How To Retain Customers

How to Retain Customers 

Every business or establishment is concerned about growth and how to retain customers.

This is because all businesses are obviously set up to provide services and products to individuals or groups of individuals known as customers.

Therefore, it is safe to say that customers are the understructure through which a business is formed.

However, to ensure that these understructures stay in place and multiply, certain measures need to be put in place to ensure the stability of these structures.

One of these methods is customer retention.

How to Retain Customers – What is Customer Retention?

As the name implies, customer retention is the process of appealing to existing customers to ensure the continuous patronage of your products and services.

It could also be defined as the various strategies and methods that expand the number and profit of pre-existing customers in a business.

Additionally, customer retention involves achieving continuous patronage from a customer and the business or company’s ability to retain its customers over a long period of time. 

The Importance of Learning How to Retain Customers 

Customer retention plays an important role in the growth and productivity of every business.

Customer retention promotes customer loyalty. Hence its importance.

Here are other importance of customer retention;

Increase in Profit

Customer retention brings about an increase in your business’ revenue and profit.

This is because customers who constantly patronize a business tend to spend more on purchases than prospective customers, which equals profits.

Building Customer Relationships

Another importance of customer retention is that it helps businesses build and foster customer relationships.

These relationships are integral to your present and company’s growth and expansion. 

Reduction in Expenses used for Marketing and Acquiring New Customers

Acquiring new customers for your business costs more money than retaining pre-existing customers.

Pre-existing customers are well aware of your products and services.

Hence, it would be easy to put certain strategies and improvements that help retain them.

Gaining new customers involves a lot of marketing and advertising, which will incur some expenses.

Improvement in Business or Brand’s Reputation

Brands and businesses have the opportunity to improve and boost their business and brand image through customer retention.

This is because customer retention involves certain levels of customer service that appease customers.

Acquiring New Customers

Loyal customers help businesses and brands acquire new customers by providing feedback that helps businesses improve on their products and services.

Existing customers also spread positive words about your business to people around them.

Thereby helping your business to attract new customers.

Predicting the Needs of Customers in the Future

Determining your clients’ future or current needs can be quite difficult without any form of a customer relationship.

This is why customer retention is essential to every business.

It helps you predict and meet your clients’ future needs through conversations, feedback, and complaints.

Increase in Lifetime Value

Additionally, customer retention increases customer lifetime value. 

Lifetime value is the monetary value of loyal customers to a business.

When you strive to build customer retention, you stand a chance of gaining customers who will become lifelong assets to your business.

Why It’s Difficult For Most Businesses to Retain Its Customers

As businesses strive to ensure that they retain customers, it is also essential to consider several things and factors that can lead to the loss of loyal customers.

Some of these factors are;


This is one of the reasons customer retention becomes difficult for most businesses.

Unavailability is being irresponsive to the needs and questions of your customers.

This shows disregard for your customers and makes it difficult to retain them.

Hence, businesses should strive to respond to their customer’s calls and provide them with the necessary information and solutions promptly.

Poor Products and Services

Another reason why it becomes impossible for you to retain your customers is when you offer substandard products and services to your customers.

Customers can only continuously patronize businesses whose products and services meet and exceed their expectations.

Lack of Transparency 

One of the most common ways to lose your customers is through a lack of transparency.

Lack of transparency is when customers are provided with inaccurate information about your products, services, business, and costs.

Lying to a customer by promising them and not keeping to your promises.

In all, such actions make it very difficult for you to retain customers.


When your business is not professional about its dealings, you cannot retain customers.

Unprofessionalism could be lacking the required qualification, knowledge, and skills to do a job.

It could also be in terms of a lack of adherence to the work codes of conduct and ethics.

Incompetent/Poorly Trained Staff

How staff’s competency level also plays an essential role in customer retention.

Competent staff can answer the questions and inquiries of your customer effectively.

On the other hand, incompetent staff would not handle their job effectively or appropriately solve customers’ problems.

Likewise, poorly trained staff could also talk to customers rudely and disrespectfully.

Above all, when your members of staff incompetent and rude, rather than retaining customers, you would lose customers.

Zero Communication and Customer Relationship

Companies or businesses lose customer retention due to a lack of communication between the business and its customers.

Every business should strive to maintain a certain level of communication with its customers.

Communication could be in the form of feedback.

It could be regular updates, newsletters about your products and services via communication channels such as emails, text messages, websites, social media platforms, newsletters, etc.

This strengthens the relationship between you and your customers and improves customer loyalty.

Inadequate Operating Hours

Businesses often lose customer retention due to their inadequate operating and working hours.

When your working hours are such that your customers cannot reach you when they need your products/services, they look out for similar businesses or brands to patronize.

Complicated Business Procedures/ Unfriendly Policies

When acquiring your products and services becomes too tedious for your customers, it will lead to bad customer retention.

Also, when your business policies do not benefit customers (e.g., no returns or no refund policies), customers will find it hard to consistently or continuously patronize you.

Lack of Consistency

Businesses also find it difficult to achieve customer retention due to inconsistency in their products/services.

Inconsistency in the quality of your products and services makes it difficult for your customers to trust what you have to offer.

Thereby making it difficult to achieve brand loyalty and customer retention.

Not Fulfilling your Promises to your Customer

When your products or services constantly do not meet your customers’ expectations as you promised, you’ll lose them.

Also, when you do not deliver the products and services your customers requested at the time you said you would, you leave your customers feeling unhappy and disappointed.

Therefore, making it difficult to retain customers.

Your Products and Services do not Add Value to Customers

When customers pay you or patronize you, they expect to receive the value of their money’s worth. 

Meaning that whatever you offer them, be it products or service, must meet up to their standard and expectation.

If your delivery does not equal your prices, customers will look out for other available options.

Not Considering Feedbacks

Feedback could be positive and negative.

Often, negative feedback and complaints help businesses and companies improve their products and services.

Businesses that do not consider their clients’ feedback cannot produce goods and services to satisfy their clients.

Also, you cannot retain customers who feel dissatisfied with your products and services.

How to Retain Customers – 11 Proven Ways to do this

You can achieve customer retention using certain tactics and techniques.

These techniques help you to form a good customer relationship that can, in turn, lead to customer retention.

Good Communication and Engagement with your Customers

The way to retain a customer is to build a consistent customer communication relationship.

A lack of communication between you and your customers can put a strain on patronage.

This is because customers can only trust and do business with those they can effectively communicate with.

In all, effective communication with your clients keeps the communication line open to give them the latest information about your products and services such as promotions, discounts, new products, sales, etc.

Thereby enhancing customer retention and increasing profit in business.

Understand Your Client’s Needs and Problems

A great way to build customer retention is to understand your customer’s needs and problems.

Marketing campaigns and customer feedback are great ways to help you understand your customers better.

An understanding of their needs helps you produce goods and services that would guarantee customer retention.

Proper Training of your Customer Service Team

To avoid losing customers, you must invest time and resources in training your customer representative team on the best way to interact with customers, gain their trust and ensure customer retention.

This could involve teaching them the right and appropriate manner and languages to use when interacting with customers.

Additionally, it could entail helping them understand and implement new customer retention tactics in their daily interactions with clients.

Accept and Apologize for Faults and Mistakes

Another reason customers would continuously patronize your business or brand is to have a good and positive reputation.

While you strive to retain customers, ensure that you take responsibility when problems arise and apologize to the customer involved.

This helps to build a solid brand reputation that promotes customer retention.

Responding to Customer Needs on Time

Another way to promote customer retention is to ensure that your customer service team is always on the customers’ beck and call, responding to questions, complaints, and orders as swiftly as possible.

Initiate a Customer Loyalty Program/Scheme

Customer loyalty programs involve rewarding customers that frequently patronize your business or brand.

This helps to keep customers happy and satisfied, as they can now enjoy other benefits other than the goods and services they purchase.

As a result, helping you build trust with your customers and encourage continued patronage.

Keeping to your Words and Promises

Keeping your words not only helps you retain customers but also shows your level of professionalism.

Businesses who deceive or do not keep to their promises tend to lose their customers.

Stick to Competitive Prices and Cost of Goods and Services

It is worth noting that customers will likely stick to businesses and companies whose prices and costs are competitive, that is, within the benchmark or average cost rather than those with high cost.

Even more, at some point, they stop patronizing such businesses due to the high cost of products and services compared to other businesses (competitors) that offer the same products/services.

Hence, it’s best to stick to the competitive price without compromising quality to achieve customer retention.

Quick Delivery

Customers are encouraged to patronize businesses and brands that deliver their products and services quickly and effectively.

Frequent delivery delays might prevent them from continuously doing business with you.

Dealing with Customers on a Personal and Individual Note

In addition to achieving customer retention, businesses must endeavor to relate and engage with customers personally.

This is done by addressing customers using their names, remembering their birthdays, sending them messages, and offering them products and services that would be good for them based on your research and feedback on your products and services.

How to Retain Customers – Some Ways to Measure Customer Retention

As we stated earlier, customer retention is a method used by businesses and companies to retain customers after a specific period.

These methods can be measured to see if a company is successfully achieving a customer retention rate.

Some of these methods include;

Upsell Conversion Rate

Upsell conversation rate is a method used to monitor the number of purchases made by customers which exceed their first purchase.

It also measures the percentage of customers that make additional purchases.

Upsell Conversion Rates is calculated as;

Upsell Conversion rate= total number of conversions ÷ total number of visitors × 100.

Customer Churn Rate

The customer churn rate is also known as CCR.

This is the rate at which customers stop patronizing a business.

It shows the number of customers your business acquires and loses over some time.

This is calculated as; Customer Churn Rate = Customers at the beginning of the month/week — Customers at the end of the month/week ÷ Customers at the beginning of the month/week.

Customer Retention Rate

The customer retention rate, abbreviated as CRR, is a metric used to measure customer loyalty.

It measures the number of customers that patronizes a business or company over a stipulated period. 

Customer retention rate is calculated by recording the number of customers you have over a period; (which could be in weeks, months, and years)

After that, subtract the number of newly gained customers from the number of pre-existing customers, divided by the initial number of preexisting customers, multiplied by 100.

Customer Lifetime Value

Customer lifetime value represents your customer’s total expenses on your business, products, and services during their lifetime.

 Lifetime Value = Average Value of Sale × Number of Transactions × Retention period.

Repeat Customer rate

Repeat customer rate is the percentage or portion of customers who have made at least two or three purchases of your products and services on your site.

Customer repeat rate can also be defined as the number of customers who return to purchase after the first one.

There is no specific time calculation to this; it could even in the space of a few years. 

Calculating Repeat Customer rate involves;

Repeat Customer rate= Sum total of repeat customers ÷ sum total of paying customers.

Final Words on How to Retain Customers 

Customer retention goes beyond offering goods and services.

It also covers prices, costs, customer loyalty, customer relations, feedback, value, and customer experience.

It is a technique that businesses, brands, and organizations must improve upon to achieve their goals and objectives.

This will as well keep their business thriving and excel in the midst of competition.

This article is a perfect guide for businesses that hope to retain their customers and grow their businesses.