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10 of the Most Effective Customer Retention Strategies

You’ve implemented tactics to grow your business and increase the sales of your products and services. But that is only one side of the coin. The other side is customer retention.

After you’ve come up with a new product and identified your target audience, you are all set to start the business. But it is equally important to invest in resources to retain your existing customers. That is why you need to have a dedicated customer success team whose main job is to convince customers to stay.

But retaining customers involves much more than just attending to your customers’ calls. The customer manager should focus on developing relationships with your customers. The relationships should nurture trust and promote communication. Also, it is more cost-effective to retain existing customers than to invest in gaining new customers.

According to McKinsey Research, 87% of consumers shop around instead of remaining loyal to one brand. This makes it crucial for companies to try to retain their customers. But with the need to satisfy other demands, your company might face challenges in developing effective retention strategies.

This guide will help you discover some of the most effective ways to retain your customers:

1. Provide Exceptional Customer Service

Who do you think loyal customers are? They are the happy and satisfied customers who have experienced excellent customer service. But it can be very difficult for your business to maintain the right balance between your business goals and customer services.

Start and end your customer service communications with a simple “thank you.” This is the easiest and simplest way to provide exceptional customer service. Saying “thank you” at the beginning of the interaction shows that you are thankful that customers have selected your business. And saying it at the end of conversation leaves a positive impression of your business.

Leveraging social media can also help you deliver effective customer service. Social media platforms allow you to connect with your customers on a personal level. Your customers from any part of the world, can like, share, and/or comment about your services or products on social media. If you are still not leveraging it, it is high time to use social media to enhance the experience you’re giving your customers.

For example, Starbucks leverages social media, and is known for their quick responses. They provide an exceptional customer service through different social platforms.

On their Twitter account, customers can ask about any ongoing contests or questions about stores. And Starbucks makes sure they reply to their customers quickly, and you can see in the screenshot below.

2. Make the Most of Social Proof

Social proof is powerful and impactful on customers. More than 90% of people have reported having been impacted by online reviews of a product. Customers trust product reviews more than the sales copy of the product or the product description. They trust the words of peers, family, or friends more than the company itself.

You can display user-generated content such as customer reviews, pictures or videos from various social media channels. You can aggregate this content and turn it into an organized compilation in the form of an Instagram wall and display it on digital screens in your store. This is a great tactic to give your customers something to rely on. And having genuine social proof is the best way to do the same.

So social proof can help you win over a new audience. But it also plays a role in customer retention. Because when you talk about them, or share their stories, your existing customers will feel appreciated. They may be willing to stick around because your company has taken the time to notice and appreciate them. There are many types of social proof which you can use for retaining customers.

Let’s take a look at some of the most powerful ones, and how to use them effectively:

Display User-Submitted Photos from Social Media on Product Pages

You can make customers feel special when they decide to share photos of your products on social media. Ask for their permission to share these photos on your product pages. This not only acts as social proof to win over new customers, but it also makes your existing customers feel acknowledged. This can go a long way in earning their loyalty.

For example, BlackMilk is a fashion and clothing website. For each of their products, they assign a specific hashtag

They encourage customers to use this hashtag to get featured on their product page. This is how the company leverages user-generated photos to gain customers trust and retain their existing customers.

Share Customer Stories Through Videos

By highlighting customers’ stories in videos, you can showcase the way your company communicates and collaborates with customers. Make sure you showcase the results you have achieved for your customers, and how you have helped solve their issues.

Customer story videos provide long-term social proof and can create a huge impact on prospects. They have an impact on customer retention as well. By telling your customers’ stories through videos, you give recognition to your existing customers. You’re showing them that their stories matter to you, which can result in their loyalty to your brand.

For example, Listen360 is a customer engagement platform. They regularly monitor, review posts, analyze text, capture feedback, etc. They have devoted a section for customer stories, in which their customers themselves share their success stories. In one video, one of their clients, marketing VP of Camp Bow Wow, shares her experience working with Listen360.

Share Social Media UGC on Your Brand’s Social Media

User-generated content (UGC) on social media is one of the most powerful ways to retain customers. It can also help you win over a new audience. It may seem like a small gesture to you, but sharing user-generated content of your products and services can significantly improve brand sentiment.

When you share the photos or videos customers create about your products and services, you show them that you appreciate their efforts. And this can go a long way to garner the loyalty of your existing customers.

For example, BMW asked their customers on Instagram to share their stories with the hashtag #BMWRepost. Then the brand re-posted the best of that customer-generated content on their official Instagram account. The key is to cultivate a social media following and use it in your brand’s interest.

3. Have a Proper Customer Relationship Marketing Strategy in Place

Ever thought about the communication a customer gets from your company after they sign up or make a purchase? They likely get some type of email communication from your brand. Possibly from a sales manager. But how often do they get to hear from your CEO?

You should develop and send newsletters from your company’s CEO. The newsletters could be sent once in a month or once a quarter. The focus of the newsletter should be on educating your customer about your products or services. You can also think of other interesting ways like training materials or how to use your products. Come up with some interesting ideas to build strong relationships with your customers.

The ability to retain customers depends on your company’s business practices, leadership, and cultural practices. You can also use customer relationship management tools that can help you focus on every single customer.

CRM tool will help you to manage one-on-one meetings and calls with your customers. The stored information for every customer will help your customer relationship manager to communicate with individual customers quickly and efficiently.

For example, Wells Fargo uses a CRM tool to enhance their customer service. The CRM tool allows the bank to connect with customers directly. And the bank is always available and approachable to their customers who need them. They have also found it easier to resolve the issues of customers by directing them to a relevant person or department.

4. Build a Good Email Marketing Strategy

Email marketing has always been an effective, easy, and cost-effective way of building relationships with customers. According to Campaign Monitor, for every $1 invested in email marketing, companies can generate $44 in returns.

Try to develop email content that is valuable to your customers. You could send emails to raise awareness about your upcoming product launch, or to ask them for qualitative feedback for improvements.

By automating email marketing campaigns, you can ensure that you engage with customers at the right times. Most companies have set up automated email marketing campaigns, triggered by certain customer behaviors and actions.

Email automation is personalized, very relevant to the customer, and sent at the best times. This compels customers to open the emails and engage with them. And as a result, there’s a good chance it can help generate more revenue for your company.

Salesmate provides an easy-to-use email automation feature. The tool can help you plan and schedule emails and design attractive email templates. Once you design a template, you can save it and later use it for delivering informative emails to your subscribers.

Kate Spade, a fashion brand, welcomes their new subscribers with an automated welcome email. The email is visually interesting and attractive, and it also contains a strong call-to-action. The email offers subscribers a 15% discount on their next purchase.

5. Create Educational Content About Your Product

The best time to send educational and informative content to your customers is right after they have signed up for your service or bought one of your products. Some quick education about your product will help your customers understand how they can properly use it and derive its true value.

The educational email or content can contain basic training on how to use your product or services. It could help them discover all the problems they can solve using the product.

For example, Outbrain, an online advertiser, sends their customers a series of training emails. The training emails explain how to start using the various advertising services available on their platform.

6. Apologize Quickly and Make Amends When Things Go Wrong

Humans tend to remember negative events more than the positive ones. It doesn’t matter if they have more positive experiences than negative experiences. Bad memories are long-lasting.

If a customer had a terrible experience, chances are that they will talk about it on social media. This impacts the retention of the customer who posted about their experience. And if other customers see it too, they may refrain from returning to your brand.

You should focus on giving a memorable and positive experience to your customers as much as possible. You should immediately apologize when something goes wrong. If you missed a product delivery date or if there are any miscommunication issues, you should fix them and apologize immediately.

For example, a guest at Delta hotel tweeted about his bad experience at the hotel. He also posted a picture of his hotel room. Delta was quick to respond, even though the customer did not tag the hotel.

Delta hotel provided the customer with a new room in one of their Marriott hotels. They also gave him a handwritten card. On the day after the incident, the customer immediately shared positive feedback on social media.

7. Ask for Feedback and Act on It

It’s important that you figure out why customers are leaving your company. Once you know the actual reasons, you can work on correcting them. But how can you find out the reasons? The solution is to ask your customers. You need to ask for feedback from your customer at regular intervals.

Using customer feedback tools, you can track and identify your customers’ happiness trends. For further specific issues, you should ask for qualitative feedback from customers. All of this information and data will help you to act on the issues quickly and effectively.

When you identify and address the issues as soon as possible, you can make an effort to fix them so you can stop customers from leaving your company. Listening to your customers and acting accordingly is the most powerful retention tool.

For example, Uber has a very simple feedback system. And Uber drivers also care about their ratings. If a customer gives them poor ratings, they run a risk of losing their job.

If a driver is getting poor ratings frequently, Uber penalizes the driver. Giving ratings on the app is very quick and easy, customers just have to tap from 0 to 5 stars. The customer can add specific comments as well if they want to complain or report something very specific.

7. Ask for Feedback and Act on It

8. Have a Customer Loyalty Program

Customer loyalty programs are one of the cleverest ways to nurture customer retention and loyalty. There are many simple customer retention tools like rewards, UGC content, loyalty bonuses and/or customer referrals. When used correctly, these simple tools can successfully create and nurture customer loyalty.

You can also reward customers who suggest your products or services to others. Identify, acknowledge, and appreciate these customers. The least you can do is say thanks when you see your customers recommending you on social platforms. Doing this reflects that you are paying attention, and customers feel they are important to your business.

Kuru, an online footwear brand, has a rewards program. The company allows customers to earn points in exchange for writing referrals and reviews.

9. Have A Dedicated Team to Manage Your Customers

Normally a primary customer success manager communicates with the customers. But what if the customer success manager leaves the company or is transferred to another section of the company? It will take time for your customers to develop a relationship with the new manager.

If your customer’s relationship with your company is based on that one person, then there is a risk involved. You could risk losing a customer as they may fail to make an immediate connection with the new point of contact. For situations like this, you should ensure that the customer is communicating with multiple managers.

Building a relationship with a team of customer success managers will address this kind of issue. It is important from the customer’s point of view. If one manager leaves, they won’t have to go through the entire process of relationship building with a new one. Customers should also have access to the contact details of the entire team dealing with that particular project.

For example, Whole Foods, a supermarket food chain, have a fantastic customer support team on their social media. On their Twitter account, the company’s customers post complaints or issues. And the company ensures that they resolve them as soon as possible.

The team looks for the product in individual stores in cases when the customer had an unpleasant experience with it or couldn’t find it. They have 4 million followers on Twitter alone. And the team focuses on providing their customers with a more personalized experience.

10. Make Online Navigation Easy for Customers

You should enhance your product search experiences to help retain your customers. Customers who know exactly what they want to purchase from your website will directly search for it in the search bar. But there will be customers who are using your website for the first time or who are just browsing. For customers like this, navigation should be easy and convenient.

These customers want a sorting option while browsing through the website. Your company should help customers to personalize their searches. As a company, you need to make sure you display the right categories in your navigation bar. Also, carefully categorize your products into different groups. But remember, don’t create too many product groups.

For example, as you can see in the image below, how carefully Amazon has categorized its products into different groups.

Final Thoughts

Customer retention is one of the crucial pillars to running a successful business. For any business, it is important to gain customers, but it is equally important to retain customers. Your business needs to have a strong set of strategies to successfully retain customers.

Leveraging social media for customer service is one of the most effective ways of retaining customers. Through social media, you can directly be in contact with your customers. Also, it is important that you have an easy and smooth navigation-friendly website for a better personal experience. And you should have a CRM tool for your business so that you can quickly investigate and resolve customer issues on a personal level.

Try these strategies, and let us know how well they work for you. Do you know any other effective ways to retain customers? If so, please share them with us in the comment section.


Digital Marketing Manager

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