What is Customer Retention? Importance, Strategies, Examples 

It is very economical to make the existing customers buy things repetitively than attract new customers. The cost of impressions, clicks and conversion rate is increasing in the e-commerce business. Today, we’ll discuss what is customer retention; its importance, strategies, tips on how to improve it, and examples.

What is Customer Retention? 

Customer retention is the process of amplifying the customer’s repetitive purchasing rate and extracting additional value from them. The purpose of customer retention is to make sure that the customers are buying things from you repetitively; feeling satisfied with the services of the company, and not impacting the competitors.

Benefit & Importance of Customer Retention 

Some of the benefits and the reasons for the importance of customer retention are as follows;

High Profitability

The longtime customers would buy the other products of the same company that they trust and are familiar with. A higher customer satisfaction rate would amplify the company’s profitability among various product lines. A research study by Bain & Company showed that online shoppers would purchase different types of products from the online store of their choice.

Increased Order Value

A higher customer retention rate means that the customers have got higher trust and confidence in you. The purchasing rate of the customers from your store would be higher in their every visit. A study by Bain & Company showed that the longtime customer relationship of the company with the online store relies on the amount of time they spend there.

Easier to Influence Existing Customers

It is highly economical and cost-effective to keep the existing customers than to find new ones. Studies have shown that every store has got 100 existing customers that perform shopping of 10 dollars every month.

Good Terms with Brand Advocates

The longtime customers are like your company’s brand advocates and ambassadors; they would perform referral and word-of-mouth marketing of the company. People didn’t know the need and significance of Dropbox (a cloud storage platform) back in 2008. The referral program and word-of-mouth marketing allowed the company to amplify its customer database from 100,000 to 4 million over the past 15 years.

Strategies of Customer Retention 

Some of the main tips and strategies on how to improve customer retention rate are as follows;

Offering Discounts

Offering a discount code on the next purchase after the first shopping is a great way to buy things from you repetitively. Discounting is a very beneficial technique to attract those customers that don’t have a shopping experience from you.


Emailing offers you a great opportunity to establish a loyal database of customers before and after first buying products from you. It is a great way to send a follow-up email a week or two after their purchase and thank them for shopping from you.

Loyalty Programs

Loyalty programs are a very efficient approach to motivate customers to buy things from you repetitively. It attracts customers toward shopping so that they would win rewards.

Customer Support

As the name implies, customer support allows you to talk to your customers and offer them support whatever they’re looking for. You should make tools like help desk and live chat available for your customers, it allows you to answer customer questions, resolve their complaints, and increase sales ultimately.

Customer Account

Having a separate account for every customer would make the shopping experience much easier; because they don’t have to fill out the information next time if they’re using the same account. The key here is to create their account after their first purchase, right after they’ve placed their order.

Easy Return

According to an estimate, 33% of the customer would leave shopping because of the difficulty in shopping. Easy and pain-free return is a great quality of customer service and it allows you to establish trust with your customers.

Fast Delivery

Customers don’t like waiting a long time for the delivery of their products. Studies have shown that roundabout half of the customers leave their shopping cart due to the long delivery time.

Rewarding Customers

You should reward customers and exceed their expectations. They’re like gifts, coupons, promotions, and offering great customer service. it suggests that you’re recognizing the value of your customers.

Personalized Experience

Businesses and companies that offer a personalized experience, tend to earn 40% more profit than those that don’t. It comprises offering customized products, special experiences for them, and personalized product recommendations.

Referral Program

They employ the company’s existing customers to promote its products and service on their social network. In return, they would receive discount codes, rewards, and incentives.

Customer Feedback

The feedback makes customers feel that the company listens to their voices and recommendation. The target customers would be actively interested in your brand if they think that you value their feedback.

Examples of Customer Retention 

Some of the main examples of customer retention are as follows;

West Path

West Path is a morally and ethically sourced clothing company operating its business from San Diago. The company placed its brand sticker on all of its product packagings. Although it is a small thing, it pays off well in unexpected ways. However, the sticker of West Path puts a smile on the faces of people and the people would keep it in their mind.


Pepper is a women’s brazier company that assists females in finding the right fit for them, and the company follows a personalized approach. The personalized experience helps customers to find the right fit in under a minute based on the simple questions that the platform asks you.

Dia & Co

Dia & Co is a female plus-sized women’s clothing company. Highly specialized and niche-oriented brands follow the referral program, and roundabout over 50,000 times customers shared the company’s referral link in the first month. The daily conversion rate of the company was 22 customers.

Conclusion: What is Customer Retention? Importance, Strategies, Examples 

After an in-depth study of what is customer retention; its importance, improving tips and strategies, and examples; we have realized that retaining customers is highly important for companies. If you want to amplify the customer retention rate, you should follow and practice the abovementioned tips and suggestions.

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