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Improve customer retention with these simple strategies

Attractive young cute woman hugs plush teddy bear with shopping bags at clothing store front. Pretty girl shopper happy with her purchases and prize in shop sale competition.

There’s a long-standing debate about whether retention or acquisition is more important. Whatever side of the fence you fall on, you can’t deny that each one has its place.

You can acquire all the customers in the world but if you don’t have strong retention then you’ll eventually burn through your total addressable market. Likewise, you can have amazing retention but if you can’t acquire new customers then the business won’t grow.

Even though they’re both necessary, you should get your retention right before you go full force on customer acquisition. In this short guide, you’ll learn simple customer retention strategies that’ll help you take your brand to the next level.

What is customer retention – really?

First, let’s make sure we’re all on the same page. For the purposes of this guide, customer retention is the ability of a company to retain customers over a specified timeframe. It’s usually expressed as a percentage.

For example, you’d say our yearly customer retention is 90% (that’s great BTW). That statement means you’re able to keep 90% of all new customers for at least a year. Of course, that percentage will go down as the timeframe increases.

It may be 50% after two years and 25% after three years.

Businesses tend to spend the most time on the first-year retention. While this may be the most important when it comes to recouping your acquisition costs, it’s not the most important when it comes to profitability.

The longer a customer stays with your business, the more profitable your brand becomes. The chances of long-time customers referring their friends, family, and professional colleagues is higher.

According to Gartner Group, 80% of a company’s future profits come from 20% of existing customers. Can you see why it makes sense to prioritize customer retention in your business?

Let’s look at a few ways to do that.

Thoughtful onboarding

The first, and possibly most important part of customer retention is getting your onboarding right. When someone uses a product for the first time, they have a lot of questions.

What goes where, how do you do this or that, and what are the limitations? The more complicated your product, the more questions they’ll have.

It’s your job to understand the bottlenecks your product has and be proactive in addressing them. Oftentimes, the hardest part is identifying those challenging aspects in the first place because you know how it’s supposed to work.

There are a number of ways to get this information:

  • Visitor recordings
  • Analytics tools (where are people dropping off?)
  • User testing platforms
  • One-on-one customer interviews

Once you have a clear understanding of where people are struggling, you have two options:

  • Redesign parts of the product to reduce friction
  • Provide helpful guides or tooltips at major problem points

If you choose to create helpful guides, they don’t have to remain within your product. You can also create automated email sequences that send out helpful information at specific intervals.

Whatever route you choose, continue to monitor and tweak your product as time goes on. As customer attitudes shift and your product change, you’ll need to make sure it’s still meeting the needs of the end-user.

There’s no such thing as a perfect product but that doesn’t mean you can’t get better over time.

NPS (Net Promoter Score) survey

The net promoter score survey is a simple tool that seeks to measure brand loyalty. It asks two questions. The first question is “On a scale of 1 – 10, how likely are you to recommend our product/company to a friend or colleague?”

The answer to that question prompts the next question. If someone rates you six or lower then they’re considered a detractor and are unhappy with your service. They’ll be asked how you can do better.

While the first part of the question is important, the follow-up question is more insightful. The answers will yield a wealth of information about where you’re dropping the ball.

Of course, you’ll already be aware of some of the things they mention or can’t do anything about it. For example, if they’re upset about shipping times but you use the fastest service available, there’s not much you can do about it.

When they complain about the quality of the product or missing features then you can make changes. Communicate with your team openly about the results of the NPS survey so they know where you’re falling short. To reverse any trend will be a group effort.

A common mistake brands make is only sending out NPS surveys after a certain timeframe and never sending them again. As mentioned in the last section, things change so you should be sending out NPS surveys regularly.

After they become a new customer, send one after 30 days. After that, send one every quarter. That will allow you to track your NPS over time and see if it’s improving, declining, or remaining steady in response to the changes you’ve made. Create a simple graph or chart that measures specific milestones and makes it easier for you to gauge progress.

Rapid customer support

It’s been estimated that $1.6 trillion is lost every year in the U.S. due to poor customer service.

Think about that for a moment.

That’s more than the gross domestic product of Sweden, UAE, and Switzerland combined. If brands would take the time to prioritize customer support then there would be $1.6 trillion more floating around the economy.

Gladly found that a brand can lose up to 84% of its customers after just 3 poor experiences.

Expectations of customer service have changed a lot over the last few years. People expect faster service via every channel – with the expectation of an email response within four hours.

They also believe conversations that take place on one channel shouldn’t have to be repeated on another channel. For example, if they have an email conversation with a support rep and switch over to the phone, they expect the rep on the phone to have all of their history.

Some consumer expectations simply cannot be met by any but the largest organizations but that doesn’t mean you shouldn’t try to improve.

First, stop treating it like a cost center. It can turn into your biggest profit center if done properly – just look at Zappos as an example. Better support improves retention and retention improves profit.

Constantly train support staff about your products, your expectations, and the best practices around customer support.

The next thing you can do is use a social media management tool, combined with your CRM or support tool to create an omnichannel experience. That way, reps will have the information they need to tackle support issues no matter what channel the customer uses to communicate.

The third step is to add live chat. The knee-jerk reaction to live chat is that you’ll need to increase the number of support reps considerably. This may not be the case because, unlike phone support, one agent can serve multiple customers at once.

Taken together, these measures will help you reduce support time and improve its quality.


Customer retention, at its core, is about having a great product and providing an exceptional experience. You don’t need a bunch of fancy bells and whistles to make it work.

It does require that you focus the necessary resources to make it a reality. If not, you’ll see little to no gains and the related benefits.

Start with the onboarding, work your way around to support, and use the NPS score as a proxy for how you’re doing on both fronts.

Published: June 26, 2020

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Christina Elroy

Christina Elroy is a proud wife, mother, entrepreneur, author, and world traveler. Previously a successful businesswoman who gave it all up to raise children, Christina spent a lot of her free time during those years flipping through books and learning about a plethora of topics. She hopes her books will inspire and motivate others to do what makes them happy and to achieve their goals.

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