5 Tips To Increase Customer Retention Rate

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A key tactic to keep revenues going up is to develop a customer retention strategy. 

Customer retention is a cost-effective strategy. It is much cheaper to interact with existing customers than following the process of identifying, qualifying, nurturing leads, and hopefully converting them.

On the other side, if you invest your energies in keeping your existing customers, you turn first-time buyers into loyal ones. Then, these loyal shoppers tend to refer your products to their friends.

To measure your efforts, you can calculate the customer retention rate with this formula:

# customers at the end of the time period – # of customers acquired during the preiod # of customers at the start of time preiod x 100

Through this formula, you can identify if your efforts in customer retention are successful. If you think your customer retention rate needs a boost, here are five ways you can do it. 

1. Customize pricing for returning customers

Adjusting your pricing is an effective tactic to keep customers purchase from you again and again. Such measures include the “next purchase discounts” you send via email the moment the customer purchases from you. Another example is offering free shipping and returns that will incentivize the customers to purchase again. 

2. Use upselling and cross-selling strategies

Cross-selling encourages the customers to purchase other products incorporated with the primary merchandise the customer came to buy. While upselling motivates the customers to buy an upgraded or premium version of the initial purchase. 

These tactics are valuable when used to keep customers buying more. However, if you run an online business, you need to pay close attention to the sales data and try to find answers to the following questions:

  • What are two of more products customers buy in pairs?
  • Which products complement each other or are more helpful when bought together?
  • Which items have premium/upgraded features that you can promote?

Empowered by data, you can use the combination of these products to retain your existing customers. 

3. Develop a customer loyalty program 

With a customer loyalty program, you reward current customers for interacting with your business. This program can come as a point system develop for every purchase, or giving them bonuses for reviews your products, referring a friend, or sharing on social media.

With such a mechanism set in motion, you make it harder for the customer to buy from your competitor.

When designing your customer loyalty program, try to make it simple. A complicated program is hard to understand by customers, and as such, they have a hard time trusting it. 

4. Provide a recurring subscription 

A simple yet effective way to boost retention is by incorporating a subscription option.

You can create a flexible subscription (such as monthly or quarterly) that serves your customers’ wants and preferences. This tactic will keep customers in the loop of buying from you. 

If you don’t have products that you can sell with a subscription model, you can sell add-ons such as insurance and on-retainer customer support.

5. Meet customers where they are

There is no better way to retain customers than to analyze and understand them. If you pay close attention to know who they are, what challenges they have, how they use your products, and which platform they spend their time on, you can meet them where they are. 

For example, you can create content (such as a blog post or a video) that speaks to their needs and share it with the channel they use frequently.

Implementing such a strategy will keep you ahead as your customers will have continuous support from you, even when they don’t know they need such help. This way, you prove to your customers that you understand and appreciate them. 


Customer retention can help you accelerate your business efforts. When you focus on keeping existing customers purchase again, you spend less money and energy. By analyzing the data and feedback of your customers, you can develop cost-effective strategies that turn first-time buyers into loyal ones.

Osmos Cloud


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