Do you wish your customers would stick to you like glue? In a digital marketplace that feels like it’s changing by the second, the battle for customer retention is tougher than ever.
Fortunately, the 37 handpicked customer retention strategies we chose for this post still work—and really work—with real-world examples from leading companies across a variety of industries.
What is customer retention?
Customer retention is the effort your business puts into keeping customers engaged so they’ll bring their business back to you instead of going somewhere else.
Defining customer retention
Yes, the basic definition is simple. But there’s a critical first step in crafting your customer retention strategy that a lot of companies gloss over—defining who your best customers really are.
Is it about the money they spend? Sure, that can be part of it. If you’re a retailer, for example, the amount of money spent in your store is a big part of defining your best customers. But it isn’t the only factor.
Another one, arguably the most important one, is loyalty—not just how long customers stay with you or how often they buy from you, but how often they influence others to buy from you, too.
In a world of 24/7 social media, where word-of-mouth is still the best advertising any business could ask for, customer retention doesn’t necessarily mean repeating business. It means inspiring your customers to spread the word about you.
Why is customer retention important?
The bottom-line importance of customer retention boils down to the numbers. According to McKinsey & Company, it takes 3 new customers to make up for the value of 1 lost customer. In other words, each customer you already have is as valuable as 3 new ones.
Add in the simple fact that attracting new customers tends to be far more expensive than keeping your current customers happy, and you can understand why more and more businesses are focusing on customer retention as a key marketing strategy.
But there’s another number that matters even more—the world’s top growth companies achieve 80% of their value creation not by growing their customer base, but by gleaning new revenue streams from the customers they already have.
So if you want to run your business like the world’s top brands, try shifting a healthy portion of your marketing efforts away from customer acquisition and apply those efforts instead toward creating valuable new products and services for the customers you have today.
How to measure customer retention
There’s more than one way to measure customer retention. As you decide how to measure it for your business, think about the kinds of retention that matter to you.
Do you have a subscription service? Start by measuring how long your customers stay with you. That’s an important measure of your success.
For a retail business, you might also care about how often people open your emails, how often they email your deals to their friends, and how often they post about you on social media.
In other words, what specific customer actions do you want to measure and retain because they’re valuable for your business?
Once you know what those are, you can choose how you want to measure them to track the success rate of your customer retention strategy.
How to retain customers
No matter how you measure it, the key behind every customer retention strategy is giving customers an experience they find valuable.
That means providing great products and services, but it can also mean a great shopping experience, unique packaging, friendly customer service reps, a fair return policy, and so on.
Retaining customers hinges on providing an extraordinary experience at every touchpoint along the way, not just satisfying your customers but going the extra mile to surprise and delight them.
The customer retention strategies that follow all seek to do that—in 37 different ways—but these just represent the tip of the proverbial iceberg. Use them to spark your own ideas, finding fun and unique ways to surprise and delight your customers.
37 magnetic customer retention strategies
1. Use personalized communications
Tailor your communications to your customers’ individual preferences and history. This could be as simple as addressing them by their name in emails or as complex as using AI to offer personalized product recommendations.
The more your communications feel tailored to their unique tastes and interests, the more likely your customers will feel understood and appreciated.
Examples:
- Emails from streaming services that display titles from your personal list
- “Frequently bought together” recommendations
2. Provide exceptional customer service
Prompt, empathetic, and effective customer service can turn even disappointed customers into loyal ones. Ensure your customer service team is well-trained and equipped to handle all kinds of customer queries. If a customer wants to return something that’s within the terms of your return policy, make the process quick, easy, and painless.
Examples:
- Finance software that offers free phone and chat support with live agents
- A travel brand offering a 100-day return policy on their luggage
3. Implement world-class loyalty programs
Reward your repeat customers with discounts, early access, exclusive products, or other perks. A simple points program can work wonders in encouraging repeat business—or consider a branded purchase that provides ongoing benefits, such as free refills with a branded travel mug. For businesses that want to go the extra mile, loyalty apps and digital gift cards are among the greatest marketing inventions of the digital age.
Examples:
- A awards app that offers birthday gifts, free items, and more
- Loyalty cards that earn free items after a certain number of purchases
4. Integrate customer feedback
Actively seek, listen to, and integrate your customers' feedback into your products, services, and experiences. Customers feel valued when their opinions lead to tangible improvements or decisions, making them feel genuinely appreciated. Feedback can include anything from feature suggestions to customer experience ratings to ideas for new products or service lines.
Examples:
- Ride share companies giving a real-time rating system for both drivers and riders
- Forums where customers can vote on feature requests
5. Have regular communication
Reach out to your customers regularly with useful information and updates, making them feel more connected and valued. This can be done via newsletters, social media updates, or personalized emails. That said, don’t just shout into the void. Think deeply about what you’re communicating, when, and how often, so your customers find it genuinely valuable.
Examples:
- A furniture company sending email newsletters with home décor ideas
- Regular company blog updates on relevant issues and new initiatives
6. Present uniquely personal offers
Tailor special offers, communications, and content to your customer's purchase history—or, better yet, to their entire history with the brand. This takes welcoming customers into your ecosystem to a whole new level, significantly increasing the likelihood of repeat purchases and word-of-mouth advertising.
Examples:
- Playlist recommendations based on users’ listening history
- Personalized deals based on browsing and purchasing history
7. Provide exceptional quality
Ensure your products and services are of exceptional quality—with a consistent brand experience. A customer is more likely to return if they trust that what they're purchasing is worth their money. More than a matter of function, this is just as much about form and design—not to mention durability under real-world conditions.
Examples:
- Computer technology companies that show commitment to design and functionality
- Watch brands with a reputation for impeccable craftsmanship
8. Have an exceptional return policy
Implementing a fair and straightforward return policy can make customers feel more comfortable making purchases.
A phenomenal return policy or experience will stand out at least as much as your products and services themselves, if not more so. The experience of returns is just as much a part of your brand as every other touchpoint.
Examples:
- Having a clear and generous return policy
- Sending kind emails to customers–even for returns
9. Customer education & self-serve support
Are your brand manuals available online? Do you offer video tutorials on changing out old parts? What about helping your customers learn new skills? Make sure your customers know how to get the most out of your products and services—the more reasons they have to come back again and again, the better.
Examples:
- An extensive library of educational videos and articles about your product or service
- In-depth, step-by-step tutorials showing how to overcome common customer challenges
10. Build community with existing customers and prospects
Build a community around your brand. This can foster a sense of belonging among customers and keep them engaged with your brand and each other. An active community can also be a centralized hub for events and activities that spread the word about your business.
Examples:
- Sharing activities, challenges, and celebrations on social media
- Community forums with opportunities to discuss obstacles and wins
11. Set up subscriptions and recurring services
Offer subscriptions or recurring services to encourage ongoing engagement with your brand. These can range from paid subscriptions to free ongoing content. Either way, recurring services offer continuous value to your customers and keep you top of mind.
Examples:
- A monthly delivery service that ensures customers never run out
- Streaming services, which provide continuous entertainment for a monthly fee
12. Recognize customer milestones
Celebrate significant milestones with your customers. This could include celebrating the anniversary of their first purchase, their birthday, or a significant national holiday.
Examples:
- Companies that celebrate user anniversaries with upgrades or other gifts
- Every online game in the history of online gaming
13. Gamify your customer experience
Add game-like elements to your product or service to make the experience more enjoyable and just plain fun for your customers. Earning digital rewards and being able to invite or challenge their friends can be a great incentive to keep customers engaged.
Examples:
- Language learning apps, in which lessons are structured like games
- Fitness app challenges and badges, motivating users to keep exercising
14. Provide multi-channel support
Offer customer support across the platforms that make the most sense for your customers—such as email, live chat, social media, SMS, in-app support, and more. This meets your customers where they are, letting them to reach you in a way they find comfortable and convenient.
Examples:
- A comprehensive support system, available through various channels
- Paying exceptional attention to detail in the language used when providing support
15. Offer exclusive benefits for loyal customers
Reward loyal customers with exclusive benefits. This not only makes them feel valued but also encourages them to come back to take advantage of their perks. Tiered reward systems also encourage customers to reach new, higher levels of loyalty for more advanced perks.
Examples:
- Airline and hotel tiered membership rewards programs
- Online retailers that provide exclusive deals and faster shipping for members
16. Incentivize your referral programs
Encourage your customers to bring in more customers by rewarding them for every successful referral. When you reward the newly invited customers as well, those customers hit the ground running, already feeling at least a little bit invested in your brand.
Examples:
- A file hosting referral program that offers extra storage space for both referrer and referee
- Ride share referral programs that offer ride credits for successful referrals
17. Provide regular updates to your products and services
Regularly updating your products or services does more than just help you stay ahead of the competition—it gives you something new to celebrate regularly with your customers. It also shows customers that you're continuously working to provide better value.
Examples:
- Digital updates to all kinds of software, from apps to operating systems
- Search engines constantly updating algorithms to ensure better results
18. Make renewals easy
Make it easy for your customers to renew their contracts or subscriptions. A seamless, hassle-free renewal process can significantly increase the likelihood of your customers staying with you.
Examples:
- Straightforward subscriptions and bundling options
- Easy, centralized subscription management if you offer multiple services
19. Regular feedback for customers
Establish a regular cadence of feedback for your customers about their product or service usage. This keeps your brand top of mind and reminds customers of the value they’re receiving from your products and services.
Examples:
- Regular emails offering insights into productivity and product usage
- Task management software providing insights into collaboration time versus individual work
20. Give exemplary post-purchase support
Make sure customers feel supported even after they've made their purchase. This can include follow-up communications, user guides, new feature demos, and access to a robust help center.
Examples:
- Healthcare portals that allow patients to follow up with their doctor after visits
- Detailed assembly instructions for products with online support
21. Be transparent
Be honest and upfront with customers about your products, pricing, and policies. This builds trust and can lead to long-term customer loyalty.
Examples:
- Utilities that are upfront about energy sources and offer green energy at premium pricing
- An outdoor recreational retailer using co-op structure and focusing on recycled and bio-based materials
22. Have customer appreciation days
Celebrate your customers with festive sales, themed product or service launches, or customer appreciation days with delightful surprises. Whatever road you choose, your customers will be happy to spread the hype.
Examples:
- Celebrating significant events and customer anniversaries
- A coffeehouse chain that offers limited-edition, holiday-themed drinks and cups
23. Reward social media engagement
Encourage customers to engage with your brand on social media. This can be through contests, shoutouts, polls, special offers for followers, or re-posting customer achievements.
Examples:
- A camera company creating a contest where customers can win prizes for sharing images taken on their cameras
- Eliciting feedback on social and showing how you listen to it to improve your products and services
24. Provide self-service options (for just about everything)
Allow customers to help themselves. A comprehensive FAQ section, a robust knowledge base, or an AI chatbot can empower customers to learn, explore, create, and find solutions on their own.
Examples:
- An extensive extensive knowledge base, helping customers find solutions quickly
- Letting customers track their orders in the app
25. Share your cause with your customers
Align your business with a cause that matters to your customers. When customers know they’re contributing to a positive change, they’re more likely to stick around as well as more likely to tell others.
Examples:
- A business showing commitment to environmental sustainability, donating a percentage of their profits to conservation efforts
- A shoe company that donates a pair of shoes to a person in need for every pair purchased
26. Offer beta releases
Beta programs that let customers test the latest and greatest features before they’re available to the public can be especially powerful. Creating avenues for customers to provide feedback will make them feel even more important and valued.
Examples:
- A creative design program that lets subscribers test pre-release versions of their software
- A software company that lets users test the latest operating systems before they launch
27. Be consistent
Ensure consistency across all your brand touchpoints. This includes the tone of your communication, your service quality, the look and feel of your products and stores, and even your social media presence.
Examples:
- A technology company with a consistently minimalist and clean design aesthetic across its products and stores
- A soft drink manufacturer with universally recognized branding and consistent taste worldwide
28. Proactive customer outreach
Reach out to customers before they run into problems. If some of your product or service features are harder to understand than others, offer automated walk-throughs the first time a customer tries them out, and make them available at any time through self-serve help portals. Also, if you know a service will be temporarily unavailable, inform your customers beforehand.
Examples:
- Software companies that launch info screens with new releases
- Cloud-based games alerting players about upcoming maintenance downtime
29. Surprise customers with the unexpected
Go a step beyond the ordinary and surprise your customers—maybe even for no reason at all. This could be a surprise gift, a personal note, a sudden upgrade, or simply new personalization options.
Examples:
- Surprise upgrade shipping to next-day delivery
- An online fashion retailer that sends chocolates or other small gifts with orders
30. Show gratitude
A simple thank you can go a long way. Make it a practice to show gratitude to your customers for their business. Even small gestures mean a lot.
Examples:
- Sending handwritten thank-you notes to customers
- E-commerce stores often include a thank-you message in their package slips
31. Invest in augmented or virtual reality
Augmented reality (AR) and virtual reality (VR) can provide immersive and engaging customer experiences. Use them to let customers try products virtually or enhance their interaction with your brand.
Examples:
- A furniture app that lets customers virtually place furniture in their home before purchasing
- An eyewear company enabling customers “try on” glasses virtually before buying
32. Be responsive
Respond to customer inquiries and feedback promptly, and make sure your customer service agents know how to help. This shows your customers that you value them and their time.
Examples:
- Some app developers use their actual coders to answer service questions
- Enabling users to sign up for calls with the product team
33. Showcase customer stories
Share stories of how customers use your product or how it's benefited them. This can create an emotional connection with other customers and provide social proof.
Examples:
- Share success stories showcasing how your product or service helped a customer
- Publish unique stories to inspire your customers
34. Showcase customers’ work
By showing the world what customers have created or achieved with your products or services, you’re highlighting your customers and your own capabilities at the same time.
Examples:
- A music instrument manufacturer sharing music composed on their instruments
- A technology company showcasing photos and videos shot on their devices
35. Prioritize speed and efficiency
In an on-demand world, speed and efficiency can be a game-changer. Show customers you value their time by providing prompt service and streamlined processes.
Examples:
- Digital bookstores and e-readers that deliver ebooks and audiobooks on demand
- Streaming services that let customers binge-watch TV series on demand
36. Optimize the online experience (especially payment)
Make sure your websites and apps are easy to use, fast, and intuitive. A seamless user experience can increase customer satisfaction and retention.
Examples:
- A tax software company guiding users step by step through their tax return
- Easy checkout features to make shopping extremely convenient for customers
37. Offer easy, flexible payment options
Most importantly, offer payment options that are easy and convenient for your customers. When you automate your financial operations with BILL, you can accept electronic payments at any scale by ACH, credit or debit card, or even international wire.
Examples: