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12 Customer Retention Techniques To Build Your Business

Published: May 8, 2023

Customer retention can be tough. Since competitors emerge consistently, offering buyers better features, better deals, or a better experience, retaining your existing customers becomes so much more important. In fact, studies have shown that increasing your customer retention rates by just 5% leads to an increase in profits by 25% to 95%!

Just to highlight the significance of this stat, the same study shows that acquiring a new customer is about five to 25 times more expensive than keeping hold of your existing clients. Retaining customers, then, not only becomes an important aspect of how attractive your business is to investors but is also necessary to improve your profits.

The snippet below from HubSpot shows how you can calculate your customer retention rate.

Customer Retention Techniques_Snippet

While each business, big or small, has its own reason for customer churn, there are a few simple customer retention techniques they can apply to keep customers happy and engaged and prevent them from leaving.

Target the Right Customer Segment

Get as detailed as you can while planning who your ideal customers are. Create customer personas by listing down their demographics, interests, age, and personality type. With these personas, you have a firm idea of whom it is your product or service helps the most and you can then plan your retention strategies accordingly. Remember, it’s easier to retain customers who are the best fit for you than ones who aren’t.

Focus on Building Relationships

While your end target as a business is always to convert sporadic customers to loyal users, your aim should be focused on building a relationship with them. Right from your first interaction with them, whether through an ad or a social media post, you should look to engage with them in a manner that gradually builds into a relationship without it seeming forced; you can interact with them through welcome emails, informing them about upcoming contests or events, etc. Analyze the actions they take in relation to your business, such as clicking on your ad or signing up on your website, and then use this data to personalize your further interactions with them.

Deliver Valuable Content

How often have you been at the receiving end of a spammy and overly promotional email by a company? Several times, right? These sorts of interactions do absolutely nothing to retain customers. However, if they create valuable content that addresses pain points or provides new insights which add genuine value to people’s lives, people are more likely to stay. The earlier in the engagement cycle you deliver this useful content (say, email newsletters, infographics on your website, etc), the better. Even if customers aren’t purchasing at the moment, by sending informational content, customers are likelier to trust you while giving them good reasons to buy from you down the line.


While the type of content you create is an important customer retention technique, the way in which you talk about your brand is an important aspect, too and this is where storytelling comes into the fray. By directly connecting the work that you do with the problems your customers face in their lives, you are ensuring that they realize and remember the value you bring to the table. Create compelling blog posts, host engaging webinars, and upload creative videos which give concrete proof of how your product helps people improve their lives. Make sure that your voice and tone is crafted in a manner that matches your customers’ aspirations while being consistent with your brand.

Use Social Proof

Social proof, undeniably, is a strong factor when it comes to persuading clients to stay. If you’ve identified a customer who hasn’t engaged with you in a while for whatever reason (perhaps they found a similar company and are confused about which service to go for), by promoting social proof and favorable customer reviews on your site or in your newsletters, they are likelier to be swayed in your favor.

Create a Sense of Hype

Research indicates that couples are likelier to have a healthy relationship and stay together for longer if there’s an element of surprise and mystery surrounding their relationship. This, in a way, holds true with you and your customer too! If you’re about to unleash a slew of major changes to your product with a bunch of added functionality, don’t just unleash it all at once on your customers. Build anticipation on social media and in your newsletters a couple of weeks in advance with some visually captivating preview posts to generate a sense of suspense among your customers and get them to want more.

Identify Churn Patterns Early

When it comes to customer retention techniques, prevention certainly is better than cure. Once a customer is lost, bringing them back is pretty hard. So what you should do is actively segment your customers based on their interaction and frequency of engagement with you. Once you’ve done this, you get a clear idea of the customers who are at risk of dropping off from your engagement funnel and can take necessary steps to intervene and reduce the chances of this happening. For instance, you can target customers who have been inactive for a few months and try to get them back “online” by offering them extra services or training material so they’re well-versed with your product. Remember the importance of tracking customer journeys so that you can identify which group requires more customer service or personalization and prevent them from leaving.

Use Surveys

Surveys are useful to connect with your customers and get to know what shortcomings your product or tool has, if any, and what your strengths are as a business. You can mutually benefit by sending these surveys (via SMS or email): your business improves as a whole since you can pinpoint exactly what customers are looking for, and secondly, these surveys show customers that you care about their feedback which makes them feel valued.

It’s important, however, to work on whatever issues customers have with your business so that it doesn’t just look like you superficially care but that you genuinely do. This will only help cement your bond with them.

Follow Up Regularly

Whether new or cold, your customers need to be followed up with regularly if you want them to continue using your services. To do this, build a communication calendar which is basically a timeline-based list of emails, texts, or special offers which your business should send to your customers regularly to keep them engaged. You can use automation tools to plan and schedule these interactions in advance. For instance, CallHub lets you create text message campaigns beforehand so that your customers are updated without you having to do any last-minute work.

By consistently following up with customers and sending them relevant material, you can persuade them to stick with you.

Reward Loyal Customers

In today’s world of impulse-driven decision making, loyalty is something that businesses must appreciate and reward. So reward loyal customers as a part of your customer retention strategy. Based on the level of engagement the customer has had with you, you can offer a corresponding gift. For customers who’ve just started using your service, you could send them a free ebook explaining the various functionalities of your product in detail, while for older customers, you can send gift cards or vouchers.

Host Events

To build a sense of community around your business, organize offline and online events and invite your customers to attend. Anything from webinars and podcasts to open house events and product giveaways counts. Remember when we talked about how businesses should build hype and excitement around important updates? Well, the same goes for events, except, well, it shouldn’t be a complete surprise, or no one will attend!

You can get interested customers to register through text sign-ups and online forms to estimate how many people would be attending. These events are a good retention tactic since they make customers feel like they are an actual part of your business as opposed to being just “customers”.

Be Socially Responsible

This is another form of motivating customers to stay. If customers use your service and you’ve provided good end-to-end customer service, great! But a way of making them feel even better is by letting them know that they are helping a particular cause by using your brand. For instance, your business could donate a certain amount of money to a particular charity or nonprofit based on every sale you make. By letting customers know that their actions are directly contributing towards creating a positive change, you’re giving them a powerful reason to remain your customer.

Since customers are vital to your business, you should try everything you can to ensure they remain, and the above are some key customer retention techniques for you to follow. Definitely try different strategies based on your industry, target niche, or the size of your team.

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