Free Trial Login
Marketing • May 20th, 2020 • Guest Writer

Why Customer Retention is Essential to Your Brand’s Success

Understand the importance of a systematic customer retention strategy and drive significant value to your brand.

Developing A Systematic Customer Retention Strategy

If you want to maintain a successful brand, it is crucial to have a healthy relationship with your customers. In fact, the cost of acquiring a new customer is up to 10 times greater than the cost of retaining an existing one.

Furthermore, repeat customers spend 67% more than new customers. A higher customer retention rate leads to improved customer advocacy and customer loyalty.

But even though it pays off significantly to focus on customer retention, many brands are not taking full advantage of this. If you are still wondering, “why customer retention?”, let’s explore the full value it has for your brand.

Balancing Customer Retention and Customer Acquisition

In a survey conducted by Invesp, around 44% of businesses admitted that they “have a greater focus” on customer acquisition. In comparison, 18% of businesses focus more on customer retention.

Rather than focusing on retaining and engaging their current customer base, most brands prefer to focus on attracting new leads. So, what is the reason behind this discrepancy?

Part of it may be the fact that prospects are at the top of your sales funnel. This is where the buyer’s journey begins. But this is also the stage when they are still exploring and discovering options at this early stage.

There is still a long way to go to the final purchase. Compared to your current customers, these individuals have a much higher barrier to entry. And, let’s not forget, focusing on these new customers costs more. If you want to grow your brand, you cannot ignore one of it’s strongest assets—your satisfied customers.

todo work done

More Purchases

Before a new lead makes a purchase, it usually takes a few interactions with your brand. If you want more revenue, it makes more sense to count on continued visits from repeat customers.

Let’s take e-commerce stores as an example. Just 8% of customers of an e-commerce store contribute 40% of its revenue. It’s the same with bricks and mortar stores. Your most loyal customers have a higher lifetime-value (LVT) for your business.

By incentivizing loyal shoppers to return, you can capitalize on higher revenues brought in by them. For instance, you can start a loyalty program that includes freebies or generous discounts based on the amount spent or the number of purchases.

There’s the option of sending targeted emails that highlight services or products that are related to their interests or previous purchases. You can also leverage the power of print marketing to earn repeat business and retain customers. Items like free swag and personalized “thank you” cards can go a long way.

Repeat Customers Help Bring In New Customers

Your loyal brand followers can be the most compelling force behind customer acquisition. An army of happy, repeat customers beats even the best marketing campaign.

People will always trust family and friends more than they trust ads. You can count on your most loyal customers to share their experience with others. Your repeat customers are your biggest brand advocates.

The more purchases they make and the better the experience they have, the more likely they’ll be to tell others about your products or services. You can encourage this process by setting up a referral program.

Holiday Success

Special sale days and holidays throughout the year represent a significant portion of the revenue of an average B2C brand. Many businesses earn the most during the end-of-the-year holiday season.

Furthermore, the aforementioned report by Adobe found that, during the holidays in America, purchases from returning customers increase by 22% to 30%. In Europe, that number is 23%. When it comes to new customers, the increase in purchases during the holidays is 17% in America and just 4% in Europe.

As a business owner, you can take full advantage of this by offering special holiday offers to repeat customers. For instance, you can give them early access to Black Friday deals.

Market Insight

If you want to learn more about your target audience, your repeat customers are the best source of information. To get a better understanding of how and why your leads become your customers, you can study the purchasing patterns of your best customers.

By studying your repeat customers, you can learn which types of consumers are most likely to use your products or services. They can help you discover the formula for creating even more loyal brand enthusiasts. It is also much easier to cross-sell to existing customers than to new ones.

They can help you find out what products are missing from your line up. By collecting regular feedback from repeat customers, you can improve products as well as product recommendations. You can use the feedback from your repeat customers to improve your business overall.

When it comes to making improvements to your policies and procedures, repeat customers are your best sounding board. If they notice some flaws in your business, they are more likely to go directly to you than to vent their frustrations online.

lady looking at documents customer retention

Loyal Customers Pay Premium Purchases

Your loyal customers value your business. They are willing to pay premium prices for your products or services because of that. Repeat customers trust that you will deliver better quality for the prices you charge. New customers are usually much more price-conscious.

Reduced Marketing Costs

As mentioned, it is cheaper to work on keeping your current customers than on gaining new ones. Reduced marketing costs are one of the main reasons behind this.

When you have a large base of loyal customers, you can spend less money on advertising your products and creating brand awareness. It’s easier to introduce new products or services to old customers.

If you have many customers that are already familiar with your products and services, you won’t need to spend as much money on customer support. You can also count on repeat customers for free word-of-mouth advertising.

What You Need to Increase Customer Retention

Now that you know why customer retention is important, it’s time to learn how to achieve it. There are a few ways you can earn repeat business, loyalty programs and freebies being some of them.

But, if you really want to make sure your customers will stick with you, you need a systematic approach. To kick start your customer retention efforts, you need the following:

Retention Strategy

To achieve the goal of retaining customers, you need a plan designed specifically for this purpose. For example, this plan can revolve around booking your referral marketing or improving customer experience. Keeping clients so they spend more can also be a retention strategy.

Retention Tactics

To achieve your retention strategy, you need to employ retention tactics. These are specific acts or actions carried out with the goal of increasing customer retention. For example, checking in with customers a couple of weeks after their last purchase can count as a retention tactic.

Retention Tools

To carry out customer retention functions, you need retention tools. These tools can include gamification mechanics such as points, earning badges, leaderboards, etc. Live chat can also be considered a retention tool.


From free word-of-mouth advertising to providing invaluable feedback, repeat customers can drive significant value to your business. The right customer retention system will set up your brand for success. Now that you know the importance of customer retention, you can start finding ways to leverage its benefits.

Jennifer Wilson is a writer at She knows business processes and operations management inside out. As she understands all the challenges of running a small business firsthand, it’s her mission to tackle the topics that are most relevant to entrepreneurs and offer viable solutions.

Really Simple Systems is now Spotler CRM

The same great technology, a CRM platform that is focused on the needs of B2B marketers, provided by the same great team, at a great price!

Learn more

© 2020 - 2023 Spotler CRM