Customer Retention

What Is Customer Retention? (+8 Effective Retention Strategies!)

Customer retention is a business’ ability to turn customers into repeat customers. These repeat customers will bring in recurring revenue which results in higher profits.

What is customer retention? 

Attract customers. Make them stay. That is essentially what customer retention is all about. 

Now, let’s dive deeper. 

Customer retention is a business’ ability to turn customers into repeat customers. These repeat customers will bring in recurring revenue which results in higher profits. 

As a business owner, you have worked hard to bring in new customers via various channels. You spend money on advertisements, marketing campaigns and so on to attract new customers. 

So when these customers show up, you want to make sure they stay. Simply because acquiring new customers is way more expensive than retaining your existing customers. 

A good customer retention strategy is important to make sure your customers choose you over and over again - instead of switching to a competitor. 


Explore Tools for Customer Retention


Let’s run through some of the benefits of retaining customers:

  • Save costs on customer acquisition 

Customer acquisition can be anywhere from 7 to 13% more expensive than customer retention.

Therefore, it makes more sense to invest more time and energy on customer retention. 

Customers who already know your brand and have experienced your products and services are more likely to buy from you again. 

  • Repeat visits, repeat purchases, increased revenue 

As mentioned above, customers who are already familiar with your brand are more likely to come back - as opposed to a completely new customer. 

Statistics also back this claim.

This study found that the probability of selling to an existing customer is 60 to 70%. 

Whereas the probability of selling to a new customer is a mere 5 to 20%. 

Even when you have new products and services, your existing customers are 50% more likely to try it out. 

This shows that existing customers are and will be responsible for the bulk of your revenue. 

  • Create brand advocates or ambassadors

Have you ever met someone who can’t stop talking about how they go to Starbucks every morning? Or how every pair of their sneakers have to come from Adidas? 

What does that do? It gives Starbucks and Adidas free advertising and marketing. Their fans and brand advocates do all the work for them. 

When you have a good customer retention plan which results in an amazing customer experience, your customers will love you and rave about you. 

Many businesses, aside from the ones mentioned above, thrive on their loyal customers. 

We’re not just talking about big businesses here. The same applies for that famous burger shop down the road, the neighbourhood bar, or the homegrown fashion brand that people love. 

Once customers love you, they won’t shut up about you. That’s the ultimate goal of customer retention. 

So here comes the question: how do you retain customers? 

What are some of the things that you should be doing but haven’t started on it? 

In this article, we’re going to look at some ways to retain customers that can apply to both online and brick-and-mortar stores. 

1.  Get to know your customers through a powerful CRM 

You can’t start retaining customers until you know your customers inside out. 

If you haven’t already, invest in a comprehensive CRM tool that gives you a 360 view of your customer’s profile. 

By knowing your customers, you can decide the best and most effective ways to promote and market your products. 

Get to know your customers as much as possible. Most importantly, take note of their names, ages, and birthdays. 

Why is this information important? 

Your customers age, for example, can tell you which group they belong to. If your customers are mostly people who are 30 and above, then you know they have good purchasing power. 

This can help you with a few decisions like pricing your products and channels to focus on for promotions. 

For example, if your customers are in their late 30s, you would spend more time promoting on LinkedIn than TikTok. 

If your customers are mostly students, then you can offer Wifi and some student discounts. 

Knowing your customers well means you can also create a better experience for them. For example, you can send them birthday rewards. Both online and physical stores can do this. 

46% of customers say that they are disappointed when their favourite brands do not give them any birthday rewards.



People love to be spoiled on their birthdays. This is why bars (almost always) give out free drinks to their customers on their birthday. Hair salons offer free hair wash. Online stores give out extra points and special birthday discounts. 

Birthday rewards give customers a chance to come back to your store and show you off on social media. 

Here's an example of how Innisfree did it: 

birthday rewards

2. Establish meaningful engagement by studying data 


Meaningful engagement with your customers is what will set you apart from your competitors. 

One of the ways to do this is by tracking purchases and studying data from your CRM.  

This way, you get to learn what your customers like and don’t like. You understand your customers better. 

In fact, it’s also an opportunity for you to learn more about your products and services. 

Think of it like going on a date. You want to find out as much as possible about this person before the date - so you know what they like and what conversations to make. 

Same goes for your customers. 

Once you are able to identify which products and services your customers love, it will be easier for you to come up with an effective customer retention plan.

For example, if your best selling item is wine, you can have a dedicated day of the week - or month - for wine lovers. 

Set a benchmark for minimum purchase so the discount makes sense. For example, buy 2 glasses and get the 3rd for free. 

Cross sell with snacks like a cheese or fruits platter, cold meats, shrimp cocktail, and other items that pair well with wine. 

Tracking purchases can also help you shift your time and energy to items that are raking in the most revenue. 

3. Use messaging tools to engage & build a relationship

As we have established in the previous point, customer engagement is an extremely important part of customer retention. 

“By caring about building relationships with potential customers and taking an interest in their world, it can significantly improve the odds of securing a sale and retaining that customer for the long-term” - Todd Kunsman, Director of Marketing 

Selling without building a relationship with customers will result in hard selling. 

When customers feel like they have a relationship with you, it increases the chances of them buying from you. 

So how do you build a relationship with your customers? You need the help of some tools. 

For online store owners, it’s fairly easy to start engaging with customers as you already have their details. Next, you need to plan a retention campaign along with a messaging tool. 

Start with a welcome message. Let them know when they will receive their order and who to call if they need any assistance. 

A week later, you can send personalised recommendations based on their purchase history. Make sure to use the customer's first name in the emails or SMS. Keep nurturing them and don’t lose touch. 

For physical store owners, you’d probably have to get customers to sign up for a loyalty or rewards program so they can provide their contact information. 

Once you have their email or phone number and their purchase information, you can start your nurturing campaign and build a relationship with customers. 

A week later or so, send them some points that they can use for their next purchase. Along with that, keep them updated about new items on the menu, your new happy hour promotions, Christmas specials, and so on. 

For example, “Hi Ryan, thank you for your last visit. Come try our new Christmas tiramisu this week and get 5% off when you flash this message. Available until the 28th of December.” 

Aside from that, during times like the pandemic, engagement becomes extremely important. 

Many business owners used email to communicate and update their customers about change in operating hours, health and cleanliness policies, contactless deliveries, bundle deals, care packages and more. 

Engagement does not stop with email and SMS. 

Business owners should also pay attention to reviews and comments on Google, social media, and their website. 

You should be proactive in answering customer’s questions and replying to reviews. Promptly respond to their messages and calls. 

If someone leaves a good review, thank them and tell them you look forward to seeing them again. 

88% of consumers have read reviews to determine the quality of a local business (vs. 85% in 2013) 

Bright Local


If you see a negative review, address the situation. 

Apologise and assure them that you will improve your services. Thank them for pointing out your areas of concern. 

4. Make use of feedback and suggestions forms 


Surveys, feedback and suggestions forms are very powerful ways to engage with customers. This works for both online and offline stores. 

Customers love giving feedback and checking whether you followed through. 

This can help to increase customer satisfaction and hence, retention. 

These feedback forms can help you identify your areas of improvement so you can improve your products and services. 

It can also help you understand customer’s pain points so you can fix them and improve customer experience. 

For example, maybe the reason a customer isn’t coming back to you is because you don’t accept credit cards and your store is cash-only. 

More and more customers are going cashless, so you might want to fix this immediately. Give them the option to pay with cards - or even e-wallets. 

For online stores, certain features like easy return, promo codes, next-day delivery are all key features that increase customer retention and loyalty. 

You won’t know what your customers want unless you ask them. 

Some loyalty programs like Eber come with NPS and DM features so you can easily get customers to rate your products and services. 

5. Create engaging content 

Customers of today are very proactive. 

Before they even visit your store, they have already checked out your social media pages. 

Once they buy from you, they will follow your social media pages and leave a review. Don’t let the engagement stop there. 

Make sure your social media is filled with fun, engaging content. Update regularly. Post quizzes, greetings, trivias, fun facts, and so on. The possibilities are endless. 

The more customers see and engage with your content, the more likely they are to remember you. 

When they remember you, they go back to you.  

6. Train your staff well 

As a business owner, you can’t be at your store 24/7. 

Even if you are, there are other touch points that your customers encounter. You need to make sure that customers have a good experience at every touch point. This includes enquiries via phone call, email, FB messenger, Instagram DM, and so on. 

That is why it is important to train your staff well and make sure that they reflect your company’s value and principles. 

When customers walk in, they should be greeted with a smile and be assisted in any way possible. If it is a restaurant, your staff members can help them find a suitable seating and make food recommendations. 

If it is a beauty store, your staff can help with products that best suit the customer’s needs. 

For online stores, it helps to have a chat function with someone on stand-by so customers have someone they can turn to for assistance. You can also make use of automation bots so it works 24/7. 

Social media managers are equally important. The person replying the messages and comments must be helpful, polite, and able to solve problems with minimum supervision. 

7. Organise events to build a community 

Events are the best way to attract new customers and retain existing customers. 

Customers who are new might be hesitant to dine at your restaurant. 

However, if it was a workshop where they get to learn how to make a cocktail, it sounds more fun and they are more likely to show up. 

When they show up, they are connecting with other patrons in the restaurant. They are now familiar with the place. They know what’s on the menu and they know where to park. 

This will increase their chances of visiting your restaurant in the future. 

This can work with online store owners too. 

If you’re running a beauty store, have a pop up day where customers can drop by and get a makeover. 

Better yet, you can organise virtual meetups or webinars where you share beauty tips in real time and customers are able to interact with you. 

8. Reconnect with lost customers 

It’s an age-old adage; it’s always cheaper to bring back an existing customer than acquiring a new one. 

With a powerful CRM or loyalty program, you will be able to see who are your existing customers who have not come back in a long time. 

Reconnect with these customers and give them some incentives to come back to your store. 

If it still does not work, you can go resort to sending them a feedback form to find out why. 

Make an effort to find out what went wrong for them. You may have lost this customer, but you can make changes and improvements to make sure it doesn’t happen again. 

And you're set! 

We hope you’re now better prepared to launch your customer retention plan and keep customers coming back to your establishment. 

Invest in a good CRM or loyalty program that can do most of what we’ve mentioned above. 

Eber, for example, comes with a powerful function, analytics, rewards, point, tiered membership, gift cards, built-in messaging tools, and more. It is designed to give you a 360 view of your customers and plan a retention strategy for each segment. 

Eber also works seamlessly for both online and offline stores - and it integrates with most POS. 

For any enquiries about launching your customer retention program, reach out to me at 


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