Tips to Increase Customer Retention in Your Business


Jul 15, 2021 • 5 min read

Tips meningkatkan customer retention pada bisnis Anda

When starting a business, every business owner would want to acquire as many customers as possible to boost revenue. However, businesses soon realize that it’s more valuable to retain the customers they already have, which is also known as customer retention. As this awareness increases, retention marketing has now become the focus of many businesses.

Looking at your own business, have you retained the customers you have or are you still unsure how? Read on to learn about retention marketing as well as tips to increase customer retention in your business!

Understanding retention

Customer retention is making customers stay loyal and keep doing business with you. Retention is considered more important than acquisition because 25-40% of business revenue comes from existing loyal customers. Moreover, just by increasing customer retention by as much as 5%, businesses can increase their profits from 25 to 95%. Thus, the higher your customer retention rate, the more profits your business will have.

Unfortunately, many businesses do not know how to improve their customer retention rate. Here is what you can do to build customer retention with retention marketing.

Building customer retention with retention marketing

Retention marketing is marketing your business to your existing customers. There are some ways to do this and build retention, such as:

  1. Loyalty programs

    Loyalty programs are a highly attractive retention marketing strategy. Research by Bond finds that 79% of customers agree that loyalty programs keep them coming back to a business. Loyalty programs motivate customers by giving points or rewards.
  2. Exclusive programs

    Another retention marketing technique you can try is creating an exclusive program for customers who agree to pay a certain amount to enjoy exclusive benefits. Customers love exclusivity and gaining privileges that regular customers do not have. For example, you can create an early access pass for your newest product exclusively for customers who shop for more than a certain amount for a month.
  3. Email marketing

    Email marketing also remains a powerful retention marketing strategy. Sending emails to customers lets them keep remembering your business. You can send them an attractive newsletter containing the latest updates and relevant offers.

Next, what are the factors that influence the success of your customer retention strategy? Let us take a look below.

Factors affecting customer retention

Although your retention marketing program is highly attractive, there are some factors you need to consider to ensure a high retention rate, such as:

  1. Customer satisfaction

    Undeniably, customers will not bother to return if they are unsatisfied with your product or service. Thus, it is important to maintain consistent quality in your business. You can also give out customer surveys to evaluate their satisfaction and identify areas in which your business needs improvement.
  2. Trust

    Customers need to trust in a business and feel that a business won’t harm or cause a loss on their side. Be transparent and nurture a strong relationship with customers to build and maintain their trust.
  3. Commitment

    In this modern era, customers do not hesitate to switch brands until they find one which is most beneficial to them. If they are satisfied with your business and trust you, rest assured they have a strong commitment to staying in your business.

All these factors determine how high or low your retention rate is. Do you know how to calculate it?

Calculating retention rate

To calculate retention rate, you can use this simple formula:

[(Existing number of customers at given period – New customers) / Initial number of customers] x 100

If you have a positive result, congratulations! Your retention rate is increasing. If not, or if you’re still unsatisfied with the figures, here are some tips you can do to increase customer retention.

Tips to increase customer retention

  1. Identify the causes of customer churn

    The easiest way to increase retention is to prevent the opposite: customer loss or customer churn. You can anticipate this by studying their purchase behavior and transaction history.
    There, you’ll see ‘warning signs’ of customers who are more likely to leave your business, for example, if they haven’t shopped from you for a few months. You need to do some follow-ups to ensure they stay in your business. You can do so through email, SMS, or sending them to push notifications to alert them about your ongoing offers.
  2. Give the best rewards to the most profitable customers

    Your most profitable customers are those who buy the most often, master your products, and don’t hesitate to be your advocates. Identify them and go the extra mile to honor and value them. Give exclusive rewards to keep them loyal and keep bringing you the highest profits.
  3. Do personalized follow-ups

    The more you know your customers, the easier it is to approach them with personalized offers best suited for their needs and preferences. When you give them relevant offers, they will feel more understood and become more loyal to you.

Are you ready to increase customer retention through retention marketing? TADA is happy to help you get to know your customers better and make them more loyal! Contact us to start today.

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Nida Amalia

SEO and Content Marketing Specialist who loves art, music, and movie.