The best customers for your business don’t just make a one-time purchase and then look away, they repeat their behavior over and over again. Customer Retention – a customer retention strategy  that helps businesses grow revenue and improve brand value.

Not only that, Customer Retention also builds and strengthens the relationship between you and your customers. Trust and  loyalty  make your brand a new “religion” in the minds of customers.

Let’s learn with Malu what is Customer Retention? What benefits does this strategy bring? And learn 13 effective customer retention secrets that every business needs to read through.


What is Customer Retention?

Customer Retention  (or customer retention strategy  ) is a business’s efforts to limit the number of lost customers after each touchpoint. The task of this strategy is how to keep as many customers as possible to continue buying behavior of the business.

Customer Retention 1

A customer retention strategy begins with a business’ first contact with a customer, and continues throughout the relationship between the two parties.

>  ROI in Marketing – How to Use & Measure Effectively

What benefits does Customer Retention bring to businesses?

Most businesses choose to pour money into new customer acquisition activities (Customer Acquisition), because they think this is a fast and effective way to increase revenue.

In fact, Customer Retention results in better revenue performance and, importantly, up to  seven times  the cost savings compared to investment in developing new customers.

Customer Retention 2

There is a trend of shifting from spending money to attract new customers, to implementing strategies to retain old customers. The reason is that old customers have had a certain interaction and interest in the brand’s products/services.

This is also a more sustainable way of revenue growth for businesses. According to  research  by Bain & Company, the percentage of customers who continue to use the product and increase by 5%, the profit of the business can increase from 25% to 95%. The conversion rate from existing customers to loyal customers (frequently buying products) is 60 – 70%; while the conversion rate from new customers to loyal customers reaches 20% is the highest.

How to calculate customer retention rate – Customer Retention Rate

Businesses can calculate customer retention rate – Customer Retention Rate through the formula below:

Customer Retention Rate  = [Number of customers at the beginning of the period/(Number of customers at the end of the period – Number of new customers acquired during the period)]* 100

In there:

  • Number of customers at the beginning of the period:  It is the number of customers that the business has at the beginning of a sales period (maybe monthly, quarterly or annually).
  • Number of customers at the end of the period:  The number of customers that the business has after the end of a period.
  • Number of new customers acquired during the period:  The number of new customers that the business attracts in a sales period.

For example:

You have 40,000 customers at the beginning of the period (calculated over a period of 1 sales quarter). Within those 3 months, you get 1,000 new customers. The total number of customers at the end of the period of the store is 50,000 customers.

Thus, the store’s customer retention rate is: [40,000/(50,000 – 1,000)]*100 = 81.63%

12 Effective Customer Retention Strategies

Now, you understand the importance of customer retention, as well as how to calculate the Customer Retention Rate. Here are a few tips to help your business improve its effectiveness in retaining its existing customers:

1. Set sales goals

Before implementing any  business strategy  , you need to set your goals first.

First, you calculate your business’s customer retention rate using the above formula. Then consider your business type and target audience. And finally, set goals based on all the information you just gathered.

There are some products that are born for regular and continuous use by customers. For example, with fast-moving consumer goods (FMCG) such as shampoo, washing powder, toothpaste, fast food, etc. With products in this group, your sales target must always be high.

With other products, you absolutely have many ways to set appropriate sales goals. For example, for a tour business with a middle-income audience, you could target average Customer Retention rates, enhance them by offering promotional tour prices, or hotel discount voucher,…

Customer Retention 3

More importantly, when setting goals, you need to consider five aspects: Specific, measurable, achievable, budget-friendly, and time-bound.

Refer to more  mind maps  to set effective sales goals.

2. Map the customer journey

A customer journey map (or Customer Journey) is a visual map that shows the emotions and behavior of customers after each interaction with a business at touch points.

This map plays a very important role in determining the needs, aspirations, pain points (Customer Pain) and behavior of customers. From there, businesses can enhance  the customer experience  with the brand and improve customer retention rate.

Before building a complete map, you need to master the customer touch points first. Start with questions like:

  • How do customers  recognize  your brand?
  • Are customers reaching and learning about your business through Google?
  • Do they follow your business page on Facebook, Instagram?
  • Does your business receive referrals from external sources (through media channels, friends, relatives, and customers)?

Customer Retention 4

Through this information, you build touch points. From the touch points you determine the right way to interact and communicate with customers, to maximize sales efficiency.

3. First impressions are extremely important

Of course, and this is also extremely easy. Make sure the checkout and delivery process is as smooth as possible. Don’t forget to send a thank you email to your customers to show your sincerity for them.

4. Pay attention to intangible brand values

Brand Value is a very important thing to win the trust of customers. Having their trust, you will expect customers to visit and buy often.

For example, in recent years, ethical issues in business ( CSR ) have become one of the main aspects that businesses invest in. A series of spills and uses of chemicals in food have caused consumers to lose confidence and boycott products.

Customer Retention 5

To survive in the market, businesses must invest in intangible values ​​such as brand image, intellectual property rights, business ethics, etc.

5. Eliminate cumbersome procedures in payment

Do you find the checkout process on Amazon really much simpler than in the industry? That’s because they allow loyal customers to buy products with just 1 or 2 clicks.

one click amazon

One of the factors hindering the purchase process of customers is cumbersome and complicated payment procedures. You can also apply this know-how to your own business to enhance your customers’ buying experience.

6. Interact with customers

One of the ways to maintain relationships with customers, is to interact with them regularly at touch points. Do not forget to check the comments and messages of guests on Facebook, Instagram or on the blog. That’s the fastest way for you to win that customer’s heart.

>  Branding on Facebook

match with customers

7. Deliver quality content on digital platforms

Many people decide to buy because they find useful information through content on the Internet. If you truly provide quality, informative content, skillfully integrate outstanding features in your products, customers will not hesitate to withdraw their wallets and become loyal “gods” of your company. you for the rest of your life.

8. Understanding the customer’s problem

No matter how great your product is, it certainly won’t solve all the problems your customers are having.

understand the customer service

Therefore, you must be the one to understand the problems that customers are having, solve them through exchange, guidance or perfect the product according to the wishes and desires of the customer. Noticing your enthusiasm, guests will continue to come back in the future.

9. There are incentives for old customers

Old customer loyalty programs, sounds simple, but their impact is huge on Customer Retention.

You don’t have to design too grandiose promotions  , just meeting  the exact  needs and aspirations of your loyal customers is enough. They want a discount, give it a discount. They want luxury gifts, give them just that.

10. Ask and get Feedback

Receiving feedback from customers has two purposes:

  • Show that your business values ​​the voice of your customers.
  • Discover what customers think and feel about your business’ products.

customer feedback

Learn how to ask questions and collect surveys from customers through  Market Research with Malu.

11. Provide customers with Upsell – Cross-selling package

Upsell and Cross-selling are two sales tactics to provide customers with more advanced service packages, or provide complementary products to help use the main product / service more effectively and completely. .

Many people think that Upsell and Cross-selling are merely tricks for businesses to take advantage of profits. However, the main purpose of these two methods is to help customers have a better experience from the product, improve customer satisfaction and make them return to buy again in the future.

>>> Learn more:  Applying Upsell and Cross-selling in sales

12. Perform A/B . test

Putting theory into practice requires constant trial and error.

Maybe you think that constantly emailing loyal customers will keep them coming back to buy? It may or may not work at all. Only by trying can you be 100% sure.

ab testing

In addition, to improve the user experience on the Website, you also need A/B testing to arrange the elements to bring the highest traffic and conversion rate.

Some successful examples of effective customer retention

Many businesses apply the above secrets to their business activities. And it really worked!

For example, the case of  Marriott , a business providing luxury customer accommodation services, has linked up with many partners to offer special, one-of-a-kind offers exclusively for patrons. The program, called Marriott Bonvoy, applies to 6,700 Marriott properties, in 130 countries and 29 brands globally.

toms help customers

Or in the case of TOMS, a shoe manufacturing business. The company has an interesting way to retain customers: For every pair of shoes a customer buys at TOMS, the company will donate another pair to disadvantaged people around the world. This proves that TOMS is very interested in building a friendly, ethical and responsible brand image.


Retaining customers is not an easy job. However, if you know how to use the right strategies, this can help your business grow in a sustainable and lasting way.

The most important thing you need to do is to understand the needs of your customers, and meet all their expectations and desires through interacting and taking care of them at every touchpoint.

Hopefully the information Malu has just shared will be of great help to you in retaining customers, enhancing brand value and optimizing the benefits of your business. Good luck!