7 Effective Strategies to Improve Customer Retention

7 Effective Strategies to Improve Customer Retention

Customer Acquisition and Customer Retention are two of the most important aspects of any eCommerce business. While acquiring new customers can be arduous, retaining customers is, sometimes, even more challenging. Once a visitor/prospect becomes your customer, you need to ensure that they stick to your brand in the long run.

You might be surprised to know but around 65% of a company’s business comes from existing customers (Source: Small Business Trends). If you lose the grip on your existing customers, you will lose them to your competitors.

What is Customer Retention?

Customer retention is defined as the process of retaining your existing customers or in other words, you can say reducing customer defections. It involves various activities and programs that a Brand performs to keep its customers loyal to the Brand.

How to Calculate Customer Retention Rate?

For customer retention rate calculation, firstly you need to define the period for which you want to calculate the customer retention rate and you should have some parameters defined such as customers at the start of the period, customers acquired during the period, and customers at the end of the period. Once you have these numbers, you can easily calculate the customer retention rate. The formula for customer retention rate is as follows-

Customer retention rate = {(Number of customers at the end of the period- Number of customers acquired during the period)/(Number of customers at the start of the period)} x 100

How to calculate customer retention rate?

Customer Retention Strategies

As I said above, different businesses have different strategies to retain their customers but they are a few which can be applicable to all types of businesses.

Let’s try to find out how you can improve customer retention in your online business. In this article, I will discuss 7 customer retention strategies that can be helpful to retain current customers.

1. Launch a Loyalty Program

A loyalty program is a marketing strategy used by Brands where they reward some loyalty points to customers on every successful purchase, which they can use a discount on their next purchase. The motive behind offering loyalty points is to encourage customers to continue shopping from the same brand in the future.

Many eCommerce businesses run customer loyalty programs and they have proved to be an effective customer retention strategy. They ensure repeat purchases and ultimately improve customer retention. It creates a win-win situation for both the Brand and the customer.

Loyalty points help in Customer Retention

The loyalty Points module by Knowband is a feature-packed module that lets you provide loyalty points to your customers on a number of factors. If you are thinking to add a loyalty points system to your business, this module will be a perfect fit. It is available for a number of eCommerce platforms. Check out:

PrestaShop Loyalty Points Addon

Magento Loyalty Points Extension

OpenCart Loyalty Points Extension

2. Personalize Your Emails

Email marketing is still one of the best ways to strengthen your relationship with your customers. So once they land in your email subscribers’ list, take the onus of making them your valued loyal customers.

Here is what you can do. After the user has made the purchase, thank them for showing trust in your brand and choosing your platform to shop. Ask them about their shopping experience. It is a nice way to start the conversation and leaves a good sign of a healthy relationship in the future.

Afterward, you can ask your customers if they had any issues with the product they purchased. Appreciate them for leaving a review. It shows that you value your customers’ opinions.

Then in your next email, you can recommend some products that could be related to their previous purchase or some products that they might be interested in. And this is how your emails should go always. Keep engaging with your customers at regular intervals. This makes it one of the effective strategies for customer retention.

Personalized Emails

Keep a few things in mind. Do not clutter your emails with just the Sales tag every time, else you would land in their spam folder or they might even unsubscribe. Add a personal touch to your emails. Customers feel more connected to your emails if it contains a personal touch.

You need to add value to your customers’ lives if you want to improve customer retention.

3. Bring Surprises to Your Loyal Customers

Is there anyone who doesn’t love surprises? We all do. Surprises are a delight and bring pleasure to one’s life.

Surprise your existing customers at regular intervals with some amazing deals. Offer them credits or discount code and persuade them to come back to your store. If you have a database of customers’ birthdays, send them exclusive offers. Add happiness to their lives and make their day more memorable.

This is an important part of customer retention management.


There cannot be a better way to improve customer retention than making your customers feel special and treating them well. Customers love it when they are presented with some personalized offers, especially when they expect it least. It leads to a good brand image and leaves a positive remark about your Brand.

This customer retention strategy does more than just improving customer retention. It does free word-of-mouth, builds customer loyalty and trust, and improves brand loyalty.

Loyal customers need to feel that you still care for them and haven’t forgotten their contribution to your business.

4. Find Out Customers Who Haven’t Purchased Since Long

It is always a good idea to find out why your existing customers have not made it again to your store rather than regretting it later when they are all gone.

Once you get that data, reach out to them and ask why they haven’t shown up for long, or is there something that is bothering them from making the purchase again?

Make an emotional connection, tell them that you miss them. And if they have decided to part ways, tell them that you would love to see them back. The relationship should end on a high note.

Personalized Emails

You should also often conduct surveys to know what your customers feel about your brand, products, or services. And this is important to know beforehand so that you can work upon those issues.

This customer retention strategy will definitely help you improve your customer retention rate.

5. Enhance Your Customer Support

One of the most important customer retention strategies is to provide a quality support service to your customers. Quality customer support has a huge role to play in a successful consumer-brand relationship.

You can never grow as a brand if you fail to resolve your customers’ queries. I mean how awful it would be if customers put their trust in your brand but cannot reach out to you for a quick resolution when needed. This way, customers would always remain unsatisfied and will likely stop shopping from your brand.

Customer Support

If you do not want to lose your customers to your competitors, provide them with a quick response, be it via live chat, email, customer support number, or social media. Listen to their queries and sort out their problems as soon as possible.

A high-quality customer support service is the best way to win your customer’s trust and improve customer satisfaction. It is then only a matter of a few minutes to see a frustrated customer turning into a happy and satisfied customer.

6. Connect with customers on Social Media

Social media sites like Facebook, Instagram, Twitter, and LinkedIn are some of the best platforms to connect with your audience and build customer relationships. They give you access to communicate with your followers in a friendly manner unlike emails or chat where you have to be professional all the time.

Perform some activities to engage with your customers. Keep up the excitement about your brand.

7. Collect Customer Feedback

Even if you do everything right, there will be some customers who will leave and would no longer like to be a part of your business. For such customers, it is important that you know what made them leave your brand.

To improve customer retention, you should ask for customer feedback so that if such a problem exists as defined by the customer, you can work on it and avoid losing further customers.

Why is Customer Retention Important?

Customer retention tells you how good you are at retaining existing customers. You might be having a good customer acquisition rate but if there is a major difference between the acquisition and retention rate, it means you are not able to get hold of your customers for a longer period. And this is why customer retention is important so that you get an idea about the areas that you are lacking to retain them.

Final Thoughts

While it is important to acquire new customers, not turning away the interest of the existing customers is essential too. The latter holds more potential for your business.

You might discover some other strategies for customer retention, however, I find these 7 customer retention strategies to be the most helpful and effective to improve customer retention rate. Once you get a clear idea of how to retain customers, you will be able to deal with this issue quite conveniently.

Right customer retention strategies provide a number of benefits to your eCommerce business, including improved Brand Loyalty, Customer Loyalty, Customer Acquisition, Brand Relationship, etc.

Just be honest with your customers and stand by your promises. That’s it for customer retention management.

If you find this information useful, do leave a comment below. What customer retention strategies have you implemented for your business? What has been your success rate?

Joe Parker

We boast of the best in the industry plugins for eCommerce systems and has years of experience working with eCommerce websites. We provide best plugins for platforms like - Magento, Prestashop, OpenCart and Shopify . We also provide custom module development and customization services for the website and modules..

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