7 Customer Retention Strategies and Examples To Drive Customer Loyalty

7 Customer Retention Strategies and Examples To Drive Customer Loyalty

At its core, customer retention is about keeping your customers happy. If you do this well, they will stick around and buy from you again and again. But that sounds easier said than done. There are so many things that can make a customer dissatisfied, and some of them may not even be under your control.

This is where customer retention strategies come in. By having specific strategies in place to keep your customers content, you can dramatically increase the chances that they will stick around - and turn into loyal customers later on.

Below, we've listed some of the best customer retention strategies that you can start using right away, both for your online business and brick-and-mortar store. Read on and find out how to drive customer loyalty and keep your customers coming back for more.

Monitor Your Business Metrics

Before you begin working on driving customer loyalty, you need to know how your business performs compared to other companies in your industry. This means using various metrics and KPIs to track your progress.

For instance, your online store most probably comes with a default e-commerce monitoring solution - which on its own can provide some valuable insights into your business, such as:

  • The ratio between new and returning customers,
  • The average order value for each customer type,
  • The average time it takes for a customer to purchase from your store,
  • The bounce rate and other website performance metrics.

The metrics you focus on the most should be defined by your business goals. If you're working on driving customer loyalty, for example, you might want to focus on the average order value and returning customers percentage.


Focus on the Customer Journey

To keep your customers happy, you need to focus on their journey - that is, every step they take, from gaining awareness of your business to becoming loyal customers.

This requires understanding what works and what doesn't work at each stage of that journey. Are most customers dropping off at the awareness stage? Then you need to focus on getting more visitors to your site in the first place. Are they dropping off after adding items to their cart? Maybe the checkout process is not as smooth as it could be.

You'll have to experiment and try different things to see what works best for your business and then adjust if needed. You won't necessarily have to rework your whole customer retention strategy; sometimes, minor tweaks can make a big difference.

Payment Methods

Your customers don't want to waste time. They need payment methods that they can use easily and quickly. The more payment methods you can offer, the better - including things like PayPal or Apple Pay that are becoming increasingly popular even among small businesses.

At the same time, you want your customers to feel safe about their data and transactions. So, instead of creating your own payment gateway, you might want to consider using a trusted provider like Stripe.


Shipping and Returns Policies

In eCommerce, the customer experience doesn't end when your clients make a purchase. You also need to think about how you will get the product to them and what will happen if they need to return it.

Offering free shipping is a great way to sweeten the deal and encourage customers to buy from you again in the future - it is safe to say that free shipping is the new standard in eCommerce. So, do your research and see what shipping options will be the most convenient for your customers.

Embracing Self-Service

While it may sound obvious when talking about online stores, customers rarely want to be nurtured by a salesperson - they want to be able to do things on their own. So, forget about having a live chat window pop up as soon as someone visits your site. A pop-up or two may prove useful further down the line but going over the top with them will only annoy your visitors.

Instead, focus on creating a great self-service experience for your customers. This includes things like an FAQ page, a well-designed help center, and other informative content like blog posts.

Offer Incentives and Discounts

One of the most effective customer retention strategies is to offer incentives and discounts. This could be in the form of loyalty programs, where customers earn points for every purchase they make, which then can then be exchanged for discounts or freebies.

Consumer psychology dictates that people are more likely to come back and buy from a business if they feel like they're getting something in return. The products you sell are actually only a part of the equation, and the right prices and discounts can tip the scales in your favor - even among customers that don't seem particularly price-sensitive.


Re-Engage Your Customers

Building customer loyalty greatly relies on re-engaging your customers. Even if you provide the best value for your target audience, it doesn't necessarily mean that they will come back every time - for some, it may be a matter of convenience, while others may simply forget.

This is why you need to actively remind your customers that you exist and that they should come back and buy from you again. You can do this by sending them emails, push notifications, or text messages (SMS). If you don't want to store customer data, you can also give out business cards or promotional flyers with your store's information.

A good portion of that will land in the spam - but this isn't to generate as many new customers as possible. Conversely, it is to re-engage customers that have already bought from you before and are likely to do so again.

Email Marketing

Although it may seem that the common folk have abandoned email in favor of messenger apps, the truth is that email marketing is still one of the most effective ways to reach your target audience. After all, it is a direct form of communication where you can send personalized messages to your customers without worrying about them getting lost in a sea of other messages.

There's nothing stopping you from using email to reach out to your customers and remind them of your existence. Whenever you run a new campaign, start a sale, or launch a new product - make sure to let your customers know via email. You can even automate the process using email marketing software like MailChimp, Constant Contact, or AWeber.


Social Media Marketing

It is now common for businesses of any size to have social media accounts. This is because social media platforms provide businesses with a direct channel to communicate with their target audience.

You can use social media to post updates about your business, run ads, or even interact with the community built around your brand. For example, you can answer customer questions on Twitter, post pictures of new products on Instagram, or run a contest on Facebook.

Indeed, it will require some extra work on your part, but it will also allow you to show your more human side – which, in turn, will help you build a stronger connection with your target audience.


Get Reviews and Testimonials

Customer reviews are one of the most powerful customer retention strategies because they provide social proof. In other words, they show your potential customers that other people have tried your products and liked them, which renders your business more trustworthy in their eyes.

There are a few ways to get reviews and testimonials from your customers. The most common one is to simply ask them for one after they've made a purchase; you can do this via email, on social media, or even in person if you have a brick-and-mortar store.

Another way to get reviews is by offering incentives - that is, giving out discounts or freebies in exchange for customer feedback. This doesn't have to be in the form of a formal review; even a quick comment on social media can do wonders for your business.

Personalize Your Offer

If there is any way to personalize your offer, do it. People love feeling like they're special and that businesses care about them as individuals, not just faceless customers that exist to generate revenue.

Customer Segmentation

One way to personalize your offer is by using customer segmentation. This means dividing your customers into groups based on shared characteristics, such as age, location, gender, interests, and so on. Once you know who your customer segments are, you can create offers that are specifically tailored to them - making them more likely to buy from you again.

To a certain degree, customer segmentation has become a standard practice in many industries, with all kinds of companies going as far as to create personalized landing pages for each segment. The personas you create for each segment can help you better understand your customers and how to appeal to them.


For example, imagine that you are targeting two segments of women - busy moms who are health conscious and college students who are on a budget.

To appeal to busy moms, you might highlight the health benefits of your product and how it can save time. For college students, on the other hand, you could emphasize its low price or show them how using your product can help them save money.

Data-Driven Personalization

Another way to personalize your offer is by using data collected from past interactions with customers. This could be data from your e-commerce store, such as what products they've bought in the past, or data gathered from loyalty programs.

On top of that, cookies and other tracking technologies can be used to gather data about customers from the websites they visit. Just as Google uses them to adjust the ads you see on the internet; businesses can use this data to personalize their offers.

This can be used for anything, from tracking the products your customers browse on your website to determining which emails they open and click on. Once you have this data, you can use it to show them more targeted offers in the future – increasing your chances of hitting your target.

Offline Personalization

Personalizing your offer accurately may be a little more difficult to do in brick-and-mortar stores, but it is far from impossible. You can, for example, use a customer loyalty program tied to customers' email addresses to keep track of what products they buy and offer them discounts on similar items.

You surely don't want to remodel your store for each individual customer, but you can put certain items on display that are more likely to appeal to their segment. It may sound like a lot of work for just one sale, but if you do it right, the customer will keep coming back.

Keep an Open Line of Communication

Finally, one of the most important customer retention strategies is to keep an open line of communication with your customers at all times. This means being available to answer their questions and address their concerns, whether that's via phone, email, live chat, or social media.


It's also important to proactively reach out to your customers from time to time - not just when they have a problem but also when everything is going well. Sending them a message saying "Thank you" or "we appreciate your business" goes a long way in building customer loyalty.

On top of that, you should aim to resolve any issues that your customers point to in your social media channels or store reviews. It will show that you're paying attention and care about your customers' experience.

In Conclusion

Customer loyalty is the driver of sustainable business growth. If you can keep your customers coming back to buy from you, they will provide consistent revenue streams that allow you to invest in new products and scale up over time, without having to worry about acquiring new customers all the time.

To achieve this, you need to have a solid customer retention strategy in place - one that addresses all the common pain points that make customers leave. The strategies we've listed above are a great starting point, so remember to implement them in your business and see how they work for you. Good luck!

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