What is Customer Retention: Strategies and Examples

22 Jun- 7 min read

What is Customer Retention: Strategies and Examples 1

A client is more likely to return to and recommend a familiar brand, right? This is easy to explain: the human brain is designed so that to solve a problem, it prefers a regular option rather than searching for a new one. That is why client retention should stay in your business focus.

What is customer retention?

What is customer retention? Customer retention is the ability of a company to retain existing customers. Customer retention rate is measured as the percentage of a company’s customers at the end of the reporting period compared to the number at the beginning of the reporting period.

Why is customer retention important?

Customer loyalty is a significant competitive advantage. And the customer retention rate from your retention strategies plays an essential role for a brand in forming that loyalty for several reasons. Let’s look at some of them.

·  Increases loyalty

Existing customers believe in the brand, so they spend more time and funds. The use of loyalty programs helps to increase customer retention and increase profits in the end. Loyal customers are the best brand advocates. They are happy to share their positive experience of interaction with the company. Loyal customers are always ready to argue their choice and tell new potential buyers about the brand.

·  Saves budget

Implementing a customer retention strategy & effective customer retention management may cost you 5 times less than acquiring new customers. This helps companies cut their marketing costs.

· Builds stronger bonds

Your customer retention ideas help build strong relationships with clients. Customers feel like valued customers when a brand rewards their loyalty. To make the customer feel like a part of the brand, marketers provide various rewards or discount coupons, for example, for a birthday. This develops an emotional connection and strengthens relationships, so in case of any misunderstanding, buyers will show patience and understanding.

· Boosts sales

Your customer retention strategy in a complex approach to customer success pursuits the same good foal – to boost sales for the company. And it’s quite a tangible goal since your customer satisfaction directly affects your company’s income. So, keep going.

· Improves customer service

Existing customers are more likely to participate in surveys and provide useful information to the company. Based on this data, the brand creates effective marketing campaigns and uses an individual approach. With the help of data collected through your website forms or surveys, companies improve their product and service, which increases sales in the end.

· Helps improve marketing customer retention strategies

The effectiveness of marketing strategies, monitoring customer satisfaction and retention and analyzing the outcome allows companies to determine the effectiveness of marketing strategies and stay data-driven.

· Enables to attract new customers

Your brand’s most loyal audience spreads the information about your company through the grapevine and keeps hype, so it’s more likely that new customers will come to see what’s what like a moth to a flame.

Key customer retention metrics

How do you measure your customer retention rate? What is a good customer retention rate? How to calculate customer retention rate (CRR)?

Some metrics are needed to track repeat sales, loyalty program performance, and purchase frequency, a metric that directly demonstrates retention performance is customer retention. It is necessary to consider it in order to understand how effectively your tools work. The higher the score, the better your customer retention plan works.

Customer retention formula

To calculate CRR, you need to subtract the number of new customers for the period from the customers’ number at the end of the period, and then divide this difference by the number of customers at the start of the period. If you need to use a customer retention rate formula to measure your marketing success, you’d rather stick to this one:

What is Customer Retention: Strategies and Examples 2
Source: Amplitude

For a more detailed analysis, you may also apply various customer retention techniques and calculate success as per the following formulas:

Customer churn rate formula

(Lost Customers ÷ Total Customers at the Start of Time Period) x 100.

What is Customer Retention: Strategies and Examples 3

Source: Smile.io

Customer lifetime value

It’s an essential metric as it probably costs less to keep the existing customers than to acquire new ones, so increasing the value of your existing customers is a great way to drive business growth. Thus, customer lifetime value is the total worth to a business of a customer over the whole period of their relationship.  (Qualtrics) How to measure customer retention here?

LTV helps to evaluate the effectiveness of acquisition channels and the level of customer loyalty. Based on LTV, you can improve the profitability of your business, personalize your marketing strategy for customers with different LTV values, and improve customer retention.

What is Customer Retention: Strategies and Examples 4

Strategies to improve customer retention

Customer acquisition and retention form effective relationships. It is easier to communicate with regular customers, especially during some emergency cases. Companies can quickly match purchase dates and send messages to affected customers instead of sending standard emails that the buyer is more likely to ignore, etc. you improve your customer retention process when apply high standard strategies. Here are some customer retention tips:

  • Onboard smoothly

Retain customers with a smooth onboarding process. First impressions are everything.

  • Ask for feedback

One of the biggest keys to retaining customers is to know how they feel. so, do your best to close the loop on customer feedback. So, feel free to revise your customer base and ask for feedback from them via forms or surveys, etc.

  • Stay up to date

Keep your products and services top of mind. Do not forget to inform your audience on that, reward promoters and loyal customers, and provide the same benefits to your consumers to boost their customer value.

It may help to boost some metrics and improve customer retention which will be a way for your business to stay ahead. Apply user session recording tools that improve your website ux and customer experience in no time.

Customer retention examples

For example, if your business had 250 customers at the beginning of the month and lost 10 customers by the end, you would divide 10 by 250. The answer is 0.04.


For example, if a brand needs a stock of customer photos when launching a new product, existing customers can help. They are best suited to promote the company’s products and services because they are already familiar with them.

Current customers bring companies 65% of profits;

The probability of selling to a current client is 60-70%, and to a new client only 5-20%;

Retaining current customers is 5 times cheaper than attracting new ones;

Loyal customers spend 67% more than new ones.

Source: Smallbiztrends

Improve your customer retention strategy with better customer experiences

Thus, you may constantly improve your customer retention with our help, using effective strategies and tools and make it a success in at least four ways:

  • Retain your customers with a smooth onboarding process.

Always keep in mind that the very first impressions are everything. They will draw an image that will be hard to destroy over time, and your customers will stick to it.

  • Close the loop on customer feedback.

One of the biggest keys to retaining customers is to get back to them and know how they feel about the cooperation and so much more.

  • Keep your products and services top of mind.

Keeping abreast of what’s going on on the market, improving the quality of the product and seeking innovations will do in no time.

  • Reward promoters and loyal customers.

Don’t forget about the people who help you stay alive. Appreciate their loyalty to both your most loyal customers and promoters. Grow them into your product adepts and company advocates.


Why is customer retention necessary? It contributes to the growth of the company. Customer retention provides expansion opportunities. If you have already established your customer retention system, don’t be afraid to try new things and see how effective your retention tools are. The market is changing, and so are the needs of customers: those tools that your customers were delighted with yesterday may not work very well today. Study customer retention definition and practice with formulas to succeed. Use high-standard customer retention methods that can come in handy and apply CRO tools to improve your customer experience.

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