8 powerful strategies to boost customer retention

This guide walks you through eight strategies to improve customer retention, with examples of companies that get it right, and actionable tips to retain engaged and loyal customers.

8 strategies to improve customer retention

Customer retention measures how many of your customers stay with you after their initial purchase. By retaining customers, you can improve metrics like purchase frequency (how often a customer comes back to buy something) and repeat customer rate (the percentage of customers who have purchased from you more than once). 

Improved customer retention typically means an improved bottom line. But perhaps even better than that, working to improve customer retention rates yields happy, delighted customers with a positive impression of your brand. 

Use these eight techniques to improve customer retention rates and show your customers you care.

1. Get to know your customers

You need a solid understanding of customers to know how to serve them. Research is the first step in figuring out their desires, pain points, and successes, and developing user empathy.

Quantitative and qualitative research can work hand in hand here to learn user behavior, and the causes and motivations of that behavior. 

To better understand their customers—and improve the customer experience (CX)—online greeting cards retailer Moonpig.com uses Hotjar Surveys:

Customer insights from sources like surveys can show you what you’re doing well and how you can improve, reducing churn and increasing retention.

2. Optimize and personalize experiences

Users today expect personalized experiences at each stage of their journey. The good news is that if you’ve put in the effort to get to know your users, this part will be easy—and even fun. 

Consider what your customer needs to have a smooth journey from Point A to Point Buy. 🤭 A seamless user interface design goes a long way toward optimizing the user experience (UX), and a consistently pleasant, personalized product experience (PX) helps prevent churn. Each interaction customers have with your brand and product helps shape your customer retention rate.

Online health-conscious grocer ThriveMarket finished first in the 2022 Retail Personalization Index due to its customer-centric attention to detail. The company uses an onboarding quiz and progressive profiling to create personalized shopping experiences—and loyal customers:

Optimizing and personalizing experiences on your site and across all other communications (like email, social media, and call centers) shows you care and boosts customer delight. And customers who feel valued are more likely to stick around for the long haul.

3. Engage through email

Sending welcome emails can encourage prospects to make an initial purchase. But a well-executed nurture sequence can keep them coming back for more. 

Take Grammarly, for example. The grammar-checking software not only sends out emails with writing and proofreading tips, but also delivers personalized emails with users’ productivity stats and achievements. Badges are unlocked after a set number of weeks of activity, gamifying the app and creating a sense of commitment to the platform—you don’t want to break your streak!

Personalized and timely emails help you connect with customers to increase loyalty and give them ideas of how to use your product consistently—or why they should upgrade to enhance their experience.

4. Improve customer service and support 

If there’s an issue, customers want to contact you right away—in a way that’s convenient to them. If it’s easy for them to get their issue resolved, you’ll likely gain a customer for life. 

Make sure customers can contact you through multiple channels—live chat and chatbots, a call center, email, and even social platforms. 

Shopify.com, for example, has built a loyal fan base through customer service and support. The online ecommerce platform has a help center for users who prefer self-service, community forums, and traditional contact options like email and live chat. 

Where Shopify really shines though is on social media. The company, which has nearly 400k followers on Twitter, responds in its fun brand voice to questions and comments:

Creating a helpful and nurturing online persona helps build trust and empathy that keeps customers coming back to you—they know you’ll take care of them.

5. Create a loyalty program

Loyalty or rewards programs use incentives like discounts and prizes to encourage customers to continue shopping with you. 

While well-known in the retail world (grocery stores, beauty retailers, and clothing stores all commonly offer these programs), SaaS companies are also hopping aboard the rewards train. 

Gusto, cloud software for payroll and human resources, offers you a $300 gift card if you refer someone who signs up and runs payroll at least once through the system. The person you refer gets a $100 gift card of their own, too.

Loyalty and rewards programs are a win-win: customers get bonuses and incentives, and you get a higher repeat customer rate.

6. Build dedicated communities

Communities, forums, and message boards serve a practical purpose: customers can get their questions answered without having to turn to your help or call center. But these venues also provide a feeling of unity that boosts retention rates.

SaaS company Figma, a collaborative tool for interface design, does togetherness well. The brand offers a robust community platform where users can ask questions, make connections, and get inspiration:

A community leads to a feeling of belonging that customers might not get from other companies, making them loyal to yours. 

Think about your why. Building a community can be time-intensive. Consider reflecting and goal-setting before starting a community around your brand. Brainstorm ideas to the following questions: 

7. Encourage reviews and testimonials

Social proof—like reviews, testimonials, and case studies—help guide customers in their product choices and shape their sentiment about a brand. 

One company that rocks in this department is Slack. The communication app posts videos on Twitter of real customers sharing their favorite platform features, and has a comprehensive customer success page:

Reviews and testimonials get the attention of new customers—but they also ensure that current customers stick around longer. As hype builds about a brand or product, loyal customers feel more justified in their purchasing choices, and are less likely to drop off.

8. Show your appreciation

You can show customers your gratitude in a variety of ways: thank you emails, discount codes, or customer appreciation days with site-wide sales. 

One way to leave a memorable impression is by sending hand-written notes or small gifts to loyal customers. Many of our interactions these days are digital—going tangible can help you show your attention to detail and stand out from the crowd.

Sending notes and gifts also triggers a sense of reciprocity: you’ve given something to the customer, and they feel compelled to provide you with something—their continued business—in return.

Select strategies that will encourage your customers to stick around 

Choosing the best customer retention techniques for your company means knowing your customers and understanding their needs. 

Once you figure out what makes your customers tick, they’ll want to buy from you again and again. Collect quantitative and qualitative data directly from your customers to see what they need to make their customer, user, and product experiences as comfortable as possible. 

By focusing on the user, you’ll create products and services that are a perfect fit, improve customer sentiment, and see customer retention soar.