Customer Retention cartoon

7 Ways to Delight and Retain Your Customers

Did you know that it can cost up to 25x more for a business to acquire a new customer, than to retain an old customer? Not only that, repeat customers spend up to 67 percent more than new customers. Both customer retention and customer loyalty are incredibly important for the long-term success of a business.

Did you know that it can cost up to 25x more for a business to acquire a new customer, than to retain an old customer? Not only that, repeat customers spend up to 67 percent more than new customers. Both customer retention and customer loyalty are incredibly important for the long-term success of a business so in this post we will be looking at ways to not only delight but also retain your customers.

Customer Retention

Let’s delve into the meaning of customer retention and why it is so important.  Customer retention is the ability of a company to retain its customers over a longer period. High customer retention means customers tend to return, continue to buy and typically do not switch to another product or business. 

Customer retention begins with the very first contact an organization has with a customer and continues throughout the entire lifetime of the relationship. A company’s ability to attract and retain new customers is related not only to its product or services. It is also related to the way it services its existing customers, the value the customers actually generate as a result of utilizing the company’s products or solutions, and the service reputation the company creates across the marketplace.

“Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them” 

– Kevin Stirtz

Successful customer retention involves more than just giving the customer what they expect. Generating loyal advocates of a brand entails delighting customers by exceeding their expectations.

Customer Retention Measurement

CRR or Customer retention rate is the percentage of customers a company keeps relative to the number it had at the start of a specific period. This does not count new customers.

There are three pieces of information you need to calculate customer retention:

Number of customers at the end of a period (E)

Number of new customers acquired during that period (N)

Number of customers at the start of that period (S)

Customer Retention Rate = ((E-N)/S) *100

We are interested in the number of customers remaining at the end of the period without counting the number of new customers acquired. Remaining customers can be calculated by subtracting N from E. To calculate the percentage, we divide that number by the total number of customers at the start and multiply by 100. For example, if you had 100 customers at the start of the year and earned 20 new customers but lost 10 customers by the end of the year, your customer retention rate would be 90%.

While CRR seems to be a very simple calculation, it has tremendous value. Management might argue that revenue and bottom line are more important and that it’s ok to lose a few customers along the way. However, let’s think about the cost of acquiring new customers. CAC stands for “customer acquisition cost” A company’s CAC is the total sales and marketing cost required to earn a new customer over a specific time period. CAC = Cost of Sales and Marketing divided by the Number of New Customers Acquired.

Here are some great numbers that were put together by Invesp, who conducted a survey:

  • Acquiring a new customer is five times as expensive as retaining an existing customer
  • 44% of businesses admit they have a greater focus on acquisition, while only 18% focus on retention (the rest claim to have an equal focus).
  • 89% of businesses see customer experience as a key factor in driving customer loyalty and retention.
  • The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
  • Increasing customer retention rates by 5% increases profits by 25-95%

To continue growing, a business not only needs to make up for every customer lost, but needs to keep finding new customers. So, they would in fact save money by increasing or at least maintaining their CRR.

CRR also provides an indication of how loyal a company’s customers are, which in turn reveals how good their customer service is. By tracking CRR, we can explore ways to improve these areas of the business.

Ideally, as a business, you would like your CRR to reach 100%, which means that you never lose a single customer. That’s highly improbable. A realistic goal is 90% or at the very least 85%, however this will vary from business to business and from sector to sector.  Regardless of your business type, business size or sector, it is important to track your own rate and try and improve upon it every month.

Customer Retention Program

How do you create a customer retention strategy that not only retains your current customers but keeps them engaged and happy? Some of the biggest brands (Apple, Amazon, Google, etc) have created and implemented successful customer retention programs to achieve this.


A customer retention program is a business strategy that aims to retain as many customers as possible and improves customer relationships. From emphasizing convenience to providing education to creating a more personalized experience, these programs have very important features that any customer success team can begin to take and test right away.

As we might expect, there are many ways to and examples of how to retain customers. Providing exceptional, personalized service is of course at the top of the list, but we have taken and distilled what we consider to be the most important aspects of a customer retention program in the customer service sector.

1. Exceptional, Personalized Service

This may seem obvious but many customers place as much value on the quality of our service – friendliness, comfort, and familiarity – as they do on the quality of a product. Remember that 70% of buying experiences are based on how the customer feels they are being treated. Make your business a friendly and accommodating partner in your customers’ eyes. Recognize loyal customers by name. Show appreciation with personalized gifts, coupons, special offers, sneak previews or thank you notes. Invite them to special events or ask for feedback to let them know that you value their opinions.

Customer service represents the heart of a brand in the hearts of its customers 

– Kate Nasser

2. Communication

First and foremost, in this digital age it is of paramount importance to make web assets and social media channels consistent, so customers can connect and get the help they need across a variety of channels.

  • Email Communication: When a customer shares their email address with you, they know they are opting into staying in touch with your company. It’s a strong sign that they already feel positive towards your brand. This is your cue to build the relationship! You will keep them on board over a longer period by being a regular presence in their inbox.  Not only that, email marketing is a relatively low-cost way to nurture and improve customer retention. This doesn’t mean only sending out generic marketing announcements. For best results, use your CRM data to personalize emails to loyal customers and celebrate their relationship with your brand. Try a birthday discount code, or a message that lets them know they’ve been shopping with you for a year (or more) and make sure to repeatedly thank them for their business.
  • Frequent communication is key as it keeps you fresh in a customer’s mind and lets you pass along important information. Alert your customers to promotions, rewards programs, product updates and any other content you think they’ll find interesting and relevant.
  • Encourage interaction with your brand. Ask people to share their stories or hold contests on social media to amplify engagement.
  • Stay a step ahead. If you haven’t heard from particular customers in a while, don’t be afraid to reach out to them. Even if your efforts don’t result in immediate sales, they’ll go a long way toward keeping your brand first in your customers’ minds.

3. Helpful Education Programs

A free or low-cost customer education program demonstrates a long-term investment in your customer base. Under this initiative, your business creates a variety of tools such as an online knowledge base, a library of free media and e-books, list of recommended reading, self-service tools and a community forum such as a Facebook or LinkedIn group. Customers can take advantage of these free resources to get answers or solutions before having to reach out to your support team. 

You can also curate and present content by experts or public figures in your sector, in the form of a guest blog, hosted webinar or podcast – which demonstrates that we want to provide a variety of content that is not only interesting and meaningful but also helpful to customers.

4. Ask for Feedback

Make sure to ask for customer feedback on a regular basis. Being able to identify and address any issues as early as possible will help you to prevent customers from leaving. Whether you use a customer survey in an email, after a transaction or simply asking about their experience, surveying customers and doing it consistently will help you identify trends and proactively solve problems — before customers leave you for your competitors.

5. Celebrate Achievements or Successes

According to research, people remember negative events more vividly than positive ones. It is important to create better, more memorable experiences around positives and successes.  When something truly great happens, how much of an emphasis do you place on the outcome or event? Now is the time to put a plan in place to help customers remember!

6. Perks

One of the best ways to retain customers and encourage loyalty is to give extra perks to your most dependable customers. Whether it’s the ability to skip the line, special meet-and-greets, immediate seating, or give them special co-marketing opportunities, customers love getting a little something extra.

By setting up a reward system for the most loyal, you not only encourage them to stick around, you also give an incentive for other customers to strive to reach that status.

7. Reciprocity

Reciprocity is a genuine way to increase loyalty. Simple gestures and acts of kindness can go a long way. There are two kinds of reciprocity: surprise reciprocity and trumpeted reciprocity. Both can be used to retain customers. 

Surprise reciprocity could be a surprise gift or token of appreciation. An example of this would be sending a customer a surprise gift or free tickets to a company event.

Trumpeted reciprocity is when the giving is done in such a way that it reveals that the giver is going above and beyond. It’s ok to make this obvious to the customer. When what we are doing is outside the normal scope of work, make sure your customer is made aware of it. An example of this would be giving the customer early access to a new product or letting them use a new feature for free.

There are plenty of other examples of how to build and sustain relationships with customers, and this will vary according to your specific business or sector.

Any business, large or small, should invest equally in customer acquisition and retention. This will not only help grow a brand; it will ensure a company’s longevity and success.

Related Articles:

Defining Service Excellence 

The Customer Journey

Customer Feedback: Your Key to Service Excellence 

Customer Service and Your Company’s Online Reputation

Emotional Intelligence in the Age of Automation


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Customer Service Institute of America