“Good customers are an asset which, when managed and served, will return a handsome lifetime income stream for the company” – Philip Kotler.

Over time and time again, businesses have focused on customers. After all, business thrives on generating leads, acquiring new customers that eventually drive sales. Often, in wanting to acquire new users, organizations overlook the existing customers. Several studies have claimed that 68% of sales come from your existing customers. While another survey from Brandongaille stated that around 12 – 15% of loyal consumers can contribute to 55  – 70% of sales.

Thus, if you are only obsessed with acquiring new customers, it would only help you fulfill short-term business goals. Moreover, it can also turn into a major pitfall, if you are looking to build a sustainable business. To build a thriving business, and to push profits, your business needs to focus on – retaining your loyal customers.

Although the retention strategy can differ from one industry to another, it’s a no-brainer that it is absolutely needed. Besides, if you already have loyal consumers in place, you can concentrate on methods to retain customers and not waste 7x of your resources to acquire new ones.

In this article, we will explore the key concepts and look at the best practices from the industry examples on how to build a successful customer retention strategy to scale your business.

Shopping bag - Image credit: pixabay.com
Shopping bag – Image credit: pixabay.com

 What is Customer Retention?

Customer retention is a blend of science and art, where you have to continuously tread the extra mile to establish a customer relationship by going above and beyond their expectations. Customer retention starts from the moment a customer comes in touch with your brand for the first time and continues throughout their life until there’s fallout. But, before we delve deep, here’s what customer retention strategy is all about.

Customer retention can be defined as tactics and strategies that a business implements to keep its existing customers stay with their brand. A successful method to better retain customers not only guides your business to success but also contributes immensely to driving business growth.

Equipping your team with the right tools, ensuring exemplary assistance on all touchpoints, can hit the ballpark in terms of delivering unmatched customer experience. In a nutshell, the retention strategy builds your customer relationship and elevates loyalty.

Moreover, optimizing customer retention highly depends on understanding the underlying metrics. But, how do you define these metrics? How do you even measure them? Let’s ponder on them for a bit.

Customer retention metrics that matter

1.Repeat customer rate

Repeat customer rate measures the number of customers who have already bought once from you and are willing to invest again. This is the backbone of measuring customer retention rates and essentially a great way to evaluate the success rate of your retention strategy. So, aiming for a high repeat customer rate will aid in boosting profits.

You don’t have to get lost in complex calculations. You can measure it with just these two pieces of information:

A.  Total Number of customers who have made more than one purchase

B.  Total Number of unique customers

Equation: Repeat customer rate = # Total Number of customers who have made more than one purchase / # Number of Unique Customers 

2. Purchase frequency

Purchase frequency is defined by how often users are coming back to buy from you. Calculating the purchase frequency can be done by using a chosen time frame, divided by the total number of orders made by unique customers.

Equation: # of Orders Placed in a Chosen time Frame/ # Unique Customers 

3. Average Order Value

This can be quickly defined as the amount of money a customer spends with your business. It is pretty straightforward to calculate. One can do it just by dividing your yearly revenue by the number of orders placed.

Equation: Total Revenue Earned / # Orders Placed

Next, let’s revisit the Customer retention strategies and ponder on best practices from the industry giants that work.

Methods to retain customers that work 

1.Adopt CRM tools

As your customer base grows, and demand surges, the need to expand your support team also goes up. Hiring more resources can get expensive and is not a sustainable model. Technology can solve that for you. That’s why businesses have turned to technology to supplement their customer service needs.

Bicycle - Photo by freestocks.org from Pexels
Bicycle – Photo by freestocks.org from Pexels

Brand Name: Santa Cruz Bicycles

Santa Cruz Bicycles was committed to providing the best customer service and invested in customer service resources. But, soon they understood the pitfalls of expanding the reps team as the business flourished.  Instead of hiring more reps, they started using CRM to create support tickets, track, and record customer interactions. CRM also helped the reps to keep a track of customer queries and provide support in a timely manner. This helped the Santa Cruz support team to be organized while creating a more delightful customer experience. 

 Best Practices:

  • Adopting a CRM tool like the Hubspot CRM tools helps take away mundane responsibilities from your reps head and helps them focus on improving the customer service experience.
  • As your business grows, refined tools like Service Hub with centralized customer service operations can help your support team collaborate and streamline issues to prevent churning. 
  • Adopting centralized tools works better than hiring more resources.
Pay by card - Image credit: pixabay.com
Pay by card – Image credit: pixabay.com

2. Offer Customers a Premium Experience

When a customer pays for your service/product, they are on the lookout to receive the ultimate experience.  A premium experience can help you elevate customer loyalty and gain their confidence for a lifetime.

Brand: American Express

American Express was the first credit card company who started to work towards making their customer feel special. They referred to them as “members” and started to reward loyalty points with labels like Platinum Member, Gold Member, and Silver Member. This not only helped them shape a “premium” experience but also, in turn, made the customers trust you.

Best Practices:

  • Try to give your product or service a ‘premium’ makeover to make your customer feel extra special.
  • Practice like reward points, air miles, or even loyalty programs can always add more to the premium experience that your customers crave.
Netflix - Image credit: pexels.com
Netflix – Image credit: pexels.com

3. Grab Customers attention

With a fleeting attention span, it is essential to grab your customer’s eyeballs. This is best done by the OTT giant Netflix, who is still miles ahead from its other competitors like Hulu Plus and Amazon Prime Video.

Brand: Netflix

Netflix has implemented state-of-the-art analytics in-place to record and analyze every single action of its customer. This not only helps them understand the pulse of their customers but also gives them a nascent idea on which original show works for what target audience. They played a huge gamble by buying exclusive rights of House of Cards based on just one but concrete hypothesis – users are willing to watch more by David Fincher. The director of the show had also directed “The Social Network”, which also received rave watch time.

Netflix has mastered the craft of customizing clips/trailers according to the audience and grab their attention in a span of 90 seconds. For instance, Netflix didn’t just settle on one trailer to introduce its users to the House of Cards. The Spacey fanatics saw trailers that exclusively featured him. While women audiences who had earlier watched Thelma and Louise saw trailers featuring the female lead of House of Cards. Lastly, the film buffs saw trailers that featured Mr. Fincher’s directing moments.

All these eventually lit up a path to improving customer engagement and retention. The use of big data and analyzing all forms of Data can give you incredible insights into your consumer’s behavior. And if you work around the data, you will be able to figure out the best way to get them to stay with you.

Best Practices:

  • Implementing big data analysis and constantly tracking your customer’s behavior can boost your growth and customer retention.
  • Molding your service/product to suit your customers’ needs/choices helps your consumers to come back over and over again.

4. Make Customers believe in Your Vision

Sometimes, other than tactics, brands can speak about their vision and what they stand for to their customers. More than often now, a brand’s vision is not paid attention as you get busy attracting new customers and the brand voice falters. However, to stand out and disrupt the vertical, one of the best ways is to speak to your customers’ hearts. Nothing can help you inspire and retain more customers than talking to your users about something that they deeply care about and positioning your brand around it.

Adult fashion footwear - Image credit: pexels.com
Adult fashion footwear – Image credit: pexels.com

Brand: TOMS

TOMS as a brand had the vision to make the world a better place. The brand believes in the “One for One” policy. Hence, for every purchased pair of shoes, a similar pair is donated to people in need. Till to date, they have managed to donate over 60 million pairs of new shoes. Since then, consumers have formed a connection with the brand. 

Best Practices:

  • While establishing your brand’s vision, start with ‘why’ first and then move on to deduce how to position your brand around it.
  • Utilizing emotional branding can help reinstate your vision and help your customers connect on an emotional thread.

5. Empower customers with the convenience

Understanding your customer’s pain points and leveraging it with convenience is another key to customer retention. Right now, with a smartphone device in hand, businesses who are still relying on offline flow should start moving towards online businesses and make it easier for their customers to buy and get it delivered whenever they want it rather than visiting a store.

Starbucks cups - Image credit: pexels.com
Starbucks cups – Image credit: pexels.com

Brand: Starbucks

Starbucks, the coffee goliath is known for its innovative sales customer retention ideas. One such innovative customer retention move was to put forward the Mobile Order & Pay feature in their app. This feature not only makes it easier for customers to order on the go and pick it up but also helps them to keep up with their busy schedules.

Best Practices:

  • Try to make your products and services as accessible as possible to your customers. 
  • Another best practice would be to identify the customer desires, pain points, behaviors to build strategies around it to empower them.

6. Who is better?

If you are looking to make your brand an obvious choice for your customers, then creating a rift in between you and your competitors, can do wonders for your business. After all, customers are always looking out for products that add value to their life.

Macbook, iphone, camera – Image credit: pexels.com

Brand: Apple

Apple crafted the “Mac vs. PC” ad campaign to showcase the difference between the inept PC and the cool Mac. The ad humorously also had a take over how Mac is a better choice than a regular PC. This marketing campaign became the talk of the town and generated a lot of disputes. With a single ad, Apple was able to position it apart from its competitors and established the brand that reinvents with its customer. It helped them identify customers who are willing to purchase Apple products.

Best Practices:

If you stick true to your brand values and integrity, it gets easier to grab customers’ attention who might just be your best buds in time of need.

As a brand, you should be bold enough to project your opinions on the issues and stories that matter the most. This would help your marketing team create a rally effect with your story and get the best results.

7. Leverage Brand Personality

In today’s world, for bigger brands, it can get quite challenging to come across as authentic and human. But, with few tricks up your sleeve, you can definitely leverage your brand personality and keep entertaining your customers.

Booth branding business - Image credit: pexels.com
Booth branding business – Image credit: pexels.com

Brand Name: Tesco

Tesco is a supermarket chain with over 2,000 stores across Britain. Folks at Tesco chose Twitter as their medium to showcase their brand with a human touch. Interacting with other brands and customers helps you add personality traits to your brand, which will eventually help you stay ahead of your competitors.

Best Practices:

  • First, try to differentiate and identify your audience personas to better communicate on their preferred channels.
  • Try to encourage your customers to talk of your brand directly and most importantly remind them about this throughout their association with your business.
  • Plus, adding personality traits to your brand conversation can help you stay away from making the messaging stale and canned.  

8. Use subscriptions to bolster the experience

Subscriptions can really fire up your business if done in the right way. It can not only get you regular customers to your platform with an added advantage, but it can also increase your profits.

Pay by online - Image credit: pexels.com
Pay by online – Image credit: pexels.com

Brand Name: Amazon

Amazon introduced Prime as a subscription model that was initially created to deliver quickly. But soon it became popular. Since its launch, they’ve added other benefits, such as access to Amazon’s Instant Video platform one-day delivery, etc. It’s a move that looks like it’s going to lead you into trouble, but it yields better when calculated on a long-term basis. Amazon’s losses rose to $1-2 billion in revenue every year, but they got profited as there was a sudden spike in demand. 

Best Practices: 

  • Keep the subscription fee minimal to gain customer loyalty. 
  • Providing perks in the form of content, events, discounts is another way to leverage this approach.
  • Also, focus on customer development and knowledge of your audience’s desires and pain points to attract and retain them.

9. Usher your customers with positive feelings

As a brand that has been around for a longer period of time, using experiential marketing can help you tap into positive sentiments and promote delightful customer experiences.

Coca cola bottle - Image credit: pexels.com
Coca-cola bottle – Image credit: pexels.com

Brand Name: Coca-Cola

During the 2012 Summer Olympics, Coca-Cola ran a 70-odd-day campaign to promote the “Coca-Cola Beat Generator” app. It was showcased during the roadshow and involved an experience that brought together sports, music, and Coca-Cola.

Wondering what were the results? They garnered over 16,500 visits to the website and had around 1.78 million Facebook impressions.

Best Practices:

Try to leverage the positive sentiments and create a sense of positivity around by indulging your customers on to new experiences outside of your products.

10. Educate your customers

Never underestimate your customer – another golden rule of thumb in the book of how to retain customers. So, if a customer has stumbled upon your website, trying too hard to sell your products/services would just make it worse. You can miss the opportunity of getting a loyal customer as they got turned off by your over-the-top sales pitch. Just educate them on why you are better rather than trying to close the deal.

 Woman in front of her computer - Photo by RF._.studio from Pexels
Woman in front of her computer – Photo by RF._.studio from Pexels

Brand Name: HubSpot Academy

HubSpot Academy offers a huge number of free sales, marketing, and customer service tips, hacks, training videos, and certifications to promote learning. This will helped them establish HubSpot as a brand that values learning and is looking to help users hone their skills too.

Best Practices:

Always offer unique and exclusive perks/experiences to engage with your audience community and keep them in the loop of constant learning so that they keep coming back to you.


The customer is king!

So, design your client retention strategies with a solid understanding of your customer needs and serve them exactly that. Alongside your product/service, impeccable customer service helps you gain your consumers’ trust and loyalty.

Make sure you implement your consumer’s suggestions and acknowledge them. Also, don’t forget to tell your customers about how much you love them. 

Please feel free to reach out to us at Grabb.ai to understand what your customers need from you and how to scale up your business with the right customer retention strategy.

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