How To Automate and Improve Upon Your Customer Retention Strategies?

Updated on: Mar 3, 2022

Many companies make the mistake of only focussing on new clients instead of also putting in efforts of retaining existing ones. In this article, we will explore some of the best customer retention strategies that you can apply to your business. 

With so many brands in every industry – it is quite a challenge to acquire new customers. What is better than getting new customers onboard? Retaining the existing ones, definitely!

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So, what is customer retention?

Customer retention refers to the process by which a company retains its clients over a specific period of time. A high rate of customer retention is something that most companies aspire to have. It is important to build a loyal customer base for the long term. 

It involves companies to prevent the customers from switching to other brands by using various retention strategies. Let’s have a look at why customer retention is so important. 

Why is customer retention important?

Listed below are various reasons as to why customer retention is important for any company today –

  • Reduced marketing costs

Since your existing clients are already familiar with your product or service, you do not need to make them aware of your product every time. They are at the retention stage of the user journey. It costs 4X more to get hold of a new customer every time than retaining the existing one. 

  • Higher ROI

Since there is more investment involved in getting new customers, the returns on investment (ROI) are higher when one focuses on customer retention. A balance needs to be there between acquiring new customers and retaining existing ones. 

  • Increase in conversions

Customers who make repeated purchases are more likely to spend more than their last purchase, resulting in a higher customer lifetime value. They are twice as likely to try new product launches or services if they were satisfied with their previous purchase since they trust your brand. 

  • Word of mouth sales

If your client is satisfied with the product and services provided, then they are more likely to spread the word in their immediate social circles. This works great for marketers. More and more customers today trust word-of-mouth recommendations as they serve as reviews.

  • Constructive feedback

Constructive feedback only helps you bridge the gap between customer needs and what your product has to offer. According to a survey, more than 90% of customers said they felt more appreciated when their feedback was taken into consideration and also implemented. Over 50% of customers said they would not continue with a brand that does not take their feedback seriously. 

  • Sell at premium prices

A loyal customer genuinely believes that the product is better than the others in the market. Your previous customers will be ready to pay premium prices as they feel valued and also satisfied with customer service. 

Customer Retention Rate 

Customer retention rate is the percentage of customers who continue remaining active clients after a certain period of time. It makes you better understand why the customers choose to remain loyal to you. It also helps in improving your retention strategies and customer services. 

A 100% retention rate is the best, and a retention rate lower than 15% is bad. In the end, it really depends from industry to industry. 

You can calculate the customer retention rate by gathering the total number of customers during a certain time period, subtracting the new customers gained within that time period, and then dividing the result by the number of customers at the beginning of the time period, multiplied by 100.

Customer Retention Strategies - Rate Formula

(Source: Uscreen)

Bonus: Along with retaining your old customers, you must also think about optimizing your conversion rates to build a larger customer base. If you want to learn some extremely simple yet highly impactful strategies, enroll in this Online CRO Course

Customer Retention Strategies of 2022

Listed below are some of the most effective customer retention strategies in digital marketing –

1. Email campaigns 

You can consider offering discounts and promotions through your email campaigns. They make your customers feel valued. The trick to doing this the right way is to make the customer feel as if it is an exclusive offer, only for them.

At the same time, you don’t need to spend time personalizing this for each customer. Email marketing automation is the right technique. Platforms like MailChimp are good email marketing automation tools. If you’d like to learn this tool and more about email marketing in general, IIDE’s Online Email Marketing Course should be on your list. 

2. SMS campaigns

SMS campaigns have an open rate of over 90% as many people are open to subscribing to them. You can use SMS to really connect with your client base and get ahead of your competitors. 

However, one should be careful. Do not spam users. SMS should be strictly used for time-sensitive promotions or loyalty programs to increase engagement. Brands like Zomato and Swiggy send SMS campaigns strategically to users who have made a certain purchase and are more likely to make another purchase.

3. Make customer service a priority

Do not think of customer service as an after-purchase service. It needs to be given as much importance as making a sale. If you do so, your customer retention rate will automatically shoot up. 

For example, you must assist your customers with any issue they might have even after their guaranteed period is over if it’s not very expensive for you. It helps build trust. Many brands invest in after-sales surveys to actually understand if the client is satisfied with their product or not. Car companies like Honda invest in after-sales services as well so as to retain their existing customers. 

4. Customer loyalty cards

Customer loyalty cards make the customer feel as though they are part of the brand. Include a point system that they can collect whenever they like. Brands like Starbucks and Westside increase their customer database as well using the information provided. It works both ways. 

Many customers today want more than discounts and points from their favorite brands. They wish for early access to sales and also a preference for new product launches. This makes them feel valued and special. For example, Nike loyalty program members enjoy early sales access and member-exclusive products. 

This makes them feel valued and also gives them the experience of being a special customer over the others. 

5. Social Media Strategies 

Social media is a good way of connecting with your customers both new as well as older. Engage in new conversations with your followers. Social media is more than just increasing the number of followers. It is also about building a relationship with them.  Listed below are a few ways of doing so –

  • Build a relationship with your followers – Make sure that you are more than just any other ‘brand’ to your audience. You need to have a humanistic approach and build relationships with the audience. For example, instead of template messages, you can send personal messages – it is as simple as that. 
  • Create engaging content – Customers like content that is engaging and also authentic. According to a survey, users do not wish to see how important your product is but how your product can bring value to a user’s life. For example, Gen Z loves brands like Nike and Netflix that curate and create products and content, keeping in mind their needs and feedback as well. 
  • Listen to what your customers have to say – Take feedback seriously. Also, use social media as a way of tailoring your content and customer retention strategies. Creating solutions that resonate with what your customer is looking for is very important.
  • Provide value to your customers – Use your social media pages in such a manner that they provide value to your customers. Add offers and discounts within these pages so that users will engage more and keep coming back.

6. Customer referrals

Encourage or entice your existing clients to refer your brand to other people. Uber has a very strong referral program that works for them. Do this through gratifications like points or discounts that will motivate them to refer it to friends and family. The offer should be so enticing that the person cannot refuse. Other brands like Avon and Big Basket also have strong referral programs. 

7. Offer insights that add value

Offer insights through blogs or posts. Basically, deliver new information to your customer that adds value to them. It can be a new way of using your product as well. For example, Nature’s Basket has a blog on which users can check out different recipes using all the products available in their stores.

They have multiple blog categories that cater to different needs such as diet food, vegetarian food, kids section, etc. 

Another example of how to add value for customer retention is Hyundai. They have multiple blogs and posts that showcase why one should buy their cars, how to use them, in-depth insights on the mechanics of the car, and also customer experiences. 

8. Use personalization

Always make use of personalization in your brand communication. It adds a humanistic touch to your communications and makes it less corporate or sales-y. Personalization is also using audience as well as data analytics to meet the individualistic needs of a particular customer.

You can also do so by creating a buyer persona and mapping their journey. For existing customers, understand how they have previously interacted with your brand and accordingly send out information. 

Sephora is the best example when it comes to personalization. They promote their brand in a way that every customer feels ‘seen’ and ‘heard’ due to their hyper-personalized strategy. They personalize client experiences across channels, collect customer feedback and use this data to provide customer-centric offers.

Read more on how to create a buyer persona here.

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Q. What are the four keys to customer retention?

The four keys to customer retention are – 

  • Provide the best services
  • Implement the feedback given to you
  • Provide services over and above the usual
  • Always be polite even if the customer is angry

Q. What are customer retention examples?

Some customer retention examples include – 

  • Customer surveys
  • Personalized services
  • Good customer service
  • Discounts
  • Rewards
  • Loyalty Points or subscriptions

Q. What are three types of customer retention methods?

The 3 types of customer retention methods are – 

  • Situational bonding
  • Legally binding
  • Emotional bonding


We hope that you enjoyed reading this article on customer retention strategies. We recommend this online digital marketing course that will not only expand your knowledge in the field but also give you the technical knowledge necessary for execution. You can also check this MBA in Digital Marketing out if you are on the lookout for an MBA-Level course.

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Karan Shah

Founder and CEO at IIDE

He is a passionate public speaker and teacher for over 10 years. He has trained over 60,000+ students and 25+ corporates in Digital Marketing via online and offline channels. He is a Harvard alumnus specialising in E-commerce......[Read full bio]


  1. Soham Mudliyar

    This article effectively highlights the importance of customer retention and provides a comprehensive list of reasons why businesses should prioritize keeping existing customers. The points made, such as reduced marketing costs, higher ROI, increased conversions, and word-of-mouth sales, clearly emphasise the financial benefits associated with customer retention.Moreover, the inclusion of the customer retention rate formula and the benchmark for a good retention rate adds a practical aspect to the discussion, giving readers a clear metric to assess their customer retention strategies.

  2. Srushti Sawant

    I appreciate the insights shared on customer retention strategies. Businesses must prioritize keeping existing customers satisfied. The tips provided, such as personalized communication and loyalty programs, seem practical and effective. It also would be beneficial to discuss the importance of gathering feedback to continuously improve services. Overall, a helpful resource for businesses aiming to build long-term relationships with their customers.

  3. Sushmita Biswas

    Absolutely! Succeeding in business means enhancing and automating customer retention tactics. Tech helps predict needs, personalize interactions, and speed up processes for stronger loyalty. Data insights drive precise communication and tailored rewards, boosting engagement. Automation not only saves time but also fosters proactive relationship management, ensuring happy customers. It’s about lasting relationships and maximizing each customer’s value, not just efficiency. Great tips on using technology for memorable customer experiences!

  4. Sushmita Biswas

    Leveraging data analytics, personalized interactions, and automated campaigns, businesses enhance customer retention. With chatbots for support and real-time feedback, relationships strengthen. Continuous refinement through A/B testing ensures sustained loyalty, fostering lasting connections and maximizing customer lifetime value.

  5. Tanisha Varde

    Customer retention is crucial for any business looking to thrive in today’s competitive market. Implementing effective strategies to keep existing customers engaged and satisfied is key to long-term success. From personalized communication and loyalty programs to excellent customer service and regular feedback collection, there are various approaches to enhance retention rates. By understanding and addressing customer needs and preferences, businesses can foster stronger relationships and encourage repeat purchases. Consistently evaluating and refining retention strategies is essential to adapt to evolving market dynamics and maintain a loyal customer base.

  6. Soham Patil

    Customer retention strategies play a vital role in business sustainability. Whether it’s offering excellent customer service, providing incentives, or nurturing relationships through personalized communication, every effort counts. Happy customers are more likely to stick around and even become brand advocates, contributing to long-term success. Investing in retention not only boosts profitability but also strengthens brand loyalty. In today’s competitive landscape, prioritizing customer satisfaction is a smart move for any business looking to thrive.

  7. Tajagna Multani

    In business, keeping customers is essential. It all comes down to satisfying customers so they return for more. Little things like attentive listening, loyalty plans, and individualized care can have a significant impact. Customers are more likely to remain loyal when they feel heard and appreciated. It all comes down to developing trust and relationships. By concentrating on these tactics, companies can build a foundation of devoted clients who stick with them throughout time.

  8. Taher kaderji

    This blog post on customer retention strategies is a valuable resource for anyone looking to improve their customer retention rates and build long-term relationships with their clients. The post offers a range of practical tips and techniques, from creating personalized experiences and offering loyalty rewards to gathering feedback and addressing customer concerns. It highlights the importance of understanding your customers’ needs and preferences, and tailoring your approach accordingly. Whether you’re a small business owner or a marketing professional, this post provides actionable insights to help you retain your customers and grow your business. Well done to the author for sharing such a comprehensive and useful guide!

  9. smriti dubey

    Understanding and implementing effective customer retention strategies is essential for any business to encourage and promote long-term relationships with their clients. This blog post gives an in depth look inside the need of cultivating relationships with customers as it helps in brand loyalty and reviews and feedbacks helps with the growth of a business.


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