5 Customer Retention Tactics Marketers Don't Want to Share With You

More customers mean more business. Intuitively, it makes sense. And indeed, the world's largest businesses have millions of customers.

But how long would those businesses last if they couldn't hold on to existing customers?

About five minutes. And that's why customer retention is absolutely as important as customer acquisition, if not more so.

What's more, retaining an existing customer provides better ROI than acquiring a new customer. A loyal customer brings higher value in the long run than a one-off buyer.

Return buyers are also more likely to provide testimonials and case studies that help you market your wares to others. This last point is just as valid whether you happen to sell running shoes or design collaboration software - everyone needs social proof.

And did you know that 80 percent of sales come from 20 percent of your existing clients (the Pareto principle)?

Focusing only on acquisition is like drawing water from a well without checking if your bucket has a hole in the bottom. That can mean a lot of money spent on sales teams, paid advertising, and outbound call center services, with little return.

This isn't to say that acquisition has no place in your business. It's a vital part of the growth cycle. The question is: Where are you in that cycle, and how should you ensure all your customers stay for the ride?


Who needs customer retention, and when?

The longer your business has been around, the more customers you will have accumulated. On the other hand, a brand new business may not have acquired any customers yet. 

How heavily you market to existing customers depends on how many customers you currently have and their typical lifetime value. The higher the customer lifetime value, the more the business has to gain from a customer retention strategy.

Let’s take an example. Which of the following do you think will benefit more from customer retention?

The answer has to do with frequency and retention - how often the customer buys from you, and how long they tend to stay with one provider. That’s why local services like lawn mowing and car cleaning often have the highest customer lifetime value. Because if you offer good service and your customers don’t move to a different neighborhood, you’ve got their business for life.

But this still leaves the question of how to market to your existing customers. If you get this wrong, you might even risk driving existing customers away — a devastating mistake for your profitability.

That's why we're going to dive into five proven marketing techniques for customer retention. With the right application of these processes, you're sure to engage and delight your customers for maximum lifetime value.

1. Hair-trigger those emails

This tactic sits at the nexus of customer-centric messaging and marketing automation. 

The principle is that your customer journeys consist of set points where customers are receptive to certain messages.

By reaching out to individual customers with the right messaging at just those points in the journey, you maximize your marketing impact. This also helps overcome buyer journey friction.

To do this you need to:

  • Define the critical points in the customer journey
  • Craft a compelling marketing message for those points
  • Set up triggers that send the appropriate email to customers when they touch each point

As well as cross-selling and up-selling, this email automation tactic also works a treat for keeping customers on board. 

Let's say you're a company that provides auto-dialing solutions for call centers. First, you'd want to define a certain period of customer inactivity that suggests they might be falling away. When a customer passes that limit, you'll set up an automated email with information on how to get more from your product or service. 

For example, you might send a reminder of the pros and cons of speed dialers vs. auto dialers. You could even offer a free consultation or Q&A session as well.

Depending on your business model, you can also automate emails to go out for customers' birthdays and special days of interest. A small personal touch goes a long way!

2. Reward customers for loyalty

A customer loyalty program is a series of incentives that you offer to returning customers over time. 

By encouraging customers to stick around, you increase their lifetime value. Meanwhile, your customers get to take advantage of special offers and rewards. 

There are many psychological tactics that marketers can use within customer loyalty programs. One such tactic is exclusivity: Making customers feel that the loyalty program is an exclusive club. Another tactic is appealing to customers' love of thriftiness - give them a special account where they can watch their rewards accrue. 

That's the beauty of customer loyalty programs: They're a win-win for you and your customers. This principle stands behind some of the most successful brand strategies.

Taking it a step further, you can also gamify the loyalty program by splitting it into tiers. At the lower tiers, customers might benefit from a birthday gift and seasonal savings. At the next tier, they might get a special brand experience as well. And at the highest tier, you can give them insider access to events and early ordering privileges.

It’s possible to automate a loyalty program by measuring the actions that your customers take, and setting up the rewards accordingly. So, if your product were design collaboration software, you might add automated loyalty points when customers:

  • Purchased or subscribed to the software
  • Upgraded their subscription for extra features
  • Referred someone to buy your software


3. Maintain the relationship

It might sound corny, but marketing really is about forming relationships. You know those moments when you realize it's been five years since you spoke to so-and-so from high school? That isn't an ideal place for your business to be. By the time you realize it's been a long time, your customer is long gone.

This brings us back to our trusty marketing tool: the email. Despite new-fangled alternatives like push notifications or Facebook groups, email marketing is still the most reliable medium for customer engagement and retention. The average conversion rate for email marketing in 2021 was 14.65%.

For email marketing to improve customer retention, each email has to add value to your customer's experience. That means knowing what each customer wants and delighting them with the right tone, timing, and offers. 

It's all about segmentation and personalization. Let's say your product is remote team collaboration software, for example. There's little value in sending an email to your existing customers about Basecamp alternatives because they've already chosen your alternative. Instead, you could send them a list of handy tips to get the most out of your software.

4. Share the excitement

Everyone likes a good story. And every story includes a protagonist who wants to reach a goal. But to get there, the character has to face obstacles and evolve in the process.

And this is just like your business. You're pushing and innovating to provide an ever-higher standard of products and services. It's a truly inspirational tale!

Guess what: this is also a story your customers want to be part of. Buying isn't just a transaction for them — it's an aspect of their narrative, the voice of the customer.

So why not share your enthusiasm? It's all about showing how your product or service is helping to achieve bigger and better things. You might want to highlight the customer benefit or describe how your social responsibility initiatives are bearing fruit.

You can also offer enticing "sneak peeks" into your latest and greatest innovations. These don't have to be brand new products or services either. If you run sales workshops for call centers, for example, you might share a list of your latest phone sales tips

Ultimately, the focus should be on how your evolution helps your customers increase their gains. With that kind of narrative in their minds, customers tend to stay for the long run.


5. Surpass their expectations

In relationships, predictability has its benefits: stability, trust, familiarity. But when there are never any surprises, things can get uninspiring. If the relationship stagnates for too long, you'll find your customers' net promoter score dropping.

Just as in romance, you can liven up your customer relationships with a dash of the unexpected.

The point of these surprise gestures is simply to show customers you appreciate them. It's natural for humans to want to reciprocate. If you treat someone nicely out of the blue, they feel bound to return the favor in some way.

What you give away depends on your business and the relationship you have with that customer. A long-term loyal customer might warrant a high-value gift, while a new customer might get a complimentary extra with their first purchase. Ultimately, it's the thought that counts. You just have to choose a gift that's meaningful to your brand and the customer.

Recap: Retention, retention, retention

The techniques covered here take some planning, testing, and orchestration to get right. Here's a quick recap of the five strategies:

  1. Automate and personalize messaging
  2. Create customer loyalty programs
  3. Maintain relationships through email
  4. Keep customers involved in your success
  5. Use the element of surprise

The results of these retention techniques are absolutely worth the effort. Remember the principle which says that 80 percent of sales come from 20 percent of clients. This means that by retaining just 5 percent of customers in that 20 percent, you're protecting 20 percent of your total sales.

So if you’re looking to effectively boost profits, look at the customers you have now and focus on creating the best possible customer experience. When it comes to customer retention, it’s all about loyalty by nurturing the relationship in the most personal way possible. Look at what you’re offering your current customers and ask yourself - are we doing enough to keep them happy? 

Then, roll up your sleeves and get to work. Creating and maintaining a good customer loyalty program is difficult so remember to stay flexible and put your customers first. Keeping that in mind can already keep you leagues ahead of the competition.

About Lean Labs

The only outsourced growth team with a track record of 10X growth for SaaS & Tech co's. 🚀

Discover the Hidden Strategies We Use to 10X Our Clients Growth in 36 Months!

The Growth Playbook is a FREE guide to planning, budgeting and accelerating your company’s growth.