Simple Customer Retention Strategies for Your Startup

Jake Wengroff


Customer retention — the ability to hold on to a customer and ensure that they keep buying from you — can be a more valuable strategy than customer acquisition, or the process of attracting and converting a new customer. This is based on costs. According to Oberlo, the cost to acquire a customer can range anywhere from five to twenty-five times more than that to retain a customer.

Benefits of Customer Retention Strategies

Aside from lower costs, are there other reasons to implement customer retention strategies? Let’s have a look at a few.

  • Profitability: If you’re spending less to have that same customer continue to purchase from you, you are most likely increasing profitability. 
  • Marketing: A customer who purchases again might do some of your advertising and marketing for you, by sharing photos, reviews and positive word-of-mouth both online and in-person. 
  • Product development: By building relationships with your customers, you can seek feedback, which could be valuable in helping you make changes to your products and services.
  • Research: Loyal customers could make for a great test group, as they are most likely more willing to try out or experiment with your new products or services before you launch them to the general public. 
  • Fewer issues: Mistakes happen, but returning customers who already trust your products and services are more likely to forgive a mistake should it occur in the future. This reduces strain on your customer care operations.

6 Simple Customer Retention Strategies

Consider the following strategies in order to jumpstart your efforts to implement customer retention. Some might seem so seemingly simple, but a little goes a long way.

Create a loyalty program

This is perhaps usually the fallback strategy when businesses of all sizes think about ways to hold on to customers and ensure that they return and buy more. Loyalty programs usually entail discounts on future purchases or free products. While some think that they only serve to cheapen a brand’s value, customers across many product segments have come to expect some sort of couponing from companies, so it’s important to incorporate this strategy into your sales and marketing mix.

Create contests and engagement programs

Social media has made it easy for companies of all sizes to launch promotions and contests that engage customers. These could be photo contests, funny stories and other content that truly serves to not only retain customers but carry out important content and social media marketing programs. Contests might seem perfect for consumer or entertainment brands, but even B2B and professional services firms will use some type of contest to get users excited and engaged with a brand.

Respond to complaints

Public complaints, such as those left on a Facebook Page, should never be deleted. Addressing an issue promptly and offering to provide a solution goes a long way to engender trust in your company’s products and brand. You will never be able to please every customer, but for some who feel that they are treated fairly and honestly, they will consider buying from you again.

Use personalized emails and social media messages

Customers have become tone-deaf to mass emails and auto-generated messages. To truly stand out and win a customer’s loyalty, send a personalized email or social media message to a customer without using a template or autoresponder. The message doesn’t necessarily have to come from the CEO, but customers will take notice of the “handwritten” message and respond favorably.

Increase purchasing and delivery options

While the process of developing new products and services might be lengthy and difficult, adding more options to the purchasing experience can provide a quick fix to garner more loyalty. For example, adding another payment method, such as PayPal, to the checkout experience, will make customers happier and hopefully more loyal.

Be authentic

Further to the discussion of personalization, be authentic. If an order is late or damaged, or there were other issues, explain the problem in an authentic manner without using corporate doublespeak. Customers will be thankful that their voice was heard.

Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce, and IoT.