What Is Customer Retention – A Complete Guide

By Ankit thakor – Your business is not just about finding new customers – it is also about luring your previous customers to come back for more. Customer retention allows you to boost your revenue while increasing your customers’ lifetime value in your business. Not only does it allow you to offer valuable products in exchange for your customers’ money, but it also helps you to maintain a healthy, happy relationship with them. But what exactly does it imply?

Customer retention refers to the process of retaining or engaging existing and previous customers to come back to your website to buy your products or services. It is not the same as lead generation or customer acquisition, as, in the case of customer retention, you have already converted them at least once. And according to surveys, you are at least 60% more likely to sell your products to your existing customers than converting a new visitor to a buyer. Thus, it is implied that companies should focus more on customer retention than on customer acquisition to keep churning revenue.

Customer retention allows you to have healthy and lasting relationships with your customer to the point that they become loyal to your brand. It makes them refer you to their friends and family, ensuring you keep getting customers from word of mouth.

Thus, you can easily understand how necessary customer retention is to ensure your business survives and thrives and keeps giving you returns.

So to start your company’s journey in the effective retention of your existing or previous customers, you first need to calculate your current customer retention rate. Only 42% of companies can accurately measure their customer retention rate. However, we believe it can be easily implemented with the right formula. Given below is the formula you require to measure your company’s existing customer retention rate effectively.

Read: Customer Retention Strategies You Need to Adopt

Custom Retention Rate Formula

The customer retention formula is simple yet powerful.
The formula is –

Number of customers at the end of the period – Number of customers acquired during period / Number of customers at the start of period * 100

This retention rate calculation will help you understand the rate of how many existing customers came back for purchasing products at your website. If the rate is too low, do not get discouraged. Calculating the retention rate will help you to construct a starting ground for your customer retention strategies. You will be able to understand precisely where you stand and where you want to reach.

You should come up with reliable customer retention strategies to ensure that your existing customers keep coming back. While this involves much research, hard work, and patience, we promise the results are worth it.

Given below is a list of the 10 best customer retention strategies that will help you increase your customer retention rate, allowing your business to develop and grow with a loyal customer base.

10 Strategies and Techniques To Increase Customer Retention

After understanding the importance of customer retention, the next step is to plan strategies. Here are some of the best methods to guarantee an increase in your business’s customer retention rates :

Read: How to Handle the Chaos of Unanswered Calls and Avoid Client Dissatisfaction

1. Setting Sales Goals

Before you even start thinking about adopting strategies to retain your customers, you need to set a goal for your business. This will help you understand where you want to reach and thus make your work accordingly. However, we suggest selecting a feasible and attainable goal . Far-fetched goals might make it seem impossible and discourage your journey.

2. Mapping Customer Journey

Customer retention relies greatly on mapping your customer’s journey – from walking into your website to purchasing a product. This is because this entire journey is not a smooth straight line – it can take many unexpected curves, and you would need to know all the details of this journey.

You can start with questions like –

1. How do people come to know about your business?

2. Do they keep track of your articles with Google search?

3. Do they follow you on social media for product launches and updates?

4. Do they refer you to friends?

These details will help you understand what makes your customers come back for more, work on these aspects, market your products efficiently, and ensure that your customer’s journey is smooth and easy.

3. Starting On The Right Foot

First impressions are everything when it comes to online business. The customer who walks onto your website should be greeted warmly with a colorful, attractive webpage, a seamless search experience, and easy check-out. You should also send them thank-you emails, offer special discounts, and provide helpful videos and guides so that your customer has a fantastic impression of your website and keeps coming back for more.

According to research, American Express found that almost 33% of customers will switch companies with just one bad customer service or web page experience. Thus, you need to ensure that your customer service is top-notch every time to make your customers keep coming back for more.

4. Looking At Value Proposition

Value proposition refers to conveying your product purpose, beliefs, and reason for being in the business to your clients. This will add to your perceived value, compel your customers to think of your website or products as the ultimate solution to their problems. You can engage in green practices, support local businesses by including their products and use similar strategies to add to your perceived value.

5. Reducing Friction

This relates to removing glitches and obstructions on your website. If you have noticed, big conglomerates like Amazon provide a seamless product search and payment experience. You should also include seamless exploring and payment experiences to your customer to ensure they come back for more. You can also provide links to related products while they check out to help them explore your website and your products without facing any obstacles.

6. Good Communication and Engagement With Customers

If you do not communicate or engage with your customers after they have got their product, your customers will forget about you after some time. Engaging and communicating with them with the help of web push notifications regarding new product launch details, updated information, unique offers, or discounts will ensure that your clients remember you and refer to your website when they decide to buy again.

According to research, it has been found that almost 39% of customers are more likely to come back because such web push notifications make them re-visit and buy from websites.

7. Educating Customers With Interesting Content

Keeping interesting blogs filled with educational content will increase your customer retention. This is because customers will like to know more about the uses and advantages of the product that you offer. This will also encourage them to recommend you to their friends, thus earning you new customers.

Read: 7 Requirements to make your blog successful

According to research, content marketing has a 32% effectiveness on customers and lures them to revisit websites.

8. Understanding Customer’ Problems

Understanding your customers’ problems is the key to retaining them for a long time. This is because even if your product promises world-class service and benefits, it might not be able to solve the problems your customers face. Thus, you need to understand their issues and the kind of solutions they seek and deliver accordingly. It will also help to know the type of customers your product will benefit from to help your marketing campaigns.

9. Rewarding Returning Customers With Loyalty Program

Loyalty programs might seem like a simple gesture, but they have excellent results. When your customers get to know that they become a part of loyalty programs with special offers and discounts on returning to your website, they will feel special and will be compelled to come back and shop.

According to research, at least 56% of customers who are part of loyalty programs of a website purchase at least once from them.

10. Asking For Feedback

We cannot emphasize enough the importance of feedback. Asking for feedback has two primary purposes –

1. Allowing your customer to feel important as it shows that you value their opinions.

2. Allowing you to get a clear idea of what your customers feel, think, and want.

In this regard, it is better to ask your customers to fill out short forms with in-depth answers to help them give you a clear idea. This is because surveys with the same old rating system might prove to be boring and will not get you the honest opinion you seek.


Customer retention is a long-drawn process that requires a lot of research, commitment, and hard work on the company’s end. One needs solid strategies to ensure that they can attract their existing and new clients into buying their products and services. Continuously refining your customer retention approach will allow you to come back with newer, better, and more lucrative products to ensure your customers keep coming back for more.

We hope this article provides you with all the necessary details regarding customer retention to improve and adjust your company according to your customer’s demands and requirements.

So these were some of the most practical and time-tested tips to retain your customer over the long run. Do try them out, all the best!


Ankit thakor is a marketer by trade and a football player by passion. He is a Saas Marketing Specialist at SoftwareWorld. He specializes in using compelling content to capture consumer dollars for world-class SaaS brands, including Zoho, Freshworks, ClickUp, and more.

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This Post Has One Comment

  1. samwq

    Great post!

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