We’ve said it before, and we’ll say it again: customer retention programs are vital to any company, particularly small businesses. While it’s always exciting to gain new customers, it’s just as — and possibly even more – important to keep the ones you already have.
Industry data shows that 65% of a company's business comes from current customers and 80% of a business’s future profits will come from just 20% of its existing customers.
That’s why if you don’t have a customer retention program in place, now is the time to create one.
Have a look at the pointers and examples below to get inspiration on how you can craft a customer retention strategy that works for your biz.
Table of contents
- Make sure you acquire the right people to begin with
- Map out a customer retention plan
- Educate your customers
- Invest in sustainability
- Consider a subscription based model
- Ask for feedback – and take action
- Give shoppers relevant nudges to purchase
- Celebrate your existing customers
- Get up close and personal with shoppers
- Be available on multiple channels
- Make the buying process fast and smooth
- Provide a sense of community
- Consider gamification
- Offer customer only perks
- Highlight customer milestones
- Show customers how much you appreciate them
- Remind customers about the benefits of shopping with you
- Continuously measure your performance
Make sure you acquire the right people to begin with
First things first: you won’t have a successful customer retention program if you keep acquiring shoppers who aren’t a good fit for your brand.
For example, if your main customer acquisition strategy is to provide steep discounts, then you’ll likely attract deal-hunters who won’t purchase from you again unless there’s a huge sale. Or, if your brand messaging is all over the pace, then you might attract people who don’t share your values and won’t stick around for the long term.
Before diving into different customer retention tactics, make sure your current sales and marketing efforts are targeting the right people. Doing that can mean different things depending on the business, but here are some suggested steps to take:
- Get clear on your brand values and story.
- Make sure your sales and marketing collateral reflect what you stand for.
- Implement marketing and sales strategies that are designed to attract high-quality customers.
Map out a customer retention plan
Having a plan makes it easier for you to execute your strategy and measure success so you can improve. Before rolling out your program, take the time to iron out a customer retention plan. You can do this by:
- Documenting the shopping journey of your customers. Map out how customers find you, what motivates them to buy, and what gets them to repurchase.
- Figuring out the right customer retention tactics. There are a lot of ways to implement a customer retention program (we’ll share those below). But not all strategies are right for your business. Do your research, weigh the different options, and determine which approach fits your business model and customer preferences.
- Knowing what success looks like. Part of your customer retention plan requires defining success. Set some KPIs for your initiatives and track them carefully so you can stay on the right track.
Educate your customers
One of the best ways to keep customers coming back is through education. Specifically:
- Educating customers on how your products benefit them.
- Giving them non-promotional info that can enrich their lives.
Taking the steps above will help your customers see the value that you bring to the table. And by giving them non-salesy info that they can actually use, you’re positioning yourself as a trusted authority in your space, ultimately increasing the likelihood of repeat purchases.
Energy Muse, a retailer that sells crystals and jewelry, does this by regularly sending tips on how to use crystals to promote positive energy. Most of their messages are information-driven, though they occasionally plug their merchandise whenever appropriate.
In the email below, you'll see that the Energy Muse team created a free worksheet with journaling prompts to help people release feelings of anger. And at the bottom of the email is a blurb links to relevant products.
Invest in sustainability
Fact: consumers care about sustainability and they’re more likely to support businesses that promote green initiatives. Industry data shows that 42% of consumers prefer products that use sustainable materials and 50% claim to have reduced their use of plastic in the past year.
One of the easiest ways to implement sustainability in your business is by using eco-friendly packaging. Take the fashion brand Rendezvous The Label as an example. It prides itself in crafting sustainable feminine pieces made in California. In line with this, the brand also ships its products in compostable packaging, proving that when it comes to being eco-friendly, Rendezvous can walk the talk.
Consider a subscription-based model
What better way to boost customer retention than by making repeat purchases automatic? If you’re selling products that need to be replenished, consider setting up a subscription-based model that sends customers your products automatically, at predictable intervals.
It’s a win-win situation for your business and shoppers alike. Your customers benefit because they won’t have to manually purchase your merchandise, and your business gets a repeatable source of revenue.
Check out this example from Zest Tea, which offers a subscription service for shoppers who want to have tea delivered on a regular basis.
Ask for feedback — and take action
Reach out to your customers and ask for their feedback. In doing so, you’re showing people that you care about their opinions AND it helps keep your brand top of mind. It also gives you valuable intel that you can use to improve your products and services, so you can continue keeping your customers happy.
Personal care brand Kosas does this really well. Take a look at their email below, which prompts shoppers to rate and review their recent purchase. What we love about this message is it lets people submit a review right from the email itself, making the experience much more seamless.
Give shoppers relevant nudges to purchase
You may need to give some customers a little push to get them to buy from you again. So, come up with ways in which you can encourage shoppers to check out your products or services. There are several ways to do this:
Prompt customers based on the timing of their previous purchase. Use your customers’ shopping timeline to come up with relevant product recommendations. Let’s say your store sells baby products. If a shopper buys something for a 3-month child, chances are they’re going to need items for a 6-month old in 3 months’ time. Using that insight, you can send them age-appropriate product suggestions.
Alert them about new arrivals they might be interested in. There’s nothing like fresh merch to entice people to buy. If you stock up on new products, be sure to alert your customers. Bonus points if you send product suggestions related to their previous purchases. For instance, if you know that someone loves to buy footwear from your store, touch base with them when you have new shoe styles in stock.
Use a special holiday or occasion to encourage them to buy. See to it that your marketing calendar highlights special events or occasions throughout the year. Events like Mother’s Day and Christmas are of course, a given, but see if you can get a little creative by finding holidays that are specific to your niche. If you sell pizza for example, then you can celebrate National Pizza Day (which usually happens in February) or Pi Day (which takes place on March 14 every year).
Celebrate your existing customers
People are more likely to buy from you consistently if they feel seen and recognized by your brand. That’s why you should regularly put the spotlight on your customers. Feature them in your social media posts and marketing collateral and highlight the cool ways that they’re using your products.
That’s what L.O.M. Fashion is doing with its "Your Mask" story highlight on Instagram, which is a compilation of customers wearing L.OM.'s masks.
Get up close and personal with shoppers
Personalization is a buzzword that shows up repeatedly in marketing conversations, and for good reason: it works. Shoppers are more likely to purchase if you personalize your interactions with them.
Personalization often comes in the form of tailored emails and campaigns. That’s all well and good, but you should also find ways to take your personalization game to the next level. Automated emails work to a certain extent, but they’re quite common, and pretty much every brand is doing it.
You can stand out by getting up close and personal in a way that other brands can’t or won’t. One example? Handwritten notes.
Check out this handwritten card from a Chanel associate, which contains specific details about the shopper’s visit to the store.
Of course, writing these cards takes a lot of work, so you need to be smart with your methods. You could, for instance, choose to focus on the top 10% of your customers rather than sending cards to everyone. Doing so will maximize your efforts and increase your likelihood of success.
Be available on multiple channels
Part of getting people to buy from you is making sure that they encounter your brand and products on the right channels or platforms. Identify the websites, apps, or tools that your customers are using, and make sure you have a strong brand presence on those platforms.
If you’re a brick and mortar business that caters to people in your neighborhood, establish a strong local presence by being active in your community and investing in local SEO so that you’re found on Google.
Does your audience like hanging out on social sites like Instagram or Pinterest? See to it that your brand is visible on these platforms.
The right channels or platforms in which to invest depends on your business, so get a solid understanding of your customers’ habits and preferences before mapping out your strategy.
Make the buying process fast and smooth
Want people to buy from you repeatedly? Make it easy for them to do so. Streamline your checkout process and simplify the ways that people can pay for your products. Depending on your store, you can do things like:
- Implement one-click checkout.
- Store your customers’ details and preference and automatically fill out their checkout form.
- Be flexible with payments by supporting PayPal, Apple Pay, as well as “buy now pay later” services like Afterpay and Klarna.
Provide a sense of community
Building a community is an amazing customer retention strategy. It strengthens your brand by giving you and your customers an avenue to share stories, offer support, and more. Needless to say, when your customers feel heard, valued, and supported, they’re more inclined to shop with you again.
As we discussed in our post on community building, one brand that's excelling at this strategy is Athletic Greens, which has a branded Facebook Group where customers can meet and discuss topics around health and wellbeing.
Consider gamification
Bring out the competitive side of your customers by gamifying their shopping experiences. Create fun competitions and rewards that encourage people to interact with your brand.
Starbucks is a master at this. The coffee company regularly runs “Double Star Days” which give loyalty members the opportunity to earn double points with every purchase.
Offer customer-only perks
Exclusivity is another great motivator for your customers. Products or offers become a lot more attractive if buyers know that they’re getting a special deal that other people don’t have access to. That’s why invite-only shopping events or promotions are so effective.
The local supermarket Mother’s Market and Kitchen occasionally sends out members-only coupons that are redeemable for just one day. That sense of exclusivity coupled with the tight deadline motivates customers to head to the store.
Highlight customer milestones
One other way to make your existing customers feel special is by highlighting the journey that they’ve had with your brand.
Send them milestone emails that shed light on things like the number of purchases they’ve made, the points they earned (if you have a loyalty program) or their top items.
When done right, “milestone” initiatives can bring up a sense of nostalgia and remind people about why they love your business.
Here's a cool example from DavidsTea. The brand celebrated its 10th anniversary by looking back at each customer's specific journey with the company. The message contained highlights like when the shopper made their first purchase, how much tea they bought, and their go-to product.
Show customers how much you appreciate them
Start an appreciation campaign that shows existing customers how much you love them.
Take a leaf out of Birchbox’s playbook. A while back, the brand launched and produced a video featuring company employees talking about the specific things they love about Birchbox's customers.
Another way to show your appreciation? Use your product packaging. Take a look at Sparkle Collective, which uses an adorable sticker to thank shoppers for their purchase.
Remind customers about the benefits of shopping with you
Sometimes, people need a reminder of what makes your brand so great. Do your customers (and your business) a favor by talking about the advantages of your products or services.
Do you offer the highest-quality materials in the market? Are your customers supporting a good cause whenever they buy from you? Maybe you have an amazing guarantee.
Whatever the case, package up all those reasons and make sure shoppers know about them.
Blue Apron does this through a message that rounds up 5 benefits that shoppers might not know about the brand.
Continuously measure your performance
Don’t forget about customer retention measurement. Periodically run the numbers in your business to see if repeat purchases are trending in the right direction. Doing so keeps you on the right track and helps you determine if you need to tweak your initiatives.
Depending on your business model, you can measure the success of your customer retention programs by tracking metrics like:
- Repeat purchase rate
- Repeat purchase ratio
- Time between purchases
- Customer lifetime value
- Churn
We hope this inspires you to create your own customer retention program!
Whew! We just provided a handful of customer retention tips and examples. If you made it this far, you now have a solid understanding of what it takes to keep your customers coming back.
The next step? Examine your business model and current marketing efforts, then weave in the right retention strategies into your initiatives.
Good luck!