23 Customer Retention Strategies and Examples

Getting new customers is always a good thing. But did you know that it costs six times more than keeping existing ones? Effective customer retention strategies can be the blueprint for delivering an exceptional customer experience that creates a life-long customer and brand champion. 

To help you develop your own customer retention plan, we’ve highlighted 23 customer retention strategies with examples. Following these can help your business improve customer satisfaction, loyalty, and retention rates. 

What Is Customer Retention?

Customer retention refers to the practice of encouraging customers to stay with a company and turning one-time purchases into repeat customers. To be truly effective (and not pushy), this involves using various strategies and efforts aimed at building long-term relationships with your customers.

To be successful at customer retention and reduce churn rates, you have to focus on delivering consistent value, personalized experiences, and exceptional customer service all the time. One of the reasons this is so important is because keeping your current customers is often more cost-effective than acquiring new customers.

23 Effective Customer Retention Strategies

Here are twenty-three strategies to help you retain your customers that you can start implementing today. For each one we’ve included a real-life example so you can see the strategy in action.

1. Get to know your customers

Understanding your customers is fundamental to retention. Conduct surveys, analyze purchasing behavior, and utilize customer feedback to create detailed customer personas. This knowledge empowers you to tailor products, services, and marketing efforts to specific customer expectations, needs, and preferences.

Canyon Coolers’ success in understanding its customers is rooted in its use of Nextiva’s reliable and efficient communication platform. The company enhances customer satisfaction and operational efficiency by centralizing and streamlining communication. The scalable platform also supports growth, allowing Canyon Coolers to maintain strong customer relationships and gather valuable insights.

2. Establish shared values with your customers

Customers are more likely to stay loyal to businesses that align with their beliefs and values. Clearly communicate your company’s mission, vision, and values. Highlight how your business contributes positively to society or the environment. This builds and strengthens emotional connections, increasing customer loyalty.

Conscious Step excels in customer retention by aligning its brand with its customers’ values, emphasizing social impact and transparency. It builds strong customer loyalty by fostering shared values and creating emotional connections through storytelling. Community-building efforts and engagement reinforce this bond, creating a sense of shared purpose and advocacy among its customers.

3. Build trust with your customers

Transparency, honesty, and reliability are essential for building brand trust. Deliver on promises, address concerns promptly, and prioritize customer satisfaction. A strong foundation of trust encourages customer loyalty and advocacy.

Veterans Home Care demonstrates an effective customer retention strategy by deeply understanding and addressing the specific needs of veterans, helping them access VA benefits, and providing immense value. The company emphasizes exceptional customer service with a dedicated team and strong communication, ensuring customers feel supported throughout the process.  Its commitment to reliability, trustworthiness, and scalability through technology adoption like Nextiva ensures consistent service delivery and positions it for growth, fostering customer satisfaction and loyalty.

4. Encourage reviews and capitalize on social proof

Positive customer reviews and testimonials act as powerful social proof — and can be a cost-effective, word-of-mouth marketing tool. Encourage customers to share their experiences through platforms like Google, Yelp, or your website. Highlight these reviews in your marketing materials to build credibility, attract new customers, and reinforce the value proposition for current customers.

Tablez drives customer retention by strategically managing online reviews and social media interactions through Nextiva’s platform. Centralizing customer communication, proactively managing reviews, and encouraging feedback helps Tablez build confidence and strengthen customer relationships. Leveraging positive reviews as social proof further enhances the brand’s reputation and attracts new customers.

5. Engage with customers consistently

Consistent interaction keeps your brand top-of-mind. Utilize email marketing, social media, and personalized communication to engage with customers regularly. Provide valuable content, offer exclusive promotions, and seek feedback. This maintains interest and strengthens the customer-brand relationship.

The Florida Panthers’ customer retention strategy is driven by consistent fan engagement through Nextiva’s communication platform. By offering multiple communication channels and quick response times, the Panthers enhance the fan experience and build stronger relationships.

6. Create a dedicated community

Building a community around your brand fosters loyalty and creates a sense of belonging. Utilize online forums, social media groups, or in-person events to connect customers with each other and your brand. Encourage interaction, share success stories, and offer exclusive benefits to community members. This cultivates a strong customer base and generates valuable word-of-mouth marketing.

LEGO has built a loyal community of brand advocates by actively engaging new and current customers through online platforms. They offer a platform that encourages user-submitted product ideas and showcases content generated by customers. The company fosters a deep sense of belonging and shared purpose by organizing events, providing exclusive content and rewards, and aligning with charitable causes.

7. Leverage AI and other new technologies

AI-powered tools can enhance customer experiences and drive retention. Implement chatbots for efficient customer support, utilize predictive analytics to anticipate customer needs, and leverage data to provide personalized experiences. These technologies streamline processes, improve response times, and create more satisfying customer journeys.

OTK‘s partnership with Nextiva is a prime example of how companies can leverage AI and new technologies to enhance customer retention in a healthcare setting. By combining advanced analytics, automation, and a robust communication platform, OTK has improved patient recruitment, engagement, and overall experience.

8. Educate your customers

Empowered customers are loyal customers. Provide valuable content, tutorials, and resources to help customers understand your products or services better. Offer workshops, webinars, or online courses to deepen their knowledge and self-service resources, like knowledge bases, FAQs, and help centers, to enhance their experiences. This positions your business as an expert, promotes brand trust, and reduces the likelihood of customers seeking solutions elsewhere.

Nextiva enhances customer retention by prioritizing education, which helps users fully utilize the platform and boosts satisfaction. An elite onboarding experience paired with comprehensive training and resources leads to increased product adoption, reduced support costs, and stronger customer relationships. This educational approach minimizes churn and sets Nextiva apart as a customer-centric provider.

9. Deliver exceptional customer experiences

Every interaction with your customers should be memorable. Train employees to go above and beyond to meet customer expectations, resolve issues promptly and effectively, and offer personalized solutions. Consistently delivering exceptional experiences fosters customer satisfaction and loyalty.

Hyundai uses Nextiva’s social media and reviews software to centralize and streamline customer interactions across various channels, enhancing customer retention. This technology enables Hyundai to manage issues efficiently, make data-driven decisions, and maintain a consistent brand experience.  The company focuses on rapid response and proactive issue resolution, ensuring exceptional customer experiences that foster long-term relationships.

10. Personalize interactions

Customers appreciate tailored experiences. Utilize data to understand individual preferences and tailor marketing messages, product recommendations, and customer support interactions accordingly. Personalized communication demonstrates that you value each customer as an individual, strengthening relationships.

Spotify has mastered the art of personalization, making it a cornerstone of its customer retention strategy. Spotify analyzes user preferences and listening habits to create tailored playlists, like Discover Weekly and Daily Mix. It also provides a super popular (and extremely shareable) end-of-year “Wrapped” with metrics for the entire year.  This approach enhances music discovery and keeps customers engaged by recommending new tracks and artists that match their tastes. As a result, users develop strong brand loyalty and are less likely to switch to competing platforms.

11. Empower employees with the right tools

Your employees are the frontline of customer interaction. Equip them with the necessary tools, knowledge, and support to excel in their roles. Provide customer relationship management (CRM) software, access to customer data, and ongoing training. Empowered employees can deliver exceptional service and contribute to overall customer satisfaction.

Operation Enfant Soleil (OES) successfully enhanced its fundraising efforts by swiftly adopting new technology, empowering volunteers, and improving scalability and efficiency. The use of Nextiva’s platform allowed OES to handle more calls, gather valuable performance data, and streamline volunteer operations, leading to increased donations and productivity. This technology-driven approach demonstrated OES’s commitment to overcoming challenges and achieving greater impact for its cause.

12. Be customer-centric

Put the customer at the heart of your business decisions. Understand their needs, preferences, and pain points. Align your products, services, and marketing strategies to deliver exceptional value and satisfaction. 

For example, simplify the checkout process so the customer can make purchases faster and easier. When customers have an issue with a product or service, provide a hassle-free experience for returns, exchanges, and refunds.

Chewy‘s customer retention is driven by its customer-centric approach, including 24/7 support, personalized care, and a user-friendly website. Its Autoship program and wide product selection offer convenience, while fast shipping and a focus on pet well-being further enhance customer satisfaction.  By prioritizing exceptional service and a deep understanding of pet owners’ needs, Chewy has cultivated a loyal customer base and strong brand reputation.

13. Use surprise reciprocity to foster a positive image

Surprise reciprocity involves providing unexpected value to customers, creating a sense of obligation and goodwill. Offer unexpected gifts, discounts, or exclusive perks. This builds positive brand perception and encourages customers to reciprocate by becoming loyal advocates.

Taco Bell runs a campaign that leverages surprise reciprocity and the idea of “giving to get” effectively. Entitled “Steal a Base, Steal a Taco,” it gives away free tacos to everyone in America when a road team “steals” a win from the home team during the MLB finals. The gesture reinforces a positive image with loyal fans. The campaign also generated a ton of press, earning new customers as well.

14. Find ways to surprise and delight your customers

Go beyond expectations to create memorable experiences. Whether through personalized gestures, unexpected problem resolutions, or unique offerings, creating delightful moments strengthens customer relationships and creates lasting positive impressions.

Capital One often goes above and beyond for its customers. For example, the company caught wind of a customer who spilled orange juice on his keyboard, rendering certain keys on his keyboard useless. Since the bank’s security prevented him from simply copying and pasting his password into the box, he could not access his online account. The customer posted about it on Reddit and soon after received a brand new keyboard and a handwritten note from Capital One. It made such an impact that the customer posted about it numerous places online and vowed to never bank anywhere else.

15. Collect customer feedback

Actively seek customer input through surveys, reviews, and social media listening and monitoring. Analyze feedback to identify areas for improvement and uncover opportunities to enhance the customer experience and address any customer complaints. Demonstrating a commitment to customer feedback builds trust and shows that you value their opinions.

IKEA’s customer retention strategy focuses on gathering and analyzing customer feedback to build loyalty. By centralizing customer interactions and implementing standardized surveys, IKEA ensures efficient responses and consistent brand experience, leading to improved customer satisfaction.  The company’s data-driven decision-making measures employee performance and allocates resources effectively, allowing continuous improvement and a personalized customer experience.

16. Use gamification to make interactions fun

Gamification incorporates game-like elements into customer interactions. Create customer retention programs that allow customers to collect points and rewards, and win challenges. Offer interactive experiences, such as quizzes or virtual contests. Gamification makes interactions enjoyable and encourages repeat engagement.

Nike has successfully integrated gamification into its customer experience through apps like Nike+ Run Club and Nike Training Club, offering challenges, leaderboards, and rewards to motivate and engage users. Their loyalty program uses points and tiers to unlock exclusive benefits, while gamified shopping elements create excitement and anticipation.  By transforming fitness and shopping into interactive, game-like experiences, Nike has fostered a loyal customer base, encouraging repeat purchases and brand advocacy.

17. Create seamless experiences across all channels

Ensure a consistent customer experience across all touchpoints, whether online, in-store, or through customer support. Integrate different channels to provide a unified view of the customer. This eliminates friction, reduces frustration, and enhances overall satisfaction.

DHL’s customer retention strategy focuses on providing fast, reliable service and leveraging technology to enhance the customer experience. It prioritizes rapid response times, with a commitment to addressing queries within two hours, and consolidates customer interactions into a single platform for efficient communication.  DHL uses data-driven decision-making and proactive issue resolution to optimize service delivery and maintain a positive brand image while giving personalized attention to VIP customers to foster loyalty and advocacy.

18. Offer exclusive rewards and loyalty programs

Reward loyal customers with exclusive perks, discounts, or early access to new products. Tiered loyalty programs can incentivize increased spending and engagement. By recognizing and appreciating customer loyalty, businesses can deepen relationships and encourage repeat purchases.

Starbucks has established a powerful loyalty program that significantly drives customer retention and revenue. Its tiered rewards system incentivizes higher spending and creates a sense of achievement, while personalized rewards, tailored through customer data, enhance relevance and redemption rates.  Integration with its mobile app offers convenience, fast mobile ordering, and a digital wallet. All of these improve the customer experience while fostering community, and strengthening customer bonds and loyalty.

19. Create multi-buyers through targeted email marketing

Nurture customer relationships by sending personalized email campaigns that highlight complementary products or cross-selling opportunities. Analyze customer purchase history to identify potential upselling and cross-selling opportunities. Effective email marketing can increase average order value and encourage customers to explore additional product offerings.

BuzzFeed has effectively used email marketing to turn casual readers into loyal customers by deeply understanding their audience and crafting personalized campaigns. It achieves this through meticulous audience segmentation, ensuring tailored content delivery based on user behavior and demographics.  By offering engaging content, strategic product placements, exclusive deals, and continuously optimizing based on performance metrics and KPIs, BuzzFeed keeps subscribers engaged and encourages repeat purchases, reinforcing brand loyalty.

20. Offer a subscription service

Subscription models provide a recurring revenue stream and foster customer loyalty. Offer exclusive content, products, or services to subscribers. By creating a sense of anticipation and value, subscription services can increase customer lifetime value (CLV) and keep customers happy.

Amazon‘s Subscribe and Save program enhances customer retention by automating reorders for frequently purchased items and providing convenience and cost savings that encourage continued subscriptions. This service creates predictable recurring revenue for Amazon, aiding in inventory management and financial planning while also increasing order values as customers add more items to qualify for higher discounts.

21. Keep the momentum going

Whether your brand’s momentum is a slow burn or catches fire with a viral moment on social media, it’s crucial to keep fanning those flames. Capitalize on the buzz and lean into what you do best by tailoring the messaging of newsletters, social media, or web content. Share valuable insights, industry trends, or behind-the-scenes content to keep your brand top-of-mind. 

Stanley experienced rapid growth after a TikTok video showed ice inside a customer’s tumbler that sat through a car fire. It leveraged this viral moment by responding with authenticity and empathy and offering to replace a car that caught fire.  Stanley reinforced the product’s value through the video, engaged actively on social media to build a community, introduced limited edition items to encourage repeat purchases, and implemented a customer loyalty program to reward and deepen customer relationships.

22. Connect your product to your audience

Highlight the emotional benefits of your product or service. Create compelling storytelling that resonates with your target audience. Connecting on a deeper level fosters brand loyalty and encourages customers to become advocates.

The San Antonio Spurs prioritize the fan experience during and outside of live games. They ensure their team can connect with fans seamlessly, demonstrating a strong focus on customer service. Their investment in a state-of-the-art communication platform ensures improved accessibility and seamless connection with fans while also streamlining internal communication to focus more on fan engagement and retention.  Their strong team-oriented culture and adoption of innovative technologies support a proactive approach to growth and maintaining high service quality, fostering long-term fan loyalty.

23. Create customer referral programs

One of the best strategies for customer retention is to leverage satisfied customers as brand ambassadors. Offer incentives for customers who refer friends and family, like coupons and discounts on future purchases, access to exclusive content, free gifts, and more. Referral programs can generate new leads, increase customer acquisition, and boost brand reputation.

Dropbox‘s referral program was key to its rapid growth by incentivizing users to share the product for additional storage, creating a viral loop, and expanding its user base. This strategy increased customer engagement and product adoption, as referrers were more likely to continue using Dropbox, and referred users often started with a specific purpose.

How to Measure Customer Retention 

Understanding key metrics is essential for measuring customer retention. These numbers provide insights into customer behavior, satisfaction, and areas to make improvements.

🙂 Customer retention rate (CRR): The percentage of existing customers who continue to do business with a company over a specific period.

✌️ Customer churn rate: The rate at which customers stop doing business with a company.

🤑 Customer lifetime value: The total revenue a business can reasonably expect from an average customer account.

💸 Customer acquisition cost: The cost associated with acquiring a first-time customer.

🔁 Repeat purchase rate: The percentage of customers who make a second purchase.

🧾 Product return rate: The percentage of products returned by customers.

💯 CSAT and NPS scores: Customer Satisfaction (CSAT) and Net Promoter Score (NPS) are feedback metrics that rely on customer surveys. CSAT measures overall satisfaction, while NPS gauges customer loyalty and advocacy. The results of these surveys can help you learn more about your customers, support, operations, and products and services so you can improve customer retention — and your bottom line.

Build Loyal Customers Easier With Nextiva

These customer retention examples demonstrate how top companies create happy, lifelong customers. Each example offers a unique, sincere customer experience that addresses customers’ needs or solves their pain points. 

Adding a CX platform like Nextiva makes it even easier to add new customers while reducing the number of customers lost. Nextiva provides the right tools to help boost customer loyalty, reduce churn, and deliver consistently amazing customer experiences — so your customers are happy to stay YOUR customers.

Related: Mastering CX Success: Your Guide to Teaming and Goal Setting