Customer or client retention is about increasing the number of customers or clients that stay with you and the amount they spend. So, in marketing-speak, it’s increasing your repeat customers and increasing the profitability of each customer, for instance through a higher average order value.
Customer retention is important because it’s cost-effective. It’s cheaper to hold onto a current customer than to gain a new one.
So how do we go about improving customer retention? Solutions are plentiful, fortunately. And we’ve pulled together a bunch of strategies further below. But essentially, they all fall into one of three categories:
Loyalty cards, membership schemes, discount codes for referrals—these are all classic customer retention marketing strategies, and probably the most iconic. But this category also includes some more modern approaches, such as using influencers and brand ambassadors.
It may sound simple. But one of the best customer retention solutions is to consistently meet expectations, providing high-quality services or products and excellent customer service.
This category is like the bonus round in a pub quiz. These customer retention marketing strategies are about going the extra mile and doing something a little out of the ordinary. They might involve giving something for nothing, entertaining customers with the language you use, or building a community around your brand.
Delivering excellence is a sure-fire way to win over customers. But what does excellence look like? It differs from one business to the next. For ecommerce, it means a website or app that’s easy to use and reliable delivery and returns. And though it may sound counterintuitive, giving shoppers the option of using a guest account is also a winning tactic, since it removes a barrier from their journey.
Fashion brand Oasis does this well, with easy-to-use mobile and desktop sites and a guest account option. Information about postage, including costs and timeframes is available up front, as are payment options, and the process is streamlined, only asking for the information they need.
It’s one thing to provide an excellent product or service at the outset. The real challenge is repeating this time and again. But consistency is key for ensuring and improving customer loyalty. You also need to be consistent across all channels, from your website and social media profiles to your bricks and mortar shops.
Nike is leading the way in this respect, with an omnichannel experience that brings the digital and the physical together, using an in-store app which allows shoppers to skip queues and check product availability.
What does your company stand for? Today’s consumers are increasingly savvy. They make purchase decisions not just based on their wallet, but also based on a company’s ethics. So make your brand values as transparent as possible, and be sure they reflect every aspect of what you do.
For example, sustainable footwear brand Allbirds whose motto is “made from nature” doesn’t just make its trainers from environmentally friendly materials, it also uses recycled packaging and climate-neutral production methods.
Whether a coffee shop loyalty card, an online membership or a rewards scheme, these programmes are always a good bet. They make customers feel good—everyone loves a good freebie, right?
Another way of increasing customer retention is to team up with other providers. This is something Vodafone does well, offering its customers YouTube Premium and Spotify Premium within their mobile plans.
In today’s competitive business landscape, meeting customer expectations is the bare minimum. Where you can really make a difference is when you exceed expectations. Underpromise and overdeliver. This could be as simple as delivering early, giving customers surprise gifts or discounts off partner products.
How you respond to customer feedback has a big impact on your brand reputation, especially when in the public domain, and can significantly affect retention. Whether it’s positive or negative, you need to thank customers for taking the time to provide it. And when it comes to complaints and criticism, you need to show what you’re doing to make things better. For instance, if you’re a cleaning company and a customer tells you they’re unhappy with the service provided, explain what you’re doing to improve things. And why not give them a discount code?
Customer service has a significant role to play in customer retention. In fact, as much as 96% of customers will leave a company because of bad customer service. Make sure you’re consistently providing excellent customer service, across all channels, by regularly undertaking internal audits, and sending out customer satisfaction surveys.
And think about what else you could do. Can you incentivise staff to improve customer service, perhaps through commission linked to customer ratings? Or maybe you can introduce new ways of accessing customer support, such as live chat?
If you haven’t already, put a communications plan in place. It should map out how often you’re getting in touch with each customer segment, and what that contact looks like. Include regular, seasonal and promotional campaigns, as well as ones linked to how customers act, using behavioural segmentation.
For instance, a follow up email sent to customers that haven’t bought from you in a while might be all it takes to remind them about you and prompt a new purchase. And you can sweeten the deal with a discount code. Plus, by sending out a survey and asking the right questions, you can figure out if something’s gone wrong.
Other key touchpoints include post-sales follow ups and shopping basket abandonments, ideal times to send out customer satisfaction surveys.
Personalisation is a great way of putting purchase data to good use. A classic example is product recommendations tailored to a customer’s recent purchases. For instance, “you recently bought Scrabble, you might be interested in this Scrabble dictionary”.
Recommendation engines are another way of harnessing this data. Here, you use information about what other customers have bought with a particular product to recommend these as addons to new customers. Amazon does this particularly well.
Are you meeting (or ideally, exceeding) customer needs… and continuing to do so? Because they change over time.
Compare for example a first-home buyer from 2019 with one from 2021. No doubt their priorities have changed—they may well now be looking for a larger property with a home office and an outdoor space to call their own. Proximity to a tube or train station might no longer be top of the list, with many Britons working from home and moving out of the major cities. Rightmove’s “Where can I live?” tool is a commendable response to these changes.
So can you keep up to date with your customers’ changing needs and wants? Ask them. SurveyMonkey market research surveys are a great way to do that.
Community building is an excellent means of inspiring customer loyalty. Communities can come in many different shapes and forms—from a Slack channel to a Facebook group, or groups that meet in-person—it’s all about what makes the most sense for your customers.
The run and cycling tracking app Strava is leading the way here. They host a 75-million strong community of users who share their workouts and routes, motivating one another to get active.
Make the most of your loyal customers by encouraging them to become brand ambassadors. Many people will be flattered to be asked to represent your company. This approach can both increase the brand affinity of the ambassadors themselves and reach new customers, with customers more receptive to messages from their peers. Fitness clothing brand Gymshark runs an effective programme where its “athletes” act as influencers and brand ambassadors.
Gamification is the new kid on the block. It can be an excellent way of giving consumers a little something extra. Of course, it’s important that whatever you create is in line with your brand and what you do. For example, L’Occitane en Provence created a game to educate consumers about environmental issues, helping to reinforce its brand values of sustainability and environmental commitment.
Humans are curious creatures. We like learning new things. We also like a good bargain. Combine the two by educating your current and potential customers for free through how-to videos, blog posts and knowledge bases. House & Home magazine use how-to videos well, such as this living room styling video. They provide tips consumers can use themselves, while also establishing their brand as leaders in decorating, design and renovation.
You can also use explainer, tutorial or product demo videos or articles to help onboard customers. Natural “anti-odorant” brand nuud hits the nail on the head with their intro video for first-time users.
Creating content or crafting messaging that amuse or entertain customers is an excellent way of boosting brand affinity. Innocent drinks’ twitter account is a perfect example. It consistently posts entertaining, on-brand tweets with impressive engagement and a follower count of some 298,800.