February 4, 2025
Keeping existing customers is often much more profitable for every business than attracting new ones.
According to a Bain & Company study, an increase in customer retention rate of as little as 5% can increase profits by up to 95%!
To achieve these results, many businesses offer significant discounts to their existing customers. This isn’t always advisable.
As Samuel Charmetant, Founder at ArtMajeur by YourArt, shares, “To keep your existing customers, you might be tempted to go the old route of offering discounts and other costly incentives to lure them back repeatedly. There’s a time and place for discounts, but there are better, less costly ways to keep your existing customers.”
In this article, you’ll learn eight sure tactics for customer retention. Let’s dive in!
One study published in the International Journal of Computer Applications shows that personalised marketing leads to a 75% Customer Retention Rate (CRR).
Considering the stats from the previously mentioned Bain study, showing that a mere 5% increase is sufficient to trigger profit growth of up to 95%, personalised marketing is a must-have marketing tactic.
“Personalisation is about more than using individual customers' names in emails, says Brooke Webber, Head of Marketing at Ninja Patches. “While this is a good practice,” she adds, “modern consumers expect this as a bare minimum. To make an impact, you’ll need to extensively research your target customer, using qualitative research methods like online research and quantitative methods like surveys.”
The data and insights from your research can be used to create tailored recommendations, content, and offers that precisely meet the audience's needs.
According to Bond, 77% of consumers say they’re likelier to stay with brands that have loyalty programs. Furthermore, 70% say they would recommend these brands to others.
Loyalty programs often involve discounts, but they don’t have to. Instead of offering discounts, you may provide other incentives like exclusive perks and rewards.
When designing your loyalty program, the key is to offer incentives that match the needs and interests of your target market.
Excellent customer service often costs very little or nothing at all, yet it has a tremendous impact on customer satisfaction and loyalty.
While there’s a lot you can do to please your customers while serving them, one of the most important elements of good customer service is ensuring that your customers can contact you easily and quickly.
One Forrester study reports that customers are 2.7 times more likely to spend more time with businesses that communicate clearly. Additionally, the same study shows that customers are 2.4 times likelier to stay loyal when their problems are solved quickly and 10 times more likely to recommend the brand to others!
As the evidence clearly shows, exceptional customer service builds trust and leads to long-term customer loyalty.
Building an active community around your brand is an excellent way to turn customers into passionate brand advocates.
According to a Higher Logic Report, 88% of consumers say that access to a community improves their customer experience.
To build a community around your brand, pick a popular social media platform with your target audience. The platform should also be suitable for creating a community.
Generally, platforms with the functionality to support groups are a good idea. A well-chosen platform will be the foundation for building a sense of shared values and keeping your audience fully engaged.
An active online community is also a great tool for market research, which can help you understand and serve your customers better.
Creating real value for your users is a sure way to build loyalty. In addition to making valuable products and helping to provide unique product features, you can also provide value by sharing useful information.
Providing valuable, informative content is a great way to position your brand as a trusted resource and enhance the customer experience. Research from Demand Metric reveals that 70% of customers feel closer to a company due to content marketing.
Consider creating content in diverse formats, such as blog articles and video content, to prevent your audience from getting bored.
If you offer a service, particularly a digital service, creating subscription and membership models can help you provide long-term value and extend the customer life cycle.
The subscription business model is proven to work, with Forbes reporting that subscription commerce will reach $1.5 trillion in 2025.
To make a subscription service appealing, you can offer special perks, such as early access to new products or exclusive content.
Want to create customers who don't just like your brand but love it? Consider treating your customers to random, thoughtful, unexpected, but meaningful gestures.
For example, you may send them personalised thank-you notes or offer complimentary upgrades on special occasions like birthdays.
This is a great way to demonstrate genuine appreciation and show customers they're more than just numbers.
Email marketing is still one of the most powerful tools for building loyal communities. To use email strategically to target your existing customers, first identify the customers you think are least likely to make another purchase using these tips:
Identify customers who are purchasing less than usual. You can segment customers based on recency, frequency, and monetary value (RFM) analysis to better understand their engagement levels.
Monitor email open rates, click-through rates, and periods of inactivity to identify customers who haven’t opened your emails in 60-90 days. You may then attempt to re-engage them with tailored content or special offers.
Understanding consumer behaviour through strategic research can help you reach out to your customers much better.
The goal should be identifying users with declining login activity or interaction rates. Track incomplete actions, such as abandoned carts or unsubmitted forms, and target these users with reminder emails or incentives to complete their actions.
You can show your customers that you truly understand their needs by talking to them in their own language, which you can learn by speaking to your existing, satisfied customers.
When you understand what features and aspects they appreciate most, you can then incorporate these insights into your emails and other content.
Keeping your existing customers is one of the most brilliant ways to increase your business's profits. The tips we shared will help you reach out to your customers in ways that truly matter without needing to offer costly discounts. For more tips on extending customer lifetime value, we recommend reading our guide to customer acquisition and retention strategies for small businesses.
