Business Magazine

The Basics of Customer Retention

Posted on the 14 September 2012 by Onlinere @onretailblog

The Basics of Customer Retention Illustration

Regular readers may remember my previous post on the basics of customer acquisition and just how important this is to our business to ensure we acquire the right customers the right way at the best possible cost. Well, customer acquisition and customer retention go hand in hand – you’ve acquired your customers, so how do you keep them, so to speak?

Brand Values

First and foremost, in order to retain your customers they need to feel that your brand has the following key values: trust, consistency, reassurance, quality and is personable. When your brand stands tall in these values, customers will feel confident in shopping with you and more importantly, repeat purchasing with you. When a customer has confidence in a brand it increases the customers’ loyalty – having a positive customer experience, being able to trust the brand to continue to deliver on their promise, and feeling valued are all important to the customer.

Customer Service Is At The Heart

If you only remember one thing from this blog post, remember that Customer Service is KEY to retention! Your Customer Service team should be the heart of your business. They are your front line and your customers’ first point of call. It’s important for the customer to feel valued and cared for and therefore feeling looked after and appreciated should ultimately lead to repeat custom. Show them you care, even with complaints, and a customer is likely to return. Remember, happy customers are loyal customers.

Data Is Valuable, Communication Is Key

It’s important to stay clear and consistent in your communication with your customers and to keep an accurate, updated database. When a customer contacts you, your customer services need to have all the knowledge of the customer at their finger tips. (For example; products previously purchased, their preferred payment method, any previous phone calls made to your customer services etc) This is also known as Customer Relationship Management (CRM). It will prevent the same questions being asked to the customer each time they get in touch and it shows the customer you remember them and they aren’t just another number in your books! How many of us have been frustrated with companies at some time or another for not remembering our details or repeatedly asking us the same questions? You don’t want this for your customers!

Analyse And Change

As much as you try to retain your customers, sometimes you may not always be successful. If customers are leaving you it will benefit you tremendously to understand why. Analysing this behavior allows you to gather important, valuable information enabling you to make informed decisions on any potential changes you feel would improve the customer experience. Listen to what your customers have to say! The healthy snacks by post company Graze provide a great example of this – when a customer wants to unsubscribe from Graze, a little questionnaire is sent to the customer with an offer of receiving two half price Graze boxes if they fill out the form. This is a great way of collecting information on why the customer wants to leave and a last chance at retaining that particular customer.

Customer and Brand Interaction

Another up and coming player key to customer retention is Social Media. Social media is a fantastic platform for customers to interact and discuss their experiences together. By sharing their stories and praising your products, it’s a great way of encouraging repeat purchase between themselves. It’s also a perfect way of building the relationship between you and your customers and a useful portal for showcasing your brand personality. Your social media platforms are also a useful tool for potential customers looking for reviews or those customers just needing a little nudge to complete their purchase.

Be careful though, as easy it is for customers to discuss their positive customer experiences, it’s just as easy for them to vent their anger – and it’s visible to a huge audience. You need to be hot on your customer service and deliver on your promises to avoid any nasty complaints. Not for the faint hearted!

Something A Little Different

In a recent post on The Online Retailing Blog, Ryan blogged about Gamification of eCommerce and how it can be used to engage your customers and therefore encouraging them to repeat purchase on your site. This is a great avenue to explore and an interesting retention strategy for online retailers.

By creating possible challenges, tasks and/or goals for customers to complete on your site through either completion of purchases or referring friends for example, you build a community and one that a customer feels compelled to return too to gain discounts, loyalty points, free products etc. It’s a fun way of engaging with your customers and can lead to increased customer loyalty. See Ryan’s post for more information on Gamification.


Did you know it costs five times more to acquire a new customer than it does to gain a repeat purchase and retain an existing customer? A happy existing customer is likely to purchase regularly on the basis of their successful previous orders and without expensive fancy marketing. Creating happy and loyal repeat purchase customers is cheaper than acquiring new customers and therefore more profitable to your brand for the future.


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