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8 powerful strategies to boost customer retention

Acquiring new customers can be challenging—and often expensive—so once someone makes a purchase, it makes sense that you’d work as hard as possible to keep their business. 

Customer retention is easier said than done, though. A crowded marketplace means customers continually face new buying options. It’s up to you to try new engagement techniques to keep your company top of mind for current customers.

Last updated

15 Aug 2023

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6 min

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This guide walks you through eight strategies to improve customer retention, with examples of companies that get it right, and actionable tips to retain engaged and loyal customers.

Get the insights you need to improve customer retention

Use Hotjar’s tools to learn how to engage your customers and create a sense of loyalty

8 strategies to improve customer retention

Customer retention measures how many of your customers stay with you after their initial purchase. By retaining customers, you can improve metrics like purchase frequency (how often a customer comes back to buy something) and repeat customer rate (the percentage of customers who have purchased from you more than once). 

Improved customer retention typically means an improved bottom line. But perhaps even better than that, working to improve customer retention rates yields happy, delighted customers with a positive impression of your brand. 

Use these eight techniques to improve customer retention rates and show your customers you care.

1. Get to know your customers

You need a solid understanding of customers to know how to serve them. Research is the first step in figuring out their desires, pain points, and successes, and developing user empathy.

Quantitative and qualitative research can work hand in hand here to learn user behavior, and the causes and motivations of that behavior. 

To better understand their customers—and improve the customer experience (CX)—online greeting cards retailer Moonpig.com uses Hotjar Surveys:

#Ecommerce card shop Moonpig.com uses on-page surveys to determine their customers’ needs
Ecommerce card shop Moonpig.com uses on-page surveys to determine their customers’ needs

Customer insights from sources like surveys can show you what you’re doing well and how you can improve, reducing churn and increasing retention.

2. Optimize and personalize experiences

Users today expect personalized experiences at each stage of their journey. The good news is that if you’ve put in the effort to get to know your users, this part will be easy—and even fun. 

Consider what your customer needs to have a smooth journey from Point A to Point Buy. 🤭 A seamless user interface design goes a long way toward optimizing the user experience (UX), and a consistently pleasant, personalized product experience (PX) helps prevent churn. Each interaction customers have with your brand and product helps shape your customer retention rate.

Online health-conscious grocer ThriveMarket finished first in the 2022 Retail Personalization Index due to its customer-centric attention to detail. The company uses an onboarding quiz and progressive profiling to create personalized shopping experiences—and loyal customers:

#ThriveMarket.com offers an onboarding quiz to customize the shopping experience
ThriveMarket.com offers an onboarding quiz to customize the shopping experience

Optimizing and personalizing experiences on your site and across all other communications (like email, social media, and call centers) shows you care and boosts customer delight. And customers who feel valued are more likely to stick around for the long haul.

3. Engage through email

Sending welcome emails can encourage prospects to make an initial purchase. But a well-executed nurture sequence can keep them coming back for more. 

Take Grammarly, for example. The grammar-checking software not only sends out emails with writing and proofreading tips, but also delivers personalized emails with users’ productivity stats and achievements. Badges are unlocked after a set number of weeks of activity, gamifying the app and creating a sense of commitment to the platform—you don’t want to break your streak!

#Grammarly.com gives users incentive to open their emails and continue using their product
Grammarly.com gives users incentive to open their emails and continue using their product

Personalized and timely emails help you connect with customers to increase loyalty and give them ideas of how to use your product consistently—or why they should upgrade to enhance their experience.

4. Improve customer service and support 

If there’s an issue, customers want to contact you right away—in a way that’s convenient to them. If it’s easy for them to get their issue resolved, you’ll likely gain a customer for life. 

Make sure customers can contact you through multiple channels—live chat and chatbots, a call center, email, and even social platforms. 

Shopify.com, for example, has built a loyal fan base through customer service and support. The online ecommerce platform has a help center for users who prefer self-service, community forums, and traditional contact options like email and live chat. 

Where Shopify really shines though is on social media. The company, which has nearly 400k followers on Twitter, responds in its fun brand voice to questions and comments:

#Shopify actively responds to customers on Twitter to provide encouragement and make connections
Shopify actively responds to customers on Twitter to provide encouragement and make connections

Creating a helpful and nurturing online persona helps build trust and empathy that keeps customers coming back to you—they know you’ll take care of them.

5. Create a loyalty program

Loyalty or rewards programs use incentives like discounts and prizes to encourage customers to continue shopping with you. 

While well-known in the retail world (grocery stores, beauty retailers, and clothing stores all commonly offer these programs), SaaS companies are also hopping aboard the rewards train. 

Gusto, cloud software for payroll and human resources, offers you a $300 gift card if you refer someone who signs up and runs payroll at least once through the system. The person you refer gets a $100 gift card of their own, too.

#Gusto encourages engagement and retention by rewarding loyal customers who share their product—a technique that also boosts acquisition
Gusto encourages engagement and retention by rewarding loyal customers who share their product—a technique that also boosts acquisition

Loyalty and rewards programs are a win-win: customers get bonuses and incentives, and you get a higher repeat customer rate.

6. Build dedicated communities

Communities, forums, and message boards serve a practical purpose: customers can get their questions answered without having to turn to your help or call center. But these venues also provide a feeling of unity that boosts retention rates.

SaaS company Figma, a collaborative tool for interface design, does togetherness well. The brand offers a robust community platform where users can ask questions, make connections, and get inspiration:

#Figma’s community members publish over 1,600 resources per day. Users want to stick around to see what else they can learn and discover.
Figma’s community members publish over 1,600 resources per day. Users want to stick around to see what else they can learn and discover.

A community leads to a feeling of belonging that customers might not get from other companies, making them loyal to yours. 

Think about your why. Building a community can be time-intensive. Consider reflecting and goal-setting before starting a community around your brand. Brainstorm ideas to the following questions: 

💡 Pro tip: building an engaged community takes effort, but it typically pays off in customer loyalty in the long run. 

Hotjar’s Head of Customer Marketing, Sarah Metcalf, says, “I have colleagues who have preferred a vendor just because of the strength of the customer community.” 

Not ready to jump into creating a large-scale discussion board or community forum? Consider putting together a Customer Advisory Board (CAB) with a select number of customers. 

“You not only get valuable feedback from customers, but customers get to feel like they have input on the product, and they often enjoy networking with other members of the CAB, a small community in and of itself,” says Sarah. 

Engagement and a feeling of involvement drive customer retention—creating users who never want to leave.

7. Encourage reviews and testimonials

Social proof—like reviews, testimonials, and case studies—help guide customers in their product choices and shape their sentiment about a brand. 

One company that rocks in this department is Slack. The communication app posts videos on Twitter of real customers sharing their favorite platform features, and has a comprehensive customer success page:

#Slack’s customer success page includes testimonials with videos and links to case studies
Slack’s customer success page includes testimonials with videos and links to case studies

Reviews and testimonials get the attention of new customers—but they also ensure that current customers stick around longer. As hype builds about a brand or product, loyal customers feel more justified in their purchasing choices, and are less likely to drop off.

8. Show your appreciation

You can show customers your gratitude in a variety of ways: thank you emails, discount codes, or customer appreciation days with site-wide sales. 

One way to leave a memorable impression is by sending hand-written notes or small gifts to loyal customers. Many of our interactions these days are digital—going tangible can help you show your attention to detail and stand out from the crowd.

#Metromile, a car insurance company, sends notes and small gifts to customers to build connections and spark delight
Metromile, a car insurance company, sends notes and small gifts to customers to build connections and spark delight

Sending notes and gifts also triggers a sense of reciprocity: you’ve given something to the customer, and they feel compelled to provide you with something—their continued business—in return.

💡 Pro tip: the more ways you can find to delight your customers, the lower your churn and the higher your retention rates will be. In other words, focus on the people you serve—the metrics will naturally follow.

Looking for new ways to spark and measure delight? We’ve got inspiration for days right here.

Select strategies that will encourage your customers to stick around 

Choosing the best customer retention techniques for your company means knowing your customers and understanding their needs. 

Once you figure out what makes your customers tick, they’ll want to buy from you again and again. Collect quantitative and qualitative data directly from your customers to see what they need to make their customer, user, and product experiences as comfortable as possible. 

By focusing on the user, you’ll create products and services that are a perfect fit, improve customer sentiment, and see customer retention soar.

Get the insights you need to improve customer retention

Use Hotjar’s tools to learn how to engage your customers and create a sense of loyalty

FAQs about customer retention strategies