A customer retention program can build loyalty and increase your company's profits.
Customer retention program on the left, circles with silhouettes of people in the center and arrows around indicating churn or retention
On this page
What is a customer retention program?
Why is a customer retention program important?
6 strategies for a customer retention program
8 Metrics to Evaluate Your Customer Retention Program
Frequently Asked Questions About Customer Retention Programs
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In the Middle Ages in Europe, loyalty was a pretty canada telephone numbers serious matter: subjects, called vassals, would kneel and swear allegiance to their lord, or king, who would accept the oath by covering the vassal's hands.
The symbolism is clear: "You take care of me, I'll take care of you." Although loyalty could be forced, it was still a form of loyalty.
Today, customers can easily choose who they buy from, and that loyalty must be earned. But how do you build long-term relationships with customers to keep them coming back? It all starts with exceeding customer expectations.
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Acquiring a new customer can cost five to 25 times more than retaining an existing customer. Improving customer retention offsets the initial acquisition costs. But none of this works if you can't retain customers.
What is a customer retention program?
Customer retention involves transforming new customers into repeat customers. A customer retention program implements various strategies to improve customer experiences , increase engagement, build customer loyalty , incentivize repeat purchases, monitor customers at risk of leaving for competitors, and analyze why dissatisfied customers left.
These customer retention strategies include loyalty programs, referral programs, personalized emails, special offers, and customer onboarding improvements.
An effective program understands customer needs, re-engagement, and offers incentives to encourage repeat business. Retention programs that work well increase the rate of repeat customers. Additionally, existing customers tend to generate a higher average order value per visit.
How do you know they're working? By measuring customer activity. Retention program metrics can identify customer needs, expectations, and issues.
Why is a customer retention program important?
Customer retention programs are crucial for businesses to be profitable, increase revenue, maintain customer loyalty, and acquire new buyers.
The cost of retaining customers is five to 25 times lower than acquiring a new one. However, it can take time to see results.
In the short term, the initial costs of a retention program may seem like a burden. But in the end, as customers begin to generate repeat business, retention becomes more cost-effective.
And then there's the word-of-mouth factor: loyal customers share positive experiences with others who become new customers, which can also reduce acquisition costs.
Satisfaction doesn't always mean retention
While it's hard to imagine a returning customer who is n't satisfied, it's a mistake to equate customer retention with customer satisfaction. Customer satisfaction is a passive relationship.
It suggests a positive experience (good sale, happy with the product), but it doesn't guarantee that a customer will return. If the competition offers a better deal, some customers will leave. This is where the need for customer relationship management comes in.
Retaining existing customers requires active, reciprocal relationships. If you treat the customer well, keep re-engaging, and understand their expectations, a satisfied customer will become a loyal customer.
If you have a Shopify store, you can improve retention rates by creating customer groups based on customer engagement, or lack thereof. From there, you can use these groups to run email automations to re-engage customers or visitors and turn them into retained customers.
6 strategies for a customer retention program
Post-sale education programs
Customer loyalty programs
Incentives
Referral Programs
Customer Reviews
Marketing Automation
An effective customer retention program includes these six tactics: