14 Proven Customer Retention Strategies to Boost repeat Business

Walt Disney has wonderfully said, “Do what you do so well that they will want to see it again and bring their friends.” Keeping customers around isn’t just important—it’s what drives real growth. The world’s top companies know this. Up to 80% of their value comes from focusing on their existing customers and building strong relationships with them.

But to be honest, holding on to customers can be tricky. Maybe they buy once and never return, or they decide to try a competitor instead. It’s frustrating, and I’ve seen how easy it is to pour all your energy into getting new customers while forgetting to focus on the ones you already have.

The good news is there are simple, proven ways to turn things around. I’ll share some of the strategies that can help you keep customers coming back and turn them into long-term supporters.

What Is Customer Retention? 

Customer retention is the ability of a business to keep its existing customers returning for more. It’s about more than just making sales—it’s about building a connection with your customers so they trust your brand and stick with it over time. When customers feel valued and understood, they’re likelier to stay loyal and keep purchasing your products or services.

Retaining customers also goes hand-in-hand with delivering a positive experience at every touchpoint, whether through excellent customer service, personalized offers, or addressing their feedback. While acquiring new customers is important, retaining the ones you already have is often more cost-effective and impactful. Loyal customers not just bring in repeat business but also recommend your brand to others, multiplying the benefits of strong retention efforts.

Importance of Customer Retention

Customer retention isn’t just another business metric—it’s the foundation for long-term success. Here are a few reasons why customer retention is important:

1. It Saves You Money: Studies show that retaining a customer is 5 to 7 times cheaper than acquiring a new one, and from my experience, it’s always the wiser investment. Your effort to keep your existing customers happy often pays off more than constantly chasing new ones.

2. Your Customers Spend More Over Time: Loyal customers tend to spend more over time. They trust your brand, are likelier to try new products or services, and even upgrade to premium offerings. This consistent revenue stream helps your business grow without high acquisition costs.

3. They’ll Spread the Word for You: Happy, long-term customers don’t just stick around—they tell others about your business. Their recommendations are invaluable because they come from a place of trust, and new customers brought in through referrals are often more loyal themselves.

4. It Keeps Competitors at Bay: Customers have plenty of options in today’s crowded market. Retaining customers means they’re less likely to look for alternatives, giving you an edge over competitors. Keeping customers loyal is easier than winning them back after they’ve left.

5. It Shows You’re Doing Something Right: Retention reflects how well you deliver value. When customers return, it’s a clear sign that your product, service, or experience meets or exceeds their expectations. On the flip side, low retention is a signal to reevaluate and improve.

6. It’s About Building Relationships: Customer retention isn’t just about sales; it’s about fostering relationships. Long-term customers become part of your brand’s journey and are more likely to engage, provide feedback, and support your growth over time.

Customer Retention Metrics You Should Consider for Success

Understanding customer retention is more than just knowing who stays—it’s about knowing why they stay and how you can have them buying from you repeatedly. Here are some key metrics and customer retention examples that help you measure retention effectively:

• Customer Retention Rate (CRR)

It’s always a good idea to track your customer retention rate and implement the best strategies to keep them happy.

How to Calculate Customer Retention Rate:

Let’s understand this better with an example:

Suppose you begin your quarter with 2000 customers. You first lose 400 but then gain 600 customers. So, track the elements mentioned below to measure the customer retention rate:

No. of customers at the end (which in our case are)= 2000 – 400 + 600 = 2200

No. of new customers (which in our case are) = 600

No. of customers at the beginning (which in our case are) = 2000

So, your CRR would be:

2200 – 600/2000 X 100 = 1800/200 X 100 = 90% CRR

• Churn Rate

Churn rate counts the percentage of customers who stop buying your productsfrom you during a specific period. A high churn rate indicates issues that need immediate attention.

How to calculate it: 

Churn Rate = (Customers lost during a period / Customers at the start of the period​) × 100

If your month started with 1,000 customers and lost 50, your churn rate would be:

Churn Rate = (50 / 1,000​) × 100 = 5%

• Repeat Customer Rate (RCR)

RCR measures the percentage of customers who make multiple purchases. It helps you understand how well you’re building loyalty among your customers.

How to calculate it: 

RCR = (Repeat customers / Total customers​) × 100

Let’s break it down with an example:

Suppose you have 1,000 customers in total, and 300 of them make more than one purchase. Here’s how you calculate the RCR:

RCR = (300 / 1,000​) × 100 = 30%

• Average Order Value (AOV)

AOV shows the average amount customers spend per order. It helps you identify opportunities to increase revenue through upselling or cross-selling strategies.

How to calculate it: 

AOV = Total earnings / Number of orders

For example, if your total earnings for the month is $50,000 from 2,000 orders:

AOV = 50,000 / 2,000​ = $25 per order

• Purchase Frequency (PF)

PF is the average number of purchases a customer makes within a specific time frame. A higher purchase frequency indicates strong customer engagement and ongoing interest in your offerings.

How to calculate it:

PF = Total purchases​ / Total customers

Suppose 400 customers made 1,000 purchases in a month. In that case, your purchase frequency is:

PF = 1,000 ​ / 400 = 2.5 purchases per customer

• Customer Lifetime Value (CLTV)

CLTV predicts the total profit a buyer will bring to your business throughout their relationship. It helps you determine how much to invest in acquisition and retention efforts.

How to calculate it: 

PF = Total purchases​ / Total customers

AOV = Total revenue / Number of orders

And, CLTV = AOV × PF × Customer lifespan

So, if your AOV is $25, your purchase frequency is 2.5, and your average customer lifespan is 3 years:

CLTV = 25 × 2.5 × 3 = $187.50

Customer Retention Examples

When it comes to keeping customers loyal, some brands just get it right. They’ve mastered the art of creating memorable experiences, building strong relationships, and making customers feel valued. From personalized perks to seamless ecosystems, these brands go above and beyond to ensure their customers stick around for the long haul. 

Here are a few customer retention examples of some of the most renowned brands worldwide:

• Netflix

Netflix keeps you hooked with two smart moves. First, their original content: think of hit shows and movies you won’t find anywhere else. It’s their way of making sure you stick around. Second, their personalized recommendations: Netflix suggests precisely what you want to watch next based on your viewing history, making it hard to leave.

• Apple

Apple is a pro at keeping customers loyal. Its ecosystem lock-in makes switching brands a pain—your iPhone, AirPods, and MacBook work seamlessly together. Plus, its brand loyalty is legendary. With sleek designs and cutting-edge features, Apple isn’t just a brand; it’s a lifestyle people don’t want to give up.

• Nike

Nike doesn’t just sell products—it makes you feel part of a community. Its Nike Membership program offers perks like early product access and personalized training plans. And its community events and challenges on social media create a sense of belonging that keeps customers coming back.

• Sephora

Sephora knows how to make customers feel special. Their Beauty Insider Program rewards you with points, exclusive events, and personalized beauty advice. And their online community is like a hangout spot for beauty lovers, where you can share tips, get inspired, and stay connected with the brand.

• Nordstrom

Nordstrom keeps it simple: amazing customer service. Hassle-free returns and personalized styling advice make shopping stress-free. Their Nordy Club loyalty program sweetens the deal with points, perks, and exclusive experiences that keep customers coming back for more.

14 Best Customer Retention Strategies to Get Happy Customers

Now that you know how to calculate the retention rate and the KPIs that matter, let’s look at the top-notch strategies for customer retention you can employ to improve the rate and make your customers happy.

1. Offer Flawless Customer Service

If you want to keep your customers happy and loyal, you must ensure that you provide them with excellent customer service. When customers reach out to you, they want to be heard and expect you to address their concerns. 

Resolving their issues in a timely manner can go a long way toward cementing a positive brand perception, promoting loyalty, and increasing the average purchase value. According to a Harvard Business Review study, customers who tweeted about brands to post complaints, questions, and comments were surveyed. Here are the results of the survey:

Although the study considers only Twitter interactions between brands and customers, the findings can easily be extrapolated to any service channel. It clearly shows that prompt service can generate goodwill among customers.

Here are some ways to use support services as a customer retention strategy:

• Use live chat tools like ProProfs Chat to offer 24×7 real-time support without long waits.
• Leverage chatbots to improve First Response Time (FTR) and enhance customer satisfaction.
• Add a ticketing system like ProProfs Helpdesk with a simple form on your website or app.
• Provide self-service options such as a knowledge base, help center, or video tutorials.
• Monitor KPIs to identify what keeps customers happy and address their concerns proactively.

CASE STUDY: BELRON uses NPS to recognize early red flags and improve its experience.

2. Establish a Strong Relationship

A strong relationship with your customers will make them want to stick with you. But, most people focus on getting new customers and how to convert them. But the thing is, if you don’t have substantial customer acquisition and retention strategies, you’re likely to lose existing customers, even if you’re getting new ones.

To build a strong relationship with your customers, you must genuinely care about their experience with your brand. You must be willing to go above and beyond and give whatever they require to be happy with your products/services. It all starts when they enter your sales funnel as a prospect. 

A robust CRM tool like BIGContacts can be invaluable for building long-lasting customer relationships. The right CRM tool provides a one-stop platform for tracking and managing your customers to avoid miscommunication and ensure an effortless experience at every point of their journey.

Here’s how:

• Stay on top of your business while boosting customer loyalty and streamlining sales.
• Segment customers and prospects to understand their preferences, needs, and challenges.
• Use targeted marketing strategies to engage effectively with each customer group in your sales funnel.

For example:

To increase the repurchase probability, you can segment high-value customers to offer personalized deals and discounts based on their purchase history. You can target new customers with free first-time SaaS product setup services or training sessions. These services foster a healthy relationship between the business and the customer and greatly promote customer retention.

3. Collect Customer Feedback Regularly

Customer feedback is an asset to stay ahead of the game and ensure you deliver the best product to your customers. Among different methods of gathering feedback, surveys are your best bet to create a continuous feedback loop. They are easy to implement, cost-effective, and provide rich insights into customer behavior and actions.

Some of the proven and most effective surveys include:

• NPS
• CSAT (Customer Satisfaction)
• CES (Customer Effort Score survey)
• UES (User Effort Score survey)
• Exit-intent survey
• Market research
• Product feedback

Surveys can help collect more than just customer feedback. They make you aware of what customers say about you and your services. That’s why it’s important to prepare a survey and add depth to it using branching logic and follow-up questions to understand the WHY.

But it doesn’t end here. 

You need to analyze and act quickly to close the loop. Advanced survey tools like Qualaroo let you design surveys, collect feedback, and analyze them in one place. 

With AI sentiment analysis and NPS score tracking, you can uncover real-time insights to make informed decisions.

4. Offer Post-Purchase Services

Acquiring customers is only half the battle. You need to extend the services post-purchase to make them feel they’re getting more value from their investment. Here are a few examples of customer retention strategies to understand how you can make it happen:

• Offer free consultations or periodic quality checks to add value post-purchase.
• Provide product or service upgrades and address any questions they may have.
• Set up systems to follow up and maintain relationships with your customers.
• Filter and organize client emails to ensure no important communication is missed.
• Make returns and exchanges hassle-free to enhance customer satisfaction.
• Simplify refund or exchange processes to avoid frustrating your customers.

New visitors or customers are more hesitant to purchase from a new brand because they have no experience with the return or exchange process. One way to combat such reservations is to clearly state the return & exchange policies on your website or the product page. 

One good example of customer retention strategies is how Amazon clearly states its return policy under the product feature list, which makes the buyer experience smooth. 

Old brand or new, it’s also important to make it easy to contact your returns department. 

The more friction you put into buying and returning products, the fewer people will purchase them. So, mentioning a return & refund policy on the website or product page can help retain your customers and prevent chargebacks.

5. Engage in Customer Loyalty Programs

Implementing a customer loyalty program is another great strategy for attracting repeat customers. A loyalty program is an initiative that rewards repeat customers with redeemable points on subsequent purchases. The reward encourages them to continue buying from you and refer you to others to earn more points.

For example, if you have a restaurant, you can give loyalty points every time they buy certain meals or drinks — just like Starbucks.

You could also offer special discounts to repeat customers or special perks to VIP customers. Many companies offer special deals on customers’ birthdays or anniversaries, which is also a way to gather interesting data about your customers.

The key is to give your customers something they want. As a customer, earning rewards for using a certain product or service is a great way to feel more connected to a brand.

6. Introduce Gamification to Your Customer Loyalty Program

Over the years, loyalty programs have moved from simply rewarding purchases with points or coupons to offering more interesting features. Gamification applies game features in rewarding customers, typically to promote customer engagement with a product or service.

Some examples are the prize wheel, quizzes, exclusive club memberships, and so on.

Gamifying your loyalty program incentivizes consumers to purchase more frequently, buy more, or earn points. Another advantage of gamified quizzes is that they let you collect demographic and behavioral data about your customers.

You can design a scored personality test and reward the customers with personalized results sent to their email addresses. With a simple quiz, you can collect insights about your audience and capture their email address for retargeting campaigns.

Not only this, but you can also use the data from quizzes meant for product recommendations to provide better purchase options that customers find relevant every time. And who doesn’t enjoy getting the right options when planning to buy something? Throw in a small discount code, and you’ve also enticed the respondents to make a purchase.

7. Address Customer Complaints 

It’s important to invest in customer happiness, as it helps you measure customer loyalty, reduce customer churn, and increase revenue. If a customer complains about a flaw in your product or service, there’s a good chance they’ll tell other people about it. So, it’s paramount to address customer complaints as quickly as possible, and you need an omnichannel approach to address the complaints and fix the problem.

Integrate live chat with the helpdesk to automate ticket creation after the chat ends.

Use tools like Hootsuite to monitor the comments, complaints, and brand mentions on social channels. You can check how Hootsuite leveraged Qualaroo surveys to improve their landing page.

Another way to improve their experience with your brand is to act on their concerns and comments proactively. Keep your customers informed about the ticket’s status and use surveys to gauge their satisfaction once you resolve the complaint. Try to respond to the complaints, fix the problem, and show the customer how much you care about their experience.

What’s more, be empathetic, offer reasonable solutions to problems, and always act in the best interest of your customers. Address the complaint immediately and be open and honest about what happened. If you don’t address it, it will come back again and again. 

8. Under-Promise & Overdeliver

Companies often let their excitement get the best of them and end up over-promising their customers. And while those big promises might sound great upfront, they can quickly backfire if you can’t deliver. When customers feel let down, they’re out the door—taking their loyalty and dollars with them. 

And, honestly, bringing them back isn’t easy (or cheap).

Here’s the thing: over-delivering is what keeps customers loyal, not over-promising. Instead of making promises you’re not 100% sure you can keep, focus on setting expectations you know you can meet—and then go above and beyond to exceed them. It doesn’t have to be anything extravagant. Even small things like faster service, thoughtful follow-ups, or an unexpected perk can leave a lasting impression.

The goal is to surprise customers in a genuine and valuable way. When you consistently deliver more than what’s promised, you create trust, which keeps customers with you for the longer run. So, don’t set yourself up for disappointment by aiming too high. Promise what you can deliver, and then give a little more. That’s how you turn happy customers into loyal ones.

9. Provide a Personalized Experience

There are significant positive effects of experience personalization, as shown in the image below:

Customized experiences must be key to your customer retention strategies. It means you’ll need to ask customers what they want, listen to their feedback, and use that feedback to tailor their experience. It’s also important to work out your customer’s journey, where they drop off, and what you can do to improve that experience. 

One way to do that is by using data. Here are some ways to do it:

• Map your customers’ purchase journey to identify drop-off points and improve their experience.
• Use behavioral tools like heatmaps and session recordings for actionable insights.
• Integrate Qualaroo with SessionCam to gain deeper insights into user behavior.
• Collect customer feedback through surveys to understand preferences and refine offerings.
• Send personalized notifications to re-engage customers and encourage purchases.

Using customer data and behavior insights, you can design the ultimate personalized experience for each customer according to their tastes and preferences. Examples of personalization include sending customized emails, deals, recommendations based on individual preference, etc.

Here’s another example of a personalized experience:

Spotify’s playlist customization is a masterclass in customer retention. By tailoring the music experience to individual preferences, Spotify retains its users brilliantly. From a retention standpoint, this customization goes beyond convenience—it creates stickiness. Customers are less likely to go to competitors when they know Spotify already “gets” their music taste.  

10. Automate Customer Engagement

If you’re drowning in repetitive tasks, it is time to automate. Marketing and experience automation takes the boring stuff off your plate, letting you target your customers without spending hours on manual work. It frees you up to focus on what really matters—growing your business and keeping customers happy.

It also makes sure your brand stays top-of-mind for your customers. Whether it’s a friendly email, a quick reminder, or a follow-up on an abandoned cart, automation lets you do it all without lifting a finger every time.

The best part? You can track and engage with customers without spending your whole day on one-off tasks. It’s an easy way to stay connected, keep things running smoothly, and make every interaction count.

Here’s how automation works to improve customer retention and engagement:

• Use chatbots to auto-initiate chats, redirect to agents, schedule meetings, or create tickets.
• Automate workflows and client management with a CRM like BIGContacts.
• Run drip campaigns to nurture leads and retarget customers automatically.
• Offer personalized product suggestions using recommendation engines.

11. Ace Your Onboarding

Without a good onboarding process, your customers might feel lost and unsure what to do next. This is one of the biggest UX mistakes companies make, and it almost always leads to higher churn. 

That’s why onboarding should be a big part of your customer success strategy. It’s your chance to help new customers get comfortable with your product, show them how to use it, and ensure they see the value right away. Customers who feel confident about what they’re getting are much more likely to stick around.

For example, customers might figure out the easy processes on their own, but the more complex features? Those need your help. Whether it’s through a quick tutorial, a guided walkthrough, or even a checklist, showing them how to use your product correctly makes a big difference. It helps them get the most out of your offerings, which encourages them to come back again.

Onboarding isn’t just a formality—it’s your first chance to show customers you’ve got their back. And they’ll be much more likely to stick with you when you do that.

12. Choose the Right Customer Retention Tools

Getting the right tech stack is critical if you want your retention efforts to succeed. It’s not just about having tools—it’s about having the right tools to simplify workflows, gather actionable insights, and strengthen your connection with customers. Retention is a multifaceted process; without the right support, even the best strategies can fall flat.

For starters, you need tools that help you understand your customers better. Qualaroo, for instance, is perfect for collecting real-time customer feedback. With its Nudges™, you can ask targeted questions at the right moments to uncover what your customers really think and need. These insights allow you to tweak your offerings, improve experiences, and keep customers engaged.

Next, tools like Zendesk are essential for customer support. A smooth help desk system ensures quick responses to customer queries, a significant factor in building trust and loyalty. MailChimp takes care of email automation for communication and engagement, helping you send personalized messages and reminders without manual effort. 

And for understanding how customers interact with your website or app, Heap.io offers powerful customer behavior analytics, giving you a clearer picture of what’s working and what’s not. To choose the right stack for your business, you can refer to our detailed list of the top 10 customer retention tools, including their features, pros, cons, and more.

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13.  Invest in Employee Training and Empowerment

Your employees are your brand’s face. They’re often the first people your customers interact with, and those interactions can make or break the experience. That’s why it’s so important to invest in their training and give them the tools they need to provide top-notch customer service.

It shows when your team knows your products inside out and has the skills to handle customer needs confidently. Customers notice when they’re being heard and helped by someone who knows what they’re doing. It’s not just about solving problems—it’s about creating a positive experience that keeps them returning.

Empowering your employees to take action, like resolving issues quickly or offering a goodwill gesture when needed, makes all the difference. It builds trust—not just between you and your customers but also between you and your team. When employees feel supported, they go above and beyond to make customers happy.

Here’s how to empower your employees:

• Train your staff to handle customer inquiries efficiently and confidently.
• Empower employees to resolve issues independently without unnecessary red tape.
• Encourage a focus on customer satisfaction and going the extra mile for a positive experience.
• Recognize and reward employees who excel in delivering exceptional service.

14. Leverage Storytelling

People connect with stories because they resonate on a deeper, more emotional level than facts and figures ever could. Sharing authentic stories about your brand, customers is one of the most incredible ways to create that connection. When people see real experiences and relatable moments, they don’t just view your brand as a business—they see it as something human, something they can trust and relate to.

Sharing how your brand started, the challenges you’ve faced, or the values that drive your team can inspire customers and make your business more memorable. These aren’t just testimonials—they’re proof of your impact and help other customers see themselves in those stories.

Here’s how to use storytelling for customer retention:

• Share your brand’s story, mission, and values to build a deeper connection with customers.
• Highlight real success stories where your product or service solved challenges or achieved goals.
• Humanize your brand by showcasing the people behind your company and their commitment to customers.
• Use visuals like images, videos, and interactive content to make your stories more engaging.

TOMS Shoes effectively uses storytelling to highlight its commitment to social responsibility. It shares stories about how its “One for One” business model helps provide shoes, clean water, and other resources to people in need.

When Should You Focus On Customer Retention?

Customer retention is always important, but there are certain times when it becomes absolutely critical to focus on keeping the customers you already have. These moments can make or break your ability to sustain growth, build loyalty, and stay ahead in the market. 

Here are a few times when you should consider keeping your existing customers even happier:

1. When Acquisition Costs Are High: If your acquisition costs are skyrocketing, it’s a clear sign to shift your priorities. It is a known fact that acquiring new customers will almost always be more expensive than retaining existing ones, and when those costs keep climbing, it just makes more sense to focus on the ones already in your corner. Start by comparing your customer acquisition cost (CAC) to your customer lifetime value (CLTV). If CAC overtakes CLTV, it’s time to double down on retention strategies.

2. When You Have a High Churn Rate: If you’re losing customers faster than you can replace them, you’ve got a problem that needs immediate attention. High churn rates usually mean your product, service, or overall experience is off. This isn’t just about lost revenue—it’s about saving your reputation before unhappy customers spread the word. Analyze feedback, track customer behavior, and implement changes to fix the root cause.

3. When Launching a New Product or Service: Don’t forget your existing customers when rolling out a new product or service. They’re more likely to trust your latest offerings and give you honest feedback. Plus, they can become your best advocates, helping you get the word out. Offering early access or special perks shows them they’re valued and increases their chances of sticking around long-term.

4. When You Want to Build a Strong Brand Reputation: Loyal customers are your greatest asset when it comes to reputation. They leave glowing reviews, recommend you to friends, and share their positive experiences. By focusing on retention, you’re not just keeping customers—you’re creating brand ambassadors who boost your reputation and attract new ones.

5. When You Want Sustainable Growth: Customer retention is the cornerstone of sustainable growth. Loyal customers provide consistent revenue and contribute to long-term profitability. Relying solely on new acquisitions isn’t sustainable forever, so investing in retention builds a stable foundation for your business.

Keep Your Customers Close for Repeat Business

Loyal customers are the foundation of sustainable growth, helping you reduce costs, boost revenue, and strengthen your brand’s reputation. No matter if it’s tackling high churn rates, optimizing your onboarding process, or delivering exceptional service, every effort you make to keep your customers engaged pays off in the long run.

With tools like Qualaroo, retaining customers becomes even more manageable. Collecting real-time feedback through targeted Nudges™ lets you identify exactly what your customers need and make data-driven decisions to enhance their experience.

Remember, it’s far easier and more rewarding to nurture the customers you already have than to chase new ones constantly. Ready to take your retention efforts to the next level? Start building those connections today with Qualaroo, and watch your business thrive!

Learn More About Customer Retention Strategies

What are the key factors in customer retention?

The key factors for customer retention include delivering excellent customer service, creating personalized experiences, building strong relationships, implementing loyalty programs, and maintaining consistent communication. These elements work together to keep customers engaged, satisfied, and loyal to your brand.

How do you improve customer retention?

You can improve customer retention by consistently exceeding expectations, proactively addressing concerns, gathering meaningful feedback, and continuously refining your products or services. These steps ensure customers feel valued and have them coming back for more.

What are customer retention strategies?

Retention strategies focus on loyalty programs, personalized communication, community building, user-generated content, and proactive customer support. These help create meaningful connections and foster long-term customer loyalty.

What are the 3 R's of customer retention?

The 3 R's are:

• Reward: Recognize and reward loyal customers.
• Reduce churn: Identify and address reasons for customer loss.
• Relationship building: Cultivate strong relationships with customers.