customer-retention-tips
customer-retention-tips

21 Expert Tips for Customer Retention

How do successful companies retain their existing customers? 60 experts from all industries share their proven customer retention strategies.

Updated September 16, 2020

Contents

Contents

Gaining new customers is important, but if your company doesn’t retain those customers, it won’t grow. Plus, the lifetime value of existing customers is higher than that of new customers, as you don’t have to spend money to acquire existing customers. It’s also easier to earn sales from people who already trust you.

And best of all, loyal customers often refer their friends to your business, which brings in new customers and helps you grow even further.

Since customer retention is so vital, we wanted to know what strategies experts use to retain customers in their own businesses. We surveyed 60 experts to get their insights.

  • 26 marketers’ businesses offer products or services for one-time purchase.
  • 24 marketers’ businesses offer ongoing services (until cancellation).
  • 10 marketers’ businesses offer subscription services (monthly or annually).

A majority 83% of all the experts we surveyed agree: It’s more beneficial to focus on retaining existing customers than it is to gain new customers.

But what customer retention tips did they offer? We cover the strategies they shared later in the article. First, let’s examine what factors they thought contributed most to customer retention, and how much time they devote to retention vs. new customer acquisition.

retaining customers vs gaining new ones

Which factors contribute to customer retention strategy?

We asked each marketer to pick the one factor most crucial to their customer retention strategy – and the quality of a product/service was the clear winner on all accounts. Product/service quality was chosen as the number one factor overall, as well as in each of the three business types (one-time purchase, ongoing service, and subscription).

  • 37% of all experts identified quality of product/service as the most important customer retention factor
    • 35% of experts in one-time purchase businesses
    • 42% of experts in ongoing service businesses
    • 30% of experts in subscription businesses

The quality of product/service was especially important to businesses offering an ongoing service, with 42% of marketers noting it as the number one factor in customer retention. It was a clear winner, with the other three factors only ranking 13% (customer service, personalization, and value for cost).

Similarly, all three business types also chose stellar customer service as the second most important factor (sometimes tied for second with other factors).

  • 18% of all experts identified stellar customer service as the most important customer retention factor
    • 23% of experts in one-time purchase businesses
    • 13% of experts in ongoing service businesses
    • 20% of experts in subscription businesses

We provide a full breakdown of results below.

All businesses

beneficial customer retention factors: all

One-time purchase businesses

beneficial customer retention factors: one-time

Businesses that offer ongoing services

beneficial customer retention factors: ongoing service

Subscription businesses

beneficial customer retention factors: subscription

How much time do businesses spend retaining customers?

Even though 83% of experts find customer retention more beneficial than customer acquisition, do their businesses put their time where their mouth is? We were curious to find out how much time businesses spend on customer retention vs. customer acquisition, and if the type of product or service affects how much a company prioritizes retention.

Although the time spent on retention varied greatly overall, things change when we break the findings down by business type.

  • 63% of experts at ongoing service businesses devote over 50% of their time to customer retention
  • 60% of experts at subscription businesses devote over 50% of their time to customer retention
  • But only 28% of experts at one-time purchase businesses devote over 50% of their time to customer retention

This makes sense, as ongoing service and subscription businesses have more to lose if they fail to retain a customer. These businesses are built on consistent contact with customers, and actively strive to form lasting relationships so their customers will continue to use their services.

We provide a full breakdown of results below.

All businesses

time devoted to retaining customers: all

One-time purchase businesses

time devoted to retaining customers: one-time

Ongoing service businesses

time devoted to retaining customers: ongoing service

Subscription businesses

time devoted to retaining customers: subscription

Software used to encourage customer retention

When it comes to what software programs are used to encourage customer retention, email marketing software was the most popular, with 60% of marketers saying they use it.

Email marketing software is highly versatile for customer retention. After a first-time customer gives you their email address. you can use the software to craft targeted campaigns to encourage another purchase, or send out enticing mass mailings. From coupons, to sale notifications, to rewards program invitations, the possibilities are endless with email marketing software.

CRM software was the second-most used, as noted by 40% of experts; and referral program software was third-most used, with a total 33% of marketers.

customer retention software

21 customer retention strategies from experts

Now that we’ve broken down the data on the benefits of retention, and how much time experts spend on customer retention, let’s dive into the 21 customer retention strategies shared by our experts.

1. Make sure your business offers value to a customer

Lindsay Kirsch of Simple Scalable Systems shares, “Before I onboard a new client, I ensure they are a good fit for my business services. From there, we create a clear and comprehensive project plan, and have very open and honest communications. In order to effectively retain customers, service must go above and beyond. I provide extreme value – crystal clear communications, willingness to be flexible, and often provide support even after a project ends.”

2. Make a solid first impression

Camille Chulick of Averr Aglow says, “We start by making our UX enjoyable and individualized. We offer a quiz for new customers to find out what product is right for their problems. Customer retention starts before they even make a purchase. We strive to delight them every step of the way. We want them to feel good about their choice, which decreases buyer’s remorse.

“And when a customer starts using the product, they usually know exactly what to expect. There are very few of our customers who end up with an order and don’t have a good understanding of how this will help them.”

3. Set customer expectations

Grant Aldrich of Online Degree shares, “Set customer expectations, like a fast response to inquiries or a simple purchasing process. It’s difficult to satisfy someone you barely know, so try to understand what your customers desire more. Customers want to feel empowered, not controlled. Making the customer feel empowered takes empathy, so be honest when making a promise. Don’t ever lie or promise expectations you will unlikely reach. Never go below expectations.”

4. Don’t underestimate the basics of quality products and stellar customer service

Heidi Marzke of Waterfield Designs shares, “The best way to retain customers is to provide both a premium quality product and stellar customer service. When customers have a good purchasing experience and their expectations are exceeded when they receive their product, they will check back with your company first the next time they need something you sell.”

Guy Shapira of Ambrosia Treatment Center says, “Loyalty is tied to your brand reputation. Your reputation, and the deliverables you provide your customers, are directly related to retention figures. If you don’t deliver, you will have neither loyalty or retention. We always do right by clients and that’s why they come back to us and refer their peers to us. No matter what sector you’re in, whether it’s construction, app development, medical, or so on, you have to focus on customer service if you want to remain competitive. The alternative is that you’re constantly chasing new customers, which we all know is more of an investment in both personnel efforts and hard expenses.”

Carrie McKeegan of Greenback Expat Tax Services tells us, “We pride ourselves on our stellar customer service, so going the extra mile is imperative when retaining customers. Of course, this may start at the top, but it trickles down to every member of our team. From quick email responses to strategic moves, we aim to offer unparalleled customer service under even the most difficult circumstances.”

5. Under-promise and over-deliver

Tom De Spiegelaere of Tom Spicky explains, “Customer retention is best achieved when you follow the golden rule: ‘Under-promise and over-deliver.’ Customers will always have a set expectation before they transact with you. Whether they’ve seen your campaigns or someone recommended your services to them, they already know what they want to get from you. It’s our job to exceed those expectations and go an extra two miles to make sure the customer is satisfied. Great customer experience is key to retention, and delivering more than what you promised is an excellent way to solidify your brand in your customer’s mind.”

6. Personally check in with customers regularly

Matt Erickson of National Positions advises, “Too often, businesses think the work is over after the contract is signed. But like any relationship, personal or professional, you must continue to go above and beyond with communication – even if you are just checking in to say hello. If you are in an industry like marketing, these weekly check-ins are very important. We go beyond sending a report that shows how a client’s campaign is performing. We take their success personally, and keeping open communication regularly helps let our clients know this.”

Eulises Quintero of Titoma agrees, “Constant and quality communication with your customers is vital. Implement a CRM system in your company that better allows you to keep an optimal track of your interactions with each client and use this to your advantage. Make each client feel they are the most important client you have.”

Ben Walker of Transcription Outsourcing says, “We communicate with our clients as quickly as possible, 24/7. Even on the smallest things they email us about, we reply as quickly as possible and let them know we are working on it. Tons of communication is key. That includes email, text, phone calls, and video conferences. We don’t hide anything from them either. It’s all on the table so they know as much as we know.”

Daniel Foley of Assertive Media shares, “We have implemented a Customer Call Calendar, where each account manager checks in with our clients at least once a week – unconnected to strategy meetings, report calls or catch-ups. This helps us identify any hiccups before they become big problems, as big problems usually lead to cancellations. Treating our clients as part of the team (informally) helps them feel appreciated and like us, as well as our work. It’s harder to cancel with a company when you like them.”

Joshua Strawczynski of JMarketing explains, “We believe in a very personalized approach: The more contact the better. We want to know the customers’ dreams, problems, and aspirations. They need to feel like part of the solution and be actively engaged. People buy from people. If you believe in those people, if they are your friends and allies, then you will continue with them, even when times get tough.”

7. Maintain a strong relationship with the customer

Bobby Reed of Capitol Tech Solutions shares, “Our most successful customer retention strategy is to maintain and encourage the relationship between the salesperson and the contract signer. We encourage our sales team to reach out quarterly to each of their closed sales, and invite the customer to happy hour, lunch, or morning coffee. By maintaining that personal relationship with the person who actually signed the contract, we are able to get insights from the customer’s side of things that don’t necessarily get discussed during the implementation of the project. If anything isn’t going well, we are able to address it with that team. We can also continue to push our services to the contract signer, and make suggestions for additional work that our account managers discover. By maintaining that relationship with the original sales person, and taking it beyond a formal setting, we continue to serve our customers well, and maintain a strong relationship with our clients.”

8. Offer services that best mesh with a customer’s needs

Greg Brookes of Kettlebells Workouts says, “To encourage customer retention, we work hard to provide unique services that will help our customers see results – quickly. We offer our customers the services that make the most sense for them. In doing so, we think ahead to situations that may not have arisen, but we’ve prepared for – just in case. Being prepared is an important part of being successful.”

9. Stay connected with your customers

Elaine Rose of ReviewInc says, “Staying connected with your customers has proven to be vital. By personalizing and connecting with your customers via email, surveys, and SMS messaging, this gives you the valuable opportunity to relay information that can be beneficial for your customers, and learn their needs. Utilizing an online reputation management software that can automate this process is essential for every small business.”

10. Ask for feedback from customers

Jeremy Owens of Seriously Smoked tells us, “Customer retention is heavily dependent on customer satisfaction. As such, I recommend businesses to ask for feedback from customers continually. No business is flawless, and continuously changing to better one’s service helps increase customer satisfaction. Afterward, it increases the customer’s chances of being a repeat patron. Consider automating your email marketing with emails asking for feedback. Aside from the minimal investment involved, you also get access to invaluable information about what customers have to say about your service.”

11. Examine a customer’s product use patterns

Tim Denman of ServGrow tells us, “During any conversation with our subscribers, members of our customer support team and account managers ask them additional questions that help us determine customer needs and patterns of how they use our product. Therefore, our offers to extend the service or upgrade to a higher tier are entirely based on understanding our customer’s needs and don’t look like just an upsell attempt.”

12. Educate users on your features

Alexandra Zamolo of Beekeeper advises, “We believe a good education on how to best use our services can make all the difference when a customer is faced with whether to continue their use. If there are features the customer hasn’t used or perhaps wasn’t even aware of, then it’s our team’s job to be sure they are kept informed, so they see the true value of our services.”

Malte Scholz of Airfocus recommends, “Encourage your customers to try out app features which they may not be using to their full extent. Too many people end up churning because they just haven’t used the product the way it’s intended to. Using our app analytics, we can see which customers bought our product but just haven’t used its best features. We then use in-app messaging to guide them to the features which they can benefit from the most.”

Reuben Yonatan of GetVoIP shares, “My best customer retention strategy is creating engaging and informative content. Statistics show if you provide short tutorials that cover the features of your product or service before you hang up with the customer, you will experience a 6% reduction in churn.”

13. Use engaging email drip campaigns

Jeff Moriarty of Moriarty’s Gem Art says, “Because our average order is over $1,000, we really want to keep those customers coming back. This is much easier when they already trust us. To create that trust, we have very engaging drip campaigns set up depending on the customer’s exact purchase. Our company follows up with automated emails talking about caring for that purchase and recommending other types of products. These continue over months after the purchase and are normally quite successful.”

14. Surprise customers with a personal touch

Grant Aldrich of Online Degree advises, “Offer surprises like a handwritten note to customers.. Everyone likes positive surprises, including surprise packages, offers, or gifts from companies they support. A handwritten note in a package takes less than a minute, especially if you have customer cards ready. Customers love it, and it shows that you value them. The sacrifice is worth it – trust me, feeling wanted and appreciated is a trait we all share.”

15. Offer valuable discounts

Samantha Story-Camp of Pip & Lola’s Everything Homemade shares, “After every sale, we send out a 25% coupon code for future purchases. That code never expires. We appreciate customers coming back to us and reward them accordingly. Our customers know that we appreciate them because we tell them constantly.”

Michael Lowe of Car Passionate shares, “We like to offer returning customers discounts so that they know we acknowledge their repeat business and appreciate it. By doing this, not only are they more likely to buy products because of this discount, but they also will buy more products to get another discount in the future.”

16. Motivate customers with loyalty programs

Chane Steiner of Crediful asserts, “A top customer retention strategy is to provide loyalty programs and similar incentives for customers that continue to do business with you. This can include exclusive deals for long time buyers, an enhanced and more personalized shopping experience, and an overall show of gratitude and appreciation towards the customers that continue to shop with you. The happier you can make returning customers, the more you can form a strong relationship with these people and make them proud to spend their money at your company. This may take a bit more time and effort, but it is far more powerful and will give you more long term revenue than chasing one-time buyers.”

17. Launch a referral program to create advocates

Adam Green of Currantweb shares, “We offer a referral program to all customers. If a customer recommends a friend or anyone directly to us, once that new customer joins, we will lower their monthly direct debit (customers pay monthly for our service). A customer can do this multiple times until they are paying nothing per month for their site. We have seen this method work well for a number of customers and so far, not had any customer leave who is receiving a discount on their pay monthly site.”

18. Monitor retention metrics

David Garcia of ScoutLogic says, “We design customer retention programs to have three components: defining success, monitoring performance, and managing the outliers. On defining success, for every business, there is a crucial set of metrics to determine what makes a customer likely to renew. These metrics could be the usage of your product, the number of engagements with your team members, or their pricing relative to the competition.

“Once you have mapped out these success conditions, you will want a process and tool to measure them. My company looks at these client health check metrics every month. Now that you have this process set up, it is all about managing the outliers. If you see a customer’s usage dipping, or no one has talked to them in two weeks, or their pricing is 20% above the market, you know you need to initiate specific activities to get that client back on track.”

19. Be transparent

Chris Gadek of AdQuick asserts, “Transparency is one of the most effective strategies for customer retention. Many clients often feel as if they’re not a part of the process, and this can be a huge mistake. Some companies like to just supply the services or complete a project, without keeping in touch with the client and being sure that they’re aware of the strategies that are being implemented. This can allow them to see all of the hard work that you’ve put into a successful outcome.”

20. Get team members on board

Andrea Loubier of Mailbird asserts “To encourage customer retention, be sure every member of your team is on board. Let them know, as the old saying goes, the customer is always right. Give team members the independence to make concessions when the need arises. Making an immediate decision or offering a discount or a free add-on is much more genuine when done on the spot, rather than making the customer wait for an approval.”

21. Treat every customer as a new customer

Ethan Taub of Goalry tells us, “It’s true of most businesses that everyone jumps all over new or potential customers, while leaving existing customers on hold. Instead, treat every customer as a new customer. Over-deliver on every call and email to ensure that the customer got exactly what they wanted and left the conversation truly satisfied.”

Wrapping things up

Now that you’ve heard from the experts, it’s time to focus on retention and integrate some of these strategies into your business. Focusing on customer retention will help you increase customer lifetime value, bring down your customer acquisition costs, and create mobilized advocates who will refer new customers to your business for free.

Looking for more inspiration? Be sure to check out our customer loyalty playbook, our growth marketing guide, and our article on customer retention tactics.

 

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