No one is going to appreciate some small, extra things, if you do not deliver products on time or if your services are of low quality.

Create a loyalty program

While it freely connects with the other aforementioned points, it is worth highlighting on its own. Creating a loyalty program can be a great idea if you want to make the most of referrals and encourage your current clients to recommend you further. For many businesses, this is the main customer retention strategy which actually leads to generating more leads - and it is very popular in the world of e-commerce or software, but not only.


  • Dropbox gave 250mb extra storage to each customer who invited a new customer to use the service. 
  • Rawpixel gives unlimited downloads of Free collection for each customer who invites 5 new customers to sign up. 
  • Appsumo gives $10 referral credit for each customer who refers the service further and someone invests in any offer there.

We could list more of them, but it should be enough to see the scheme. Brands do not do it because it is a nice act of courtesy, not because they are bored or curious about testing out. They know exactly that they can use it for generating leads (new customers), as well as rewarding their current customers. Each and every customer has nothing against it as long as they get some benefits from it. While some loyalty programs are based on a system of commission fees, in many cases a particular customer will be happy even with a small gimmick.

Giving your current customers something for recommending you further is a win-win-win: your brand has a base of happy current customers you build relations with, your existing customers get something extra from you, and your potential customers can reach you in an easier way. What’s not to like?

Your first loyalty program does not have to be sophisticated - you can simply come up with a few rules, terms and conditions and redistribute it over your customers. You can give your customers something for free, discount their subscription or implement gamification and let them collect points for recommending your product or service. It is all up to you.

Be responsive across communication channels

You can't build a loyal community if you are unreachable. Make sure that you are active on social networks (including social media monitoring), over emails, calls or chat on your website. Omnichannel support is bread and butter for customer service teams nowadays and can visibly help you with maintaining and constantly increasing user retention.

If your clients know that they can reach you across many channels and get your answer in minutes, they will be more likely to keep interacting with your brand and purchasing your offers. It has a huge impact on subscription retention.

If you sell software (SaaS) and your clients cannot rely on you when it comes to onboarding or daily customer service, they may just drop the subscription. No matter what you sell, you should form a special "retention team" that could work on customer retention over many communication channels in a particular period of time.

Use tools for better customer experience

We already know that your company should be focused on customers - also existing ones. However, it can be really time-consuming, so in order to increase customer retention, you should make a kind of toolbox to use on a daily basis. One of the tools you should use to provide flawless experience and customer service over the phone is a cloud-based phone system.

With CloudTalk, you can serve your existing customers professionally since you can access a lot of information on why they call you and what their history with your brand is. You also can access these sets of information when calling them directly. Providing extremely personalized service is one of those customer retention strategies that never fail, and with CloudTalk you can strengthen the bond with your customers, answering their requests, needs and issues in time.

Start increasing loyalty right now

One of the biggest challenges for brands is to grow while making their customers happy and satisfied. However, they often think about getting some new customers instead of focusing on existing clients. The latter group can be nothing but a goldmine if they are treated in the right way, though. If you have never created any customer retention strategies, it is high time for you to do it now and start attracting not only new clients but also reach the ones you’ve already attracted and had.

Have you ever asked yourself "What does customer retention mean?". We hope that this short, quick guide can get you through the importance of customer retention, customer loyalty, and the benefits of applying some efforts to your strategy right now. Your retention rate can really skyrocket if you make some extra efforts towards it, so make your customers feel special - they will be coming back to your business.

Originally published here.

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