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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

2 Nov 2022

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.

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Gather info from multiple sources

Eliminate guesswork by directly asking customers what they think about your product through surveys, feedback widgets, and customer interviews. Often, customers will tell you exactly what they need to remain loyal.

Time your ask carefully

Include surveys at a point where it makes sense in the customer journey. If possible, determine where they’re least likely to cause friction in the user experience.

Make a customer journey map

Use data to create a visual representation of customers’ motivations and pain points before, during, and after their purchase. A customer journey map ↓ helps you develop empathy for users and determine how to improve their experience, which can improve customer 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. đŸ€­ 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.

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Stay on a first-name basis 

A personalized approach helps users feel seen and provides a conversational touch. Remember to call customers by name when responding to social media posts, too.

Get VoC input from users

By installing a feedback widget, users can click to let you know what works and what doesn’t, in their own words (aka voice-of-the-customer, or VoC). Keeping tabs on customer sentiment can help you make informed decisions to increase customer retention.

Keep checking in 

Customer research is an ongoing process. Product discovery means continuously learning how users experience your product, and how you can improve their experience even more. This data-driven approach lets you offer the most value and delight—to continue to retain your customers.

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.

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Create engagement 

Companies benefit from showing their unique brand voice and personality through email. In your emails, include ways for customers to interact with you—by replying to a question or through a social media hashtag challenge. Building a connection with users helps them become attached to your brand.

Think about timing 

Ecommerce companies often have data on how quickly the average customer finishes a consumable product. Time your email sequences to nudge users when it’s time to re-purchase.

Educate users 

SaaS customers may not repurchase a subscription if they don’t understand a product’s full capabilities and benefits. Send emails with how-tos and links to video tutorials to encourage more product engagement and improve retention.

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.

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Be proactive

It’s easy to get sucked into putting out fires. Make sure you stay proactive about establishing rapport with customers at each touchpoint along their journey.

Use social media monitoring software 

Products like Hootsuite or Sprout Social make social listening easy, letting you respond quickly to positive or negative mentions and retain more customers.

Help customers help themselves

Often, users want help figuring out how to use your product—without having to interact with someone. Include useful resources like articles and video tutorials with a search function. Making product information easily accessible increases product engagement—which promotes customer retention.

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.

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Use a customer loyalty management tool

Platforms like SaaSquatch help tech and SaaS companies set up loyalty, rewards, and referral programs so you can retain customers with less stress. Smile.io does the same for ecommerce retailers.

Offer multiple ways to earn points or rewards 

Giving customers options with the loyalty program provides personalization and boosts retention. While some customers may respond well to referral bonuses, others may prefer earning points through product usage. (Don’t guess what customers want—ask them directly through interviews, feedback widgets, and surveys.)

Make it easy to opt in 

To see improved customer retention from your loyalty or rewards program, you first need existing customers to sign up. Make it easy by creating push notifications, reminders in order confirmation emails, and a notification bar at the top of your home page.

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: 

Why do you want to start a community? (For example, do you want to increase retention or solve a specific problem for your customers?)

How does the community align with your company’s goals?

How will you decide if the community is successful?

💡 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.

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Feature customer success stories

When new customers consider partnering with you, case studies can show them a glimpse into your process—and help them make an informed decision about whether your company is a good fit. By partnering with the right customers from the start, you’re likely to increase satisfaction levels, repeat customer rate, and retention.

Scatter testimonials everywhere your customers are 

Home page? Check. About page? Check. Preferred social media platforms? Check. Seeing positive reviews for your products and services creates consumer confidence and staying power.

Address negative reviews when possible 

Showing empathy for the customer experience—and making things right when possible—shows that you’re a trustworthy company that cares.

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.

Try this

Use a service to scale 

Companies like Handwrytten and IgnitePost can create and send personalized notes in ink to your specifications—saving you time and effort. 

Think about timing 

Consider where customers are in their journey and what might give them a boost along the way. A token of gratitude sent post-purchase creates delight, and a gift sent seemingly out of the blue to a long-standing client evokes surprise and an appreciative sentiment.

Reflect on your customers’ values 

Appreciation doesn’t have to mean tangible rewards and notecards. Brainstorm what your specific customers might appreciate based on their values. Providing a donation to a charitable cause, planting a tree for each item sold, or starting a ‘buy one, donate one’ campaign makes a difference—and also helps customers feel good about continuing to purchase from you.

💡 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