22 Customer Retention Strategies for 2024

In 2024, brands still struggle to choose between customer retention and customer acquisition. Both are crucial for business success, but acquiring new customers has become challenging as well as cost-extensive.

But that's not all.

Though customer acquisition costs continue to surge exponentially, conversions from new customers are not guaranteed in this hyper-competitive business landscape where customers are spoilt for choice. In contrast, existing customers trust your brand and are more likely to repeat purchase and refers others as well.

In this blog, we will share 22 customer retention strategies that you can use to nurture and retain customers, growing your business organically.

What is customer retention?

Customer retention is the process of nurturing and maintaining existing customer relationships in a way that it yields repeat sales, positive word of mouth and valuable referrals.

It is a series of small and big thoughtful gestures, exemplary support and personalized attention that fosters warm feelings of loyalty in your customers and encourages them to keep coming back to you for content, purchases and other forms of customer engagement.

To determine your customer retention efficacy, you need to measure how many of your customers stick around over a predefined duration, normally one year. Use this simple formula to compute your customer retention rate:

Customer Retention Rate = [# of customers at the end of a period - # of new customers acquired during the period] / # of customers at the beginning of the period

If your retention rate is below your industry average, you must revisit or optimize your customer retention strategies.

Why is customer retention important?

Imagine spending enormous money on advertising and customer acquisition and then seeing them leave you for a competitor. That's exactly what you can avoid by prioritizing customer retention. Let's take a look at all the benefits of this approach below:

1. Cost efficacy

As stated, customer acquisition is costly and involves huge overheads in the form of advertising, marketing and sales commissions. Customer retention is a more cost-effective growth strategy and yields a more assured ROI. You spend on improving your product offerings, customer service quality and loyalty programs — which expands your customer lifetime value (CLV) and contributes positively to your brand's bottom line.

2. Positive brand perception

Customer retention will not only help you prevent customer churn, but it will also help you acquire more customers through brand advocacy. Satisfied customers can transform into brand advocates, recommending you in their circle of influence and improving your brand image in the process. This earned media value is invaluable in getting more eyeballs on your brand without spending an extra penny.

3. Simplified upsell and cross-sell

Loyal customers will be willing to purchase premium products or higher-level subscription plans as they are already familiar with the brand and trust the quality of its products or services. Moreover, they are more likely to be responsive to your sales overtures than brand-new customers or prospects who barely know your brand.

4. Competitive advantage

Customers with positive experiences will stay loyal to your brand and not switch to a competitor easily. Brand affinity fosters customer loyalty. Customer retention strategies amplify and simplify relationship management, giving you an unrivaled edge over competitors.

Now that you know why customer retention is so important, let's learn how to implement these strategies.

22 Customer retention strategies you need to ace in 2024

Here are proven customer retention strategies that brands of all shapes and sizes can implement with ease. It's advisable to pick strategies that align with your business format and budgetary constraints.

Improve the onboarding process

The onboarding process is the first formal interaction of a customer with your brand and it can literally make or break their experience. Abandonment is a very real risk if customers find your onboarding too complicated or confusing.

Ensure a smooth and pleasant onboarding that reinforces customer retention with these pro tips:

• Send an email or video with instructions: When a customer signs up, send them an email with all the instructions or a video with a step-by-step process of using your product. They will feel more confident and encouraged to start the engagement.

• Use callouts to guide the customer: Use callouts on the app or website to guide the customer through every step. Integrate a live chat platform that customers can access to interact with your customer service team if needed.

  

• Make onboarding convenient: Simplify the onboarding experience by minimizing the steps required to complete the process. This will not overwhelm the customer and enable them to complete the process with ease.

• Send completion reminders: Send reminders if the customer has not completed the onboarding process to help them stay on track and return to the product.

Implement the most requested and relevant features

Make your customers feel heard by implementing their most sought-after features or updates. This will encourage them to use the product more frequently and recommend it to others. Positive experiences draw the customer like a magnet, improving the possibility of conversion.

To feel your audience's pulse, use customer surveys, analyze feedback and monitor social media posts with proactive listening. All of this will help you pick stated and unstated desires and capture moments of need in real time. 

Personalize the customer journey experience

According to McKinsey, 71% of customers expect brands to deliver personalized experiences from the first moment they stumble upon a brand. 76% get frustrated when this doesn't happen.

As a customer retention strategy, customer journey mapping and personalization prove to be potent. Here are a few ways to get started:

• Use the customer's data to understand their needs and preferences and tailor their experience accordingly. You can take inspiration from brands like Netflix and Spotify that personalize the recommendations based on your likes and interests. In fact, Netflix has made it their mission statement to delight every user with content they love and crave. That's a real commitment to customer retention.

• Map out the stages a customer goes through your business and identify opportunities to personalize their experience. For example, you can send them links to videos and help guides after onboarding them or send product updates regularly to increase usage.

• Train your customer service agents to personalize their interactions. Customer support solutions (like Sprinklr AI+) leverage Generative AI models to help agents moderate their responses for every customer and scenario.

Strategies like these will enable you to provide a better experience to customers and boost your customer retention rate.

Provide a subscription option

Subscriptions encourage customers to buy from you repeatedly, especially if they promise a discount. You can offer monthly or annual subscription services at discounted prices to convert one-time buyers into repeat customers.

However, ensure you deliver instant value as that will help win new customer's trust. For example, offering free or priority deliveries for subscribers can increase subscriptions and improve customer retention.

Offer exclusive discounts

Who doesn't love exclusive discounts and freebies? They create a sense of exclusivity among customers, improve customer satisfaction (CSAT) and set off a virtuous cycle of discount-led purchases. Hence, don't undermine the potential of discount marketing to retain customers.

Members-only discounts, early-bird discounts and referral bonuses are a few examples of exclusive discounts you can offer your loyal customers.

Focus on delivering convenience to customers

Customers are more likely to return and repeat purchases when they find your service convenient. Hence, identify ways to provide convenience to your customers.

For example, assume you run a grocery brand. Features like smart lists help customers restock products they need frequently without hunting for them every time. You can also provide different payment and delivery options to give customers the flexibility to purchase and receive orders per their preferences.

Try to reduce friction and simplify processes with options like fast checkout processes, easy returns, refunds and hassle-free customer service to improve customer experience.

Invest in loyalty programs

According to thought leader, Shep Hyken, brands can unlock customer engagement by giving emotional perks, such as solid customer loyalty programs.

Take Sephora, for example. The international beauty brand started a Beauty Insider Program in 2007 to reward customers for purchases. Over the years, the Beauty Insider program has grown from offering additional savings and more sampling choices to providing experiences like a Francis Ford Coppola Winery tour and wine tasting for two.

No, you don’t have to do what Sephora did. But you can start by identifying loyal customers who engage with your brand frequently and reward them for their loyalty.

Here are a few things you can do to start a loyalty program:

• Reward customers for purchasing from you or referring your product to others

• Ensure the loyalty points are easy to redeem

• Send exclusive invites through email or social media to loyal customers and give them previews or special discounts on sales

• Make the program so unique that customers feel privileged to join it

A great loyalty program can help you retain customers and generate more revenue when they redeem their loyalty points.

Incentivize referrals

Referrals reinforce positive experiences. It shows that the customer is happy with your product and services and is willing to share their experience with others. By offering incentives for referrals, you reward your customers for sharing their positive experiences.

It helps to strengthen the customer's relationship with your brand and increases the chances of customer loyalty. It helps build trust and goodwill and encourages customers to spread awareness about your brand to others.

You can incentivize referrals by offering customers monetary or non-monetary rewards like cashback, discount coupons, priority access to new products or invites to exclusive events.

Make it easy for customers to refer your brand to others. For example, you can send them referral links, which they can share with others.

Build engagement through community

Create customer communities where customers can connect, share experiences and receive support from each other. It creates a sense of belonging and improves customer engagement.

There are various ways to build a tight-knit, thriving community of customers:

• Online forums and discussion boards: You can create a dedicated space for customers to ask questions, share tips, and connect with other users. This can be a valuable resource for customers to learn about your product and services. It can also help you gather feedback and insights on what customers want to improve your offerings.

• Social media groups: You can create private or public groups on social media platforms where customers can interact with each other and build relationships. This will help you improve customer engagement.

• User-generated content (UGC) campaigns: You can encourage customers to create and share content about your brand through blog posts, social media posts, videos or photos. UGC is a powerful way to build engagement and reach a wider audience.

• Customer events: Host events that bring customers together. This could include product launches, workshops, or meet-and-greets. They can help in creating a sense of community among your customers.

• Use tools to simplify community management: Community management tools help scale your community management efforts without extensive time investment and 33% lower costs. These tools provide customers with personalized self-service CX that helps them find their own answers, discover new content, and engage with personalized offers. It also reduces the need for costly hands-on interactions.

Re-engage inactive customers

Re-engaging inactive customers is a surefire way to improve customer retention. Remind them of the value of your products and services and sweeten the deal with come-back discounts and offers.

Moreover, try to gather valuable feedback on why they stopped engaging with you, using the insights to fine-tune your experience for them and others. It can also help you churn triggers and nip them proactively.

Become irreplaceable

If you want to become an integral part of your customer's life and not just another inactive app on the mobile phone, strive to make your brand irreplaceable. Ensure your customers feel a strong sense of belonging to you, and they will continue to purchase from your brand, even when lured by competition.

Deliver a stellar customer experience, be responsive to customer needs and offer them solutions they cannot find elsewhere. Invest your time in understanding customer needs and cultivating relationships with them.

Improve your customer service quality

Provide customer support coaching to your team to equip them with a customer-first mindset and skills, such as empathy, communication and conflict resolution. This will help agents resolve issues more effectively and build rapport with customers.

These tenets will help shape your coaching programs and transform your agents into superheroes:

• Provide regular feedback to invoke a culture of improvement

• Ensure ongoing training to keep pace with changing customer expectations

• Use role-playing and simulations to help agents practice skills in a safe environment

• Monitor performance rigorously using agent performance scorecards

Take charge with proactive customer service

Do you contact your customer regularly or is it just a few days before their subscription expires? Don't be surprised by your customer's lukewarm response if it's the latter. Proactive outreach is a hallmark of brands vouched as customer magnets.

Want to replicate their success? Take a cue from these tips to nail proactive customer service:

• Solicit customer feedback regularly via formal and informal interactions

• Share relevant email updates to spread the word about new developments or offers

• Invite customers to participate in surveys and events

• Celebrate special occasions in your customers' lives with individualized messages

• Disseminate their success stories via your social handles

Respond, don't react

History proves customers are averse to patronizing brands that react negatively or are impervious to customer feedback. Negative reactions can trigger escalations and dent your brand's reputation irrevocably.

In the event of a customer dispute or PR crisis:

• Avoid hasty or emotional responses.

• Listen carefully and empathize with the customer.

• Don't act defensively and overdo the apology.

• Go the extra mile, ensuring the aggrieved customer is pacified and satisfied with your response or resolution.

Read more: A checklist to manage crisis communication in 2024

Reduce your response turnaround time

Customer queries could come from any channel, such as emails, social media platforms and phone calls. Monitoring every platform and addressing the queries on time can be challenging. However, it is also important not to keep them waiting.

Determine the current turnaround time (TAT) for each channel. Identify the factors governing the TAT, such as the volume and complexity of queries. Then, set channel-wise SLAs (service level agreements) and ensure they are not breached. For example, email queries should be answered within 24 hours and social media queries in one hour.

Shorten your TAT by:

• Using a help desk or ticketing system to handle queries

• Creating a knowledge base and self-service portals to help customers find solutions independently.

• Opening up more channels for customers to reach out to you.

• Keep the customer updated about their query status if delays are expected.

When your service is quick and accurate, customer retention is guaranteed.

Improve post-sales support

A good post-sales service improves the brand’s reputation and promotes customer loyalty. It shows you care for the customer even after completing the sale. Here are a few ways to boost post-sales support:

• Thank the customer for the purchase and ask about the experience.

• Guide or resolve their queries to help them overcome the initial usage barrier.

• Provide them with regular training and additional information to enhance their experience.

• Update them about the new features or offerings they can try to optimize their use.

• Contact the customer periodically to get their feedback and answer queries proactively.

Need more tips?

Check out this two-minute video to accelerate your after-sale customer support:

Bond with customers over shared values

In the book Fanocracy, authors David Meerman Scott and Reiko discuss building relationships with customers to turn them into lifelong fans. Customers want to feel a sense of belonging by bonding over shared values. Customers who share a common passion for the brand's products and services and feel a sense of belonging are more likely to stay with you for a long time.

For example, for a fitness brand, improving fitness would be the common goal among all customers.

Bond with the customers regularly and share information and products related to your industry to keep them engaged. You can also share customer or personal stories through blogs, customer interviews, videos and user-generated content to build a connection. Such content resonates with the customer and motivates them to engage further with your brand.

Educate customers

Customers love brands that empower them with the knowledge to solve their problems and simplify their lives.

Sprinklr's Resources, for example, educates and trains customer care agents, marketing teams and product and technology teams on topics like social media management, marketing, customer service and more. This helps the teams gain insights into new trends and find solutions to overcome business challenges. It gives them the resources and support required to become leaders in their industry.

Share the latest information

Maintain open communication with your customers by updating them on all news related to your company, upcoming initiatives and industry.

You can do that by periodically sending them emails and newsletters. For example, portals like Search Engine Journal send regular industry updates on SEO through emails to help marketers keep pace with the changes and incorporate them into their marketing strategies.

A proactive approach like this will help your customers feel valued and forge a stronger relationship with them.

Be authentic

According to Edelman Trust Barometer 2021, 88% of customers cited trust as the critical determining factor for deciding the brand to use or buy.

Customers expect brands to be authentic, take a social stand, and put their beliefs into action. They will not hesitate to call you out or abandon you if you are not authentic in your communication and behavior.

Practicing authenticity consciously and demonstrating it through your communication and offerings is critical.

Monitor customer experience metrics

It’s important to know where you lack while planning customer retention strategies. The best way to do that is by identifying metrics that guarantee customer success and monitoring them regularly to ensure you are on track. You can measure customer experience metrics like:

• Customer Satisfaction Score (CSAT): It gauges customer satisfaction with your products and services

• Net Promoter Score (NPS): It measures customer loyalty and the likelihood of recommending your brand

• Customer Lifecycle Value (CLV): It measures the total value a customer brings to your business throughout the journey with your brand

These metrics will indicate improvement areas and guide your customer retention strategies.

Use the right tools

Keeping up with different channels can be challenging if done manually. That being said, you must deliver an omnichannel customer experience in order to stay ahead of the curve.

That’s where customer experience tools can help you:

• Engage with customers 24/7 across all channels

• Monitor market trends and expectations

• Respond to customers immediately

• Deliver a consistent customer experience

• Automate tasks

• Analyze metrics and the effectiveness of retention strategies

Consider investing in the right tools, which is the only way to keep up with the ever-changing demands of today's customers and retain them.

Boost customer retention strategy with Sprinklr

Customer retention demands organization-wide efforts from all your teams including customer service, product, marketing and communication. That's where a Unified-CXM platform like Sprinklr can be a game-changer for brands by:

• Gathering data from all customer interactions, using it to create a unified view of the customer.

• Personalizing interactions, providing relevant offers and resolving issues quickly and efficiently with the help of the data.

• Identifying and addressing customer needs before they become problems using AI to analyze customer data and identify patterns.

Book a free trial to watch Sprinklr in action and boost your customer retention strategy.