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7 Secrets No One Will Tell You On How To Improve Customer Retention!

Indhuja Lal

9 April 2024

10 min read

When studies prove that 73% of customers stay loyal due to exceptional customer service experiences, you can clearly see the utter need to provide enhance CX to improve customer retention. But how? Confused? Worry not, we’ve got you covered. In this blog, we will discover why crafting memorable interactions is the cornerstone of modern business triumph- from increased customer retention to a competitive edge!

But first let’s get the basics cleared.

What is Customer Retention?

Customer retention is the ultimate element needed for the survival of your brand. Customers can make or break your company. Brands are competing and trying out all the best strategies to stop their competitor steal their customers. From the local brand slashing out prices to Wendy’s funny and sassy tweets, businesses are trying to create an impression in their customers. Customer churn can be a financial blow that is hard to overcome. The companies that have had a comeback is very few and it is not wise to see how strong your luck is.

A quote-how to improve customer retention

To make it simpler, 

  • Customer retention is essentially about how many customers are loyal to you. You might be offering a pleasant experience to your customers, but sadly that is not enough to turn them into loyal customers.
  • You have to think outside the box and come up with new customer retention tips to really show how much you value your customers if you want to stay. Honestly, you have almost the same product as the business next door. It is the differences, no matter how small that can make an impact.
  • It is how far you are willing to go, or how much more you offer, that matters. Today, CX is the key differentiator rather than the products you offer or how big your business is.

So, the solution? Improve your customer retention beyond the average rates in the industry. How? Let’s see.

What is an example of customer retention?

If there is one brand that even the haters secretly admire and aspire to be, it must be Disney. Look no further to see how to make your customers happy and loyal. ‘The Happiest Place On Earth’, Disney Land has more than a few strategically planned programs to keep their customers loyal.

Have you not thought about it? Billions visit Disney land a year? What is it that they have and the other theme parks don’t have? Do they have more rides? Reasonably priced food? Or is it the rapidly moving queues that are doing the trick?

No! It’s their hard-core loyal customers!But, how did they create such a strong base?
By delivering flawless customer experience to each and every one.

How do they do it?

For instance, you know how kids stand in queue for hours only to find out they are not tall enough to take the ride. These sort of thing happens at every theme parks. The disappointed kids go and stand in the next queue. Disney found a way to cheer up those disappointed kids by introducing queue passes which they can use to skip the queue in their next ride.

This is how you make a frown into a smile. Disney manages to do this in every aspect of their entity. Their employees go through very strict training to ensure that their customers are given a magical experience as promised by the brand.

Customer Retention Rate = ((CE – CN) / CS) x 100

CE: Number of customers at the end of a period
CN: Number of new customers acquired during the period
CS: Number of customers at the start of the period

Steps to Improve Customer Retention

Customer retention is not as tricky as it sounds if you are passionate about your customers. One of the easiest and popular ways to retain your customers is, cross-selling and upselling.

Cross-selling is about creating the desire to purchase complementary products to the ones they already have. Like buying matching shoes that goes just right with the dress they have already brought. Many catalogs present their products with a note that recommends another product to get maximum satisfaction. On the other hand, Upselling is about creating a desire to try out a more expensive product of the same company, more or less like upgrading.

Read More: Customer Retention Strategies From The World’s Best Brands

Here, we are going to discuss 7 more secrets that we feel will help improve customer retention.

7 Steps to Improve Customer Retention

1. VIP program

Designing a loyal program with certain perks would help you a long way in securing a strong base of loyal customers. A study claims that 46% of shoppers consider an effective loyal program while making their decision to purchase. Loyalty programs are like an open letter to your customers showing your appreciation towards the customers. Developing an exclusive program for your loyal customers acts as a reward and inspires your other customers to be a part of it.

Use Case:

  • Amazon Prime is an excellent example to show the success of this strategy. Amazon Prime is the customer loyalty program implemented to improve customer retention by Amazon, the e-commerce giant. Though initially it only offered faster delivery to the customers who subscribed, later it added on other services such as unlimited music and movies etc.
  • This subscription model secures your customer’s loyalty and encourages them to utilize the discounts and other cool perks to the maximum.
  • Amazon has now come up with the option to subscribe daily essentials and grocery for the non-prime customers too. This subscription option for the customers ensures that even the non-regular customers too get enticed into the loyalty program and not feel neglected.
  • This move for faster delivery reduced significantly the rate of customer churn for Amazon.

Having such an effective and well-organized loyalty program for loyal customers can boost customer growth and improve customer retention. They would feel validated and feel like they are benefitting much more than the other customers. This encourages brand loyalty.

The way to a customer’s heart is much more than a loyalty program. Making customer evangelists is about creating experiences worth talking about.

2. Create a feeling of ‘WE’

80% of your company’s revenue is coming from just 20% of your existing customers according to Gartner Group statistics. As explained before, a solid customer base is beneficial in all the ways possible. And one quick way is to create a loyal customer base is to foster a community exclusively for your customers.

This promotes an exclusive tone to their relationship with the brand, boosting loyalty. From movies to cafes, having a private community enhances constancy. You can use such platforms to break news and discounts. This gives your customers an excellent opportunity to share and help each other.

Use Case

  • The online brand community of Harley Davidson offers even new rider courses. The strong and growing customer community of Harley Davidson makes sure that they are feeling one with the brand.
  • The customers of today are given more choices than they can imbibe and it is crucial for you to develop an emotional connection rather than mere satisfaction to improve customer retention.
  • Establishing a customer community does the trick for you. In the community page of Harley Davidson riders can share their concerns and get solutions instantly from other riders. This promotes the feeling of We and that is vital for brand loyalty.

3. Surprises And Appreciation

We all love surprises, and customers are no different. The brands who manages to do so would definitely leave a mark in their customer’s heart. It is the emotional element involved in your customers’ equation with you that is going to make them stay. Be it surprises or a note of appreciation, a level of personalization is established between you and the customer.

It could be a surprise discount for a special occasion or a bouquet to show appreciation. Even big brands like Apple and Lego have broken the internet with their act of thoughtfulness. 

Use Case

  • A seven-year-old kid had purchased the LEGO Ninjago Ultra Sonic Raider Set. The kid took some of the characters from the set on a trip against his father’s advice. The Kid lost JayZX and wrote an email asking for a little help from Lego. And Lego leveraged this opportunity and became a hit with their reply to the Kid.
  • Making use of reciprocity combined with success can help you create a memorable experience for your customers. It need not be expensive, the just nice unexpected gesture would do the trick. How about another one?
  • Zappos ships orders overnight to their customers or inserts handwritten thank you notes for making the purchase. It shows the care and precision that has gone into the product even before they have actually opened the package.
  • Handwritten mails clearly convey how much you value their customers and instantly creates an emotional connection to the brand.

The more you engage with customers the clearer things become and the easier it is to determine what you should be doing.

4. Stand Up For A Cause

 It is extremely important for you to be socially responsible and stand up for a cause. Brands have evolved from product-centric to value-centric today. The customers prefer authenticity rather than quantity. Businesses must be socially active and that can range from bettering the community to stronger ties between the employer and employees.

From Microsoft to BMW almost all the giants are coming out in public with definite stands on political, economic and social issues. Customers no longer judge a brand by the quality of the products. It is about how ethically the brands carry themselves in the society that is taken into account.

Case Study

  • The Deloitte Millennial Survey revealed that more than 87 percent of Millennials go by the belief that a company should have a larger purpose that extends beyond just sales and profits.
  • If that data hasn’t made you rethink, here is another from Cone Millennial Cause Study that indicates 79 percent of customers are likely to purchase a product from a company that they consider to be socially responsible.
  • It is a bold move and you might fear of turning off a few customers. But you will gain loyal customers and significantly decreases customer churn. This is an excellent strategy to improve customer retention.

5. Feedback Matters

All the other strategies to improve customer retention can work only if this one is flawless. This is the pillar on which customer experience management stands on. If you want to serve your customers better you need to know what they want. You cannot go by hunches or guesses anymore.

Bad decisions cost you. Other than bad design or feasibility, it is the lack of knowledge about your customers that cause the product to fail. A competent feedback can make all your problems go away.

There are millions of examples to show how feedbacks can save a company and how not having one can break a company. It can be leveraged for making the various data-driven decision from a new product rollout to improving a product to designing the theme to your advertising. The information collected can be used to enhance your brand image. It also helps you to check out whether your customers actually see you the way you want them to see.

people buy only from brands they trust

A Use Case

Differentiating you from your competitors is essential to improve customer retention.

  • From creating hilarious and sarcastic commercials against your competitors like Jaguar or Benz to identifying and utilizing the collective emotions of the society like Dove, your possibilities are endless if you have enough data on your customers.
  • The beauty industry is one of the most competitive fields and is constantly kept on watch. Dove created a brand image of acceptance and understanding.
  • It encouraged the customers to embrace who they are with love rather than aspiring them to get the flawless and fair skin with a zero-sized body. All their marketing strategies and social experiments convey this message and were able to influence even the critics.
  • All this happened from successful and effective feedback surveys. It helped them to understand what their customers want and what they hated. This helps the brand to shape itself to suit that perception.

You can use advanced platforms such as SurveySparrow for this. Create, share, collate and analyze data and enhance CX!

6. Under Promise And Over Deliver

Well, this is a good enough policy in life and business. It saves you from disappointment and helps you to win them over with excitement. You should never give big promises to your customers. It will put off your customers and leave a very bad remark of you. You are risking trust and loyalty. To improve customer retention you should always keep surprises in store for them.

Personalization often helps you to over deliver and impress your customers. If you are consistent in your service you can be sure of winning many hearts for you to keep.

Use Case

Creating an emotional and personal connection with the customers is very important in Disney. And with thousands of people coming in every day, you might think it is impossible.

  • With the help of sophisticated technology, Disney had introduced MyMagic+ to elevate the park and hotel experience. The system allows visitors to access information and enjoy advance ride booking and hotel reservations.
  • To create an even more seamless experience with the brand, the MagicBand acts as a room key, park ticket and also as an alternative payment method.
  • To heighten personalization, the MagicBand helps to stimulate certain touch points in the park area and hotel like showing their name on the screen or by giving a photo taken unexpectedly. This goes beyond personalized messages and reinforces the magical theme of the park.  

7. The Inside Job

You don’t earn loyalty in a day. You earn loyalty day-by-day.

Experts claim bad employee experiences as the root cause of all this. If the management treats the employees better, the employees treat the customers better. Employees are the real asset of your company. Giving them adequate training to handle all that is thrown in their way makes them more confident and positive. This positivity would be sent across to all your customers.

Not all customers are easy to handle, not all customer needs are feasible. Having an employee who is passionate about your company would be ten times more worth than a customer.

  • Zappos hire candidates who believe that there is no distinction between work life and personal life. This promotes a friendlier and emotionally invested work culture.
  • When your customers interact with your employees they are becoming your advocates. Happy Employees make Happy Customers, Loyal Employees make Loyal Customers. There is no better way than having a welcoming employee waiting for the customers with a smile, to improve customer retention.

Wrapping Up!

That’s it! Customers choose to stay only if they feel valued. With the number of choices increasing in the market, the decision-making process gets too complicated.  Now that we know how to improve customer retention, it is time to put these steps to action.

You cannot always use the same loyalty program used by a brand to retain your customers. Resolving customer complaints and referral programs are widely used and are very effective. But deep market research would bring out the unique preferences of your target audience into the light. With the help of consistent feedback and market research, you would be able to recognize the strategy and in which method it should be used to impress and to improve customer loyalty. And it is easier to sell to your existing customers than to brand new prospects.

Before you go, why not give SurveySparrow a try? Its free!


1.What does improve customer retention mean?

A. Improve customer retention means enhancing efforts to keep existing customers loyal, reducing churn, and fostering long-term relationships for sustained business success.

2. What are the 3 R’s of customer retention?

A. The 3 R’s of customer retention are Recency (recent interactions), Frequency (repeat engagement), and Revenue (maximizing customer value) to solidify loyalty and engagement.

3. What are the 4 levels of retention strategies?

A. The 4 levels of retention strategies encompass

  • Reactive (issue resolution)
  • Proactive (anticipating needs)
  • Predictive (data-driven insights)
  • Strategic (aligning with business objectives)
Indhuja Lal

Product Marketer at SurveySparrow

A dilettante bohemian soul mesmerized with the magic of words, sworn to be unpredictable, and spellbound with the simplicity of humanity...

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