How to improve customer retention for happy customers

customer retention

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Customer retention is one of the most crucial parameters for any brands’ sales.

Even if percentages and numbers can slightly change, acquiring a new customer is way more expensive and time-consuming than retaining an existing one.

Keeping your customers, especially the more profitable ones, happy and satisfied is one of the most important goals your brand can achieve.

How can you improve your customer retention and make more profitable sales?

We are here to help you with a couple of suggestions.

Why is customer retention valuable for brands?

Before digging into the best techniques to improve customer retention, let’s start from the beginning. 

What is customer retention, and why brands should consider it one of the main assets for sales?

Customer retention is the process of engaging your existing customers to keep buying your product or service.

In other words, you use your resources to make sure the people that already know you and trust you keep being your clients. They are loyal customers now, and you don’t want to lose them.

If you work well, customer retention is the confirmation of a strong relationship with your customers.

A healthy relationship could turn into more sales and recognition from customers.

However, you may wonder why you should spend your time acquiring customers that already believe in you. Wouldn’t it be more profitable if you focus on new prospects that have never heard of you before?

Well, actually, no!

Customer retention saves your money!

One of the most famous sentences that every marketing student hears when studying the subject is that “it is easier and less expensive to retain customers than acquire new ones.” It may only seem a motto for university students, but it is so much more than that – it is true.

Customer retention is five times less expensive than acquiring new customers.

the customer retention value

Moreover, if this isn’t enough, the probability of selling to an already acquired customer is at least 40% more than converting someone who never heard from you before or bought your products.

It means that brands can save money and create a loyal “fan base” of customers that will be useful to find new prospects without worrying about losing sales.

The advantages don’t end here; loyalty and retention also mean that your customers will probably spend more money on your products – about 31% more than new ones – and will be more interested in new releases.

We have said that retention is more profitable than acquisition, but the differences outweigh the obvious economic benefits.

Even if we enhance the importance of retention, it doesn’t mean that you can leave the acquisition behind. Retention and acquisition are the sides of the same coin that will make your business prosper.

Customer retention is also a way to measure the reliability of your company. A high retention rate means that your brand has become valuable and vital for your customers that you are now part of their routine and daily life.

How to determine customer retention

Now that we know why customer retention is so fundamental for brands, it is time to understand how to determine it and use it for your business.

There are several ways in which you can calculate your customer retention rate. Many variables can modify the result – the time of the year, the presence of discounts, your brand’s knowledge amongst your clients, the economic situation worldwide, and the kind of product you sell.

However, there are two values you can consider – the customer retention formula and your brand’s churn rate.

The formula is simple yet functional. You can consider it as “an illustration of how well you’re building relationships and drawing existing customers back for subsequent purchases.”

the customer retention formula

Take the number of customers at the end of the period.

Subtract those acquired during that period and divide by the number of customers at the start of the period.

In the end, multiply the result by 100 to obtain your rate.

Moreover, you can also look at your churn rate. This parameter is “a metric that measures the percentage of customers who end their relationship with a company in a particular period.”

Usually, you can measure it by month, quarter, or even year. This parameter is useful because it lets brands know how many people stopped buying from them and allows them to start wondering why.

If your goal is to keep your customers, you need to know why they leave you. Brands can understand which customers are going away, when in the year, how many and why.

Three ways to improve your customer retention

Now that we know that customer retention is one important goal for a brand, it is time to dig deeper and find out how to improve its rate.

The reasons why you should care about customer retention are endless, but we have decided to propose to you three of the most important ones. They also are easy to put into practical action.

Do you use any of them already?

Discover why your customers come back

It may seem obvious, but it is not. You have to understand why your clients keep being loyal to you and use that information to your advantage.

Probably, your first answer is: “Because they love our products” or “Because we are leaders on the market.”

It may be accurate, but try to give more substance to your thesis. A U.S. survey states that the factors that assure retention are way more – and more complex – than just lovely products.

Customers value fast shipping, fast returns – and comfortable, too -, personalization, knowledge of their needs, and desires.

You need to ask your audience the same questions: what do they value the most, and what you should improve?

Do you have a friendly, fast, and comprehensive way to return your products? Do you have an engaging communication (just in case you should)? Is your customer journey fascinating and well-functioning?

Analyze your brand to discover why your customers keep coming back. It may surprise you, and it may also be an opportunity to improve your funnel or change your assets.

Remember that if customers keep coming back, you can always make something better and make them happy. If they start to avoid your brand, it is time to hurry and worry, and it may be the manifestation of an old problem you haven’t seen in time.

Identify your personas and most loyal customers

We insist a lot on the importance of creating the perfect buyer personas. It happens for many reasons.

If you know what kind of customer you want to attract, it will be easier to study personalized marketing strategies to catch their attention.

In this process, the selection of buyer personas is crucial. As any marketer knows, trying to speak to everyone is useless.

Studying a model and creating a couple of personas will give you more information about your customers, habits, and preferences. In this part, every detail counts, from demographics to geographical position.

Data will give you the chance to engage only the people that may be interested in your products and services. It will avoid dispersion of attention, focus, and resources.

Once you have determined your ideal customers, you should focus on the most loyal customers. We are going to explain why in a few lines.

Discover, thanks to data and analysis, who your best customers are. Thanks to sentiment analysis and customer analytics, you can understand which customers talk the most about you, spend time on your website and buy your products.

And once you know, you can build their loyalty even more. For instance, you can implement a loyalty program – another simple yet powerful tool to improve customer retention. If your – already loyal – customers expect a reward, they will probably be even more eager to buy from you.

Also, do you take into account the customer behavior, right?

Connect with people and improve human relationships (even in the digital world)

The more you can connect with your customers, the more your retention will increase. 

If you want to stay on top of your customers’ minds, great products are not enough. You need to create a great connection with them.

There are several ways to do it, but the two most important are memorable customer experience and unique content pieces.

The more you share unique and exciting content, the more people may be interested in your products and become customers. 

On the other hand, if you can create a relationship with them. For example, with a superb CX, they will remember you as a caring brand they can trust.

And this is the best thing a company can achieve.


Customer retention is one of the most critical parameters for a brand.

If you handle it well, it will create a strong bond with your customers that could quickly turn into more sales.

To achieve this goal, at first, you have to know who your customers are and how they are behaving.

After this, you can implement several strategies and techniques, from loyalty programs to a better connection with them.

It is hard work, but trust us, it is worth it!

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