Updated : Apr 24, 2024
10 Mins Read

What is Customer Retention? [11 Proven Strategies]

A hand holding a magnet on a blue background, demonstrating effective customer retention strategies.

What is Customer Retention? [11 Proven Strategies]

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Customer retention is the toughest and most challenging task any business can think of. It is all about implementing the right tactic at the right time to gain your customer’s trust. It is an important thing to always put it on the priority list rather than underestimating it because a good business is all about having loyal customers who ultimately help in increasing profits in the business.

Don’t worry if you are not aware of what is “customer retention” and what strategies to apply, we have mentioned everything that you exactly should know.

Let’s explore everything in this blog!

Key Takeaway :

Customer retention is the process of implementing tactics to bring customers back to your business, gaining their trust, and holding their loyalty by providing the best customer experiences and support. It is essential for businesses to prioritize customer retention as it leads to increased profits and a loyal customer base, ultimately contributing to the success of the business.

What is Customer Retention?

Customer retention is a process or tactic that is performed to bring your customers back to your business. It restrains and carries so many processes like gaining customers’ trust and holding their loyalty by providing the best customer experiences and support.

To boost customer retention, you need to make changes in some of your businesses to recover the lost customers in months or weeks so that they can always come back to your company or brand.

Importance of Customer Retention

Building a Loyal Fan Base: Similarly, as a band loves its fanatical devotees, the business flourishes with repeat customers. These are your cheerleaders, they will talk about you far and wide. For instance, a coffee shop whose customers are regulars tends to have free advertising through word of mouth by these loyal customers.

♦︎ Cost Efficiency

It has come to analysis, that almost 82% of companies say that customer retention is cheaper than acquiring one new customer. This means that it is important to always provide the best support experience to your existing or lost customers.

It is similar to the concept of planting a garden: it’s easier to maintain plants already planted than trying to grow new seeds every season. It might cost five times more to acquire new customers than it would to retain the existing ones. 

Imagine a gym that keeps reducing membership fees for its existing clients, rather than spending fortunes on advertising and attracting new ones.

♦︎ Stable Revenue Stream:

Your regular customers are the closest thing to that steady beat of a song You can count on them for consistent and predictable revenue. To illustrate, local grocery shops’ continuous daily customers bring more money flow than random visits of infrequent buyers.

♦︎ Valuable Feedback Loop:

Loyal customers are the ones who provide sincere advice just like an honest friend. The problem is that they give useful testimonials, which can allow you to refine your items or services. For example, a software company can learn valuable insights from customers who have been with them for a long to improve their product.

♦︎ Cross-Selling Opportunities:

It is akin to having a painted canvas as the base; it can be easily just extended. This means that existing customers are more likely to make another purchase or buy extra products or services. For instance, a brand that deals with smartphones would find it easy to sell its products such as cases or earbuds to consumers who already have the handsets.

♦︎ Reduced Marketing Costs:

“Happy customers are equivalent to word-of-mouth marketers. Such nature of marketing is organic and does not require these expensive advertising campaigns. For example, regular customers of a local bakery might bring their friends; that would save money on advertising.

♦︎ Market Stability and Resilience:

Loyal customers act like strong boats that can withstand stormy seas. They protect firms in times of economic downturns or market turbulence. A classic example is loyal subscribers contributing to the stability of streaming services such as Netflix even when new entrants appear.

Increasing customer retention by only 5% can improve and increase the profits by maximum 95% and can provide almost 60% of the business.

Remember, in the world of business, your most precious treasure is a loyal customer. Stick to them, and they will assist your business in sailing smoothly on the seas of success! 🌟🚢🌊

How to calculate the customer retention rate? [Formula and solution]

Customer retention is an important metric for any business looking to measure the success of its customer service and marketing efforts. To calculate customer retention, you need to have data on how many customers you acquired in a given period, as well as the number of customers that are still active at the end of that period.

You can then calculate customer retention by subtracting the number of customers lost from the total number of customers acquired and dividing it by the total number of customers acquired. This will give you a percentage that tells you how successful your customer service and marketing efforts are at retaining customers over time. It’s important to monitor customer retention closely, as it can be a key indicator of long-term success.

The customer retention rate is the proportion of prior purchasers who stayed devoted to your firm during a certain time. To determine it, choose a duration you wish to measure and then pinpoint the following:

The Formula: ((E – N) / S) * 100 = X

  • Number of customers at the start of a given period (S)
  • Number of customers at the end of that period (E)
  • Number of new customers added throughout that period (N)
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What is customer retention? [11 proven strategies] -

11 Strategies for customer retention in your business

The journey of customer retention is like nurturing a garden – it requires care, attention, and a bit of creativity. The following 11 strategies are your tools to cultivate a thriving customer base.

Each one is designed to not only keep your customers coming back but also to turn them into enthusiastic advocates for your brand.

Let’s dive into these tactics that promise to keep your business garden blooming with loyal customers!

✅ Acquire a help desk customer support tool

A help desk customer support platform is one of the best ways to manage your customers and their queries, it becomes important that it is acquired by the small-medium scale business. There is no hassle of managing customer queries even when the customer base is grown. Features of the customer support platform help in managing your customer queries in just a few minutes.

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Provide quicker and faster customer support with help desk platform

When it comes to a customer support platform like Desku, it becomes much more important to manage the customer base from a single dashboard as you might have few support agents to handle. Multiple features help in creating the perfect tool to maintain customer queries.

Let’s understand the features of the customer support platform:

⭐️ Shared inbox for managing customer queries all together in one

⭐️ Real-time conversation with customers through live chat

⭐️ No-code chatbot builder to automate the customer conversation

⭐️ Accurate and informative knowledge base as a self-service to customers

⭐️ Customer query management from multiple channels

⭐️ Multiple integration so that you can work under one platform hassle-free

A customer support platform like Desku helps maintain the customer queries in one and ultimately helps businesses manage them hassle-free.

✅ Accept the mistakes occur by your support team

At last, we are humans and we tend to make mistakes which is understandable by anyone. There are chances of customers getting angry or offended regarding the mistake that is made. The most important thing is how you handle it. How you carry your mistakes and own up to your mistakes in front of customers is what makes customers think that they are dealing with some genuine company.

✅ Convenience customers with assurance

Customers need constant validation and assurance to maintain consistency and growing loyalty in your business. When customers contact you with their queries, it means that they expect some solid solution to build assurance in your business.

Avoid fake promises that will make your customers trust you less eventually. It is difficult to build trust, and once it is gathered there are no chances of customers going back. Providing assurance means being there for customers no matter what, customers should have your back for any queries that are created by them.

✅ Engage with your customers properly and timely

When customers interact with you, you must be there to approach back at them and find out what exact problems they are facing, understand them rather than drowning them with your thoughts. When a customer support agent is a good listener it makes a difference and helps in calming down the anger of the customer.

Considering Desku, live chat helps in connecting with customers instantly and can have conversations in real time. This will increase the confidence in the customer’s mind about expecting answers from you anytime they have any queries. Apart from this, live chat helps to decrease the ticket load of support agents. When any support agent is not available to answer the queries of customers, they can always have the support of automating the customer interaction by simply implementing the no-code chatbot builder in the live chat widget.

✅ Educate and teach your customers

When customers make a purchase, the relationship does not end. You need to constantly make your customers aware of the product or service that your business is providing which will help customers to make frequent purchases with your product or business. If there is awareness in your customer base, then there is no chance that your product or business will not have repeated customer base interactions.

✅ Multi-channel support platform

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Provide omnichannel customer support

Take an octopus as an example. Octopus is someone who can reach out to multiple things at the same time. Considering the multi-channel customer support platform, it helps various types of customers from multiple channels, hence it can solve up to multiple queries at the same time and that too from multiple channels. This simply means that customers are right there to help you with their 8 hands wherever you are.

With Desku, you can integrate multiple communication channels and have a conversation with your customers at the same time and it can be managed within one platform hassle-free.

✅ Frequent referral programs

Think of this as planting seeds of loyalty that grow into a forest of new customers. By rewarding your current customers for bringing in their friends, you’re not just expanding your customer base; you’re creating a community of brand ambassadors. It’s like hosting a party where every guest brings a friend, making the gathering bigger and better.

✅ Gratitude towards customers

Gratitude is not always about going the extra mile for customers but small gestures are one of the most important things that they can experience. Always thank them when they come to you with suggestions that they are demanding or suggesting as it is considered the help to draw your brand into customer-centric. Appreciate them when they have waited for you to get back to them, it is their patience that will help you bring accurate solutions. With the customers being so nice to you, provide them with the surprise gesture of any free plans or gift so that they know they are valued by your brand or company. These small efforts matter a lot to them.

✅ Keep things engaging with customers

This is like being the host of an ongoing, exciting conversation. Regularly update your customers with interesting news, helpful tips, or fun contests. It’s like having a coffee date where you always have something new and exciting to talk about, keeping the relationship fresh and engaging. Constantly be in touch in interactive ways but not in a way that they feel like you are spamming them. Let them know about your business roadmap, any new product or service that you are launching and the motive behind it. This will make them feel that they are part of your business.

✅ Offer solutions to customer problems

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Customer knowledge and awareness to customer problems

Sometimes, providing an accurate solution rather than an instant solution is much more important. There are chances that accurate solutions might take time to process but once you have derived, it is one of the happy and satisfied moments for customers. There are chances that you might not know initially, so be transparent with your customers. If you know that a particular problem or query will take time to solve, provide them with alternate or temporary solutions so they are not stuck anywhere.

✅ Provide personalisation to your customers

Treat each customer as a unique individual, like a tailor crafting a custom suit. Use data to understand their preferences and tailor your services or products to meet their specific needs. It’s like a chef who remembers your favourite dish and prepares it just the way you like it, making every interaction with your business a personal and delightful experience. Personalisation lets your customers know that they are special and considered an important part of your business.


In conclusion, customer retention is a key factor in the success of any business. It ensures that the customers they already have remain loyal to the company and that their products and services continue to be successful.

By implementing strategies such as personalizing customer experiences, providing rewards and discounts, building relationships with customers, offering customer support, and investing in customer experience, businesses can create long-term relationships with their customers and increase their overall retention rates.

With these 11 examples and strategies to retain customers discussed above, companies can now take steps towards building a strong customer base while maintaining existing ones.

Gaurav Nagani
Gaurav Nagani
As Founder & CEO of Desku.io, Gaurav has made a distinct mark in the customer support and ai bot field. His commitment to AI-enhanced solutions and his industry experience have been instrumental in modernizing customer service.

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