How Do You Improve Customer Retention?


Marketing Insights for ProfessionalsThe latest thought leadership for Marketing pros

Wednesday, June 20, 2018

Follow the story of any successful business, and it is clear that its growth comes from building a solid customer base. Once a customer is acquired, it is essential to keep their business.

Article 6 Minutes
How Do You Improve Customer Retention?

Customer retention not only saves on work for the sales force, but will attract other new customers in the process, through recommendation. It’s similar to the difference between simple and compound interest.

 These returning customers are special and should always be rewarded for their loyalty. Future special offers, price reductions and other promotions only available to regular customers should always be clear for them to see. Here are some thoughts that apply across the board:

What is customer retention and development?

Customer retention is fairly self-explanatory and is simply the process of building trust and loyalty with your customer base so that they come back in the future.

Developing that customer base in the first place is the biggest challenge and so you need to think about what it is your business can offer prospective customers and why they should buy from you. Once you’ve been able to establish your USP (Unique Selling Proposition) and start finding your customers, you can then work on the strategy of retaining them.

Why customer retention is essential

Having a great product or reliable service is only valuable if it keeps customers returning. If your product or service is positively received but you only receive one sale per person as a result, this is perplexing. If the product was well received, where is the repeat business? Although customers may have thought well of – and purchased – your product or service, they will still need reminding or persuading to make another purchase. The work is far from over.

This is nothing new, of course. The importance of retention can be traced back to the time of Mad Men in the 1960s with Edmund McCarthy’s 4Ps marketing mix.

How to increase customer retention

After your sales staff have done all the hard work to convince potential clients that your company can provide everything they need, and more besides, it is essential that they stay with you for more than a short while.

It can costs businesses up to 25 times more to acquire a new customer compared to retaining one, so you need to ensure you build a good relationship with your current customers to see a return. Here are some of the best customer retention strategies to guarantee repeat business.

Make them feel special

Most companies in the digital world produce a regular newsletter for both potential and existing customers. Often, these are a wasted opportunity, consisting of the latest ‘news’ in their chosen field. A wedding planner, say, will have little interest in the latest developments in SEO from their website provider.

Re-arranging the newsletter to include something relevant to the customer, and using this as the main story, adds a valuable personal touch. Even something as simple as slotting a personalised business field into a template will add interest.

It is also essential to personalise the subject field of the email. The customer will feel that they are being spoken to personally, and not that they are the recipient of a pizza delivery flyer.

Make yourself special

Iconic brands such as Chevrolet, Levi’s, Apple and Sony all produce stylish, quality products, but they all have that extra ... Well, there isn’t a word to describe the combination of uniqueness, style, distinctive marketing and that mystery element.

Thinking about the customer experience and increasing your brand loyalty with that extra touch of something special is the ideal way to increase customer retention. To make customers want to be associated with your brand is something to aspire to.

Be democratic

Customers come in all shapes and sizes although it is essential to treat them all the same. Paying the same amount of attention to all customers, and placing the same value on them, will lead to a much more positive outcome. Training staff in this way, to give the same level of service to one-off customers as high-value, long-term clients adds value to your brand. In this way, every customer will feel valued; they won’t come back if they don’t.

In a statistical sense, it would seem more logical to pay the most attention to the most high-value clients. But this is a short-term, short-sighted view. Building a business from the ground up relies on the same customer retention strategies applying equally to customers large and small.


Acquiring new customers doesn’t stop as soon as the first invoice is settled. You need to build a long-term relationship with every customer, so thinking long-term is essential for the retention of all clients, and gaining repeat business. At the outset, offer a free Company Health Check or similar after three or six months. This means that you can cold-call the customer without it being a cold call. At this time, you can offer another scheduled free service, at the same time as reminding them who you are and what you offer.

Loyalty marketing such as this costs little but is a valuable tool. Promoting customers’ businesses through your own social media is a great, free bonus for them. Running brand awareness in the background without intruding on the customer’s day-to-day business can be a profitable way of showing that you care about them.

Pest control

While it is essential to keep in touch with customers, it is just as essential not to overdo it. Like yourself, they have their own business to take care of and may not have the time or the inclination to hear about your special offers, updates about your products or communications along the lines of “I was just passing and thought I’d pop by”.

Over-communication will only annoy people. They can see through these thinly-disguised sales pitches and often feel insulted that you think that they are unable to. Instead, schedule a time to get in touch, and agree this at the time of the initial sale. This could be when you think their stock is running low, when an update is available or maintenance is needed. Be an arm around the shoulder, not a pain in the neck.

Customer retention requires ongoing work 

To build a good customer retention strategy, you must treat every customer according to their needs, much as you would your friends or colleagues. It is essential to build a friendship, but not to overdo it. Work colleagues need to have a certain level of friendship, but not to the extent of going out together every night of the week. Similarly, your friendship with your customers' needs to be limited to what you have in common, which is their business – not yours.

Keep an eye on their industry sector, to see what is happening with their competitors. Armed with this research, you can impress your customers by demonstrating your knowledge and understanding of their business.

For more research and statistics about the current state of Marketing, click here.

Marketing Insights for Professionals

Insights for Professionals provide free access to the latest thought leadership from global brands. We deliver subscriber value by creating and gathering specialist content for senior professionals



Join the conversation...