8 Customer Retention Strategies for 2021


In 2021 it’s no longer enough for brands to rely on customer acquisition alone. With the rise of eCommerce and an increasingly competitive marketplace, retaining customers has become just as important. It’s crucial that businesses are proactive with their retention strategies now in order to prevent a decline in revenue later on down the line.

In terms of how to retain customers though, the landscape has changed. It’s no longer just about providing good products or services; customers are now looking to receive an experience that they can’t get anywhere else, and so this is what businesses must be striving to deliver. 

That’s why we put together this list of 8 customer retention strategies you can start implementing today to increase your chances of retaining your most valuable customers through 2021 and beyond.

What Is Customer Retention?

Customer retention refers to the collection of methods companies use to increase their number of repeat customers whilst increasing the customer’s profitability at the same time.

Customer retention strategies are designed to meet these objectives by extracting and providing more value from existing customers. This is done by ensuring they stay loyal to the business, have a positive customer experience and continue to do repeat business with the company.

Why It’s Important

In today’s world, customer retention is a key indicator of success. Companies in all industries are increasingly aware of how important retaining customers really is because they can’t grow without them – and with such a saturated market, competition for their loyalty has never been more fierce. 

Focusing on customer retention has been proven to pay off. On average, companies who prioritise customer retention have:

  • Saved costs by retaining customers. 82% of businesses state that customer retention is cheaper than acquisition, and have ceased spending so much on acquisition to instead focus on nurturing their existing customer relationships.
  • Increased their AOV (Average Order Value). Loyal customers are 23% more likely to spend with their favourite brands rather than find new ones, and will ultimately come to spend more as time goes on – especially if they are receiving good customer service in the form of loyalty programmes or discounts.
  • Boosted their profits. Data reveals that even increasing customer retention by as little as 5% can increase a businesses profits from anywhere between 25% to 95% – a significant number that can be the difference between make and break.

When to Focus On Customer Retention

Depending on where a business is in its lifecycle will depend on how much it should focus on customer retention. The below 5 business lifecycle stages can be used as a guide to determine how heavily your business should be investing in customer retention:

  1. Just begun: As a brand new business, your initial focus should be on growing a strong customer base and attracting new customers regularly. Focus more heavily on customer acquisition than retention at this stage.
  2. Beginning to grow: Your business has made sales and is beginning to gain traction, so it’s time to set up your marketing system for success. At this stage email campaigns that encourage repeat purchases from customers by offering discounts or coupons on their next purchase can be highly effective.
  3. Consistently growing: Your sales are increasing at a consistent rate. As your customer base has grown and you’re starting to see the beginnings of repeat customers, it’s the right stage to consider adding retention strategies like loyalty and referral programs into the mix.
  4. Established: As an established business you now need to find new ways to grow your customer base and future profits. Retention strategies introduced during this stage of the customer lifecycle can have a large effect on how much they spend, and how often. It’s important to implement retention techniques in order for your business not only to continue growing but also remain sustainable over time.
  • Well-established: As a well established business it’s time to invest heavily in customer retention to stay relevant. Start by revisiting the customer retention strategies that you’ve previously implemented. As an established business, your main goal is now finding ways for those who are already customers of yours to purchase more and become committed followers. With this in mind, it will be important when implementing new retention efforts at this stage- such as gifts with a value worth $5 or higher – they should not only entice but also provide incentives so that clients feel appreciated and loyal towards you!

Understand how retention fits in with your business

What type of industry a business is in will determine which customer retention strategy is most appropriate. For example, furniture retailers selling high-end leather chairs will have different business needs and objectives than a store selling tea and coffee.

To further our example, a store whose customers purchase high value items frequently, like expensive leather furnishings, would be wise to invest more heavily in customer retention strategies as their CLV per individual is much higher, and the opportunity cost associated with losing them makes it worth taking extra steps to keep these valued individuals around longer.

However, all businesses must keep in mind that it is not a case of choosing customer acquisition over retention, or vice versa – it’s about finding the right balance between both.

8 Actionable Customer Retention Strategies You Can Start To Implement Today

   1. Provide the best customer experience possible

Many companies assume exceptional customer experience can only be achieved through showy gestures. However, research shows the true driver of retention and loyalty is making it easy for customers to get a problem solved as soon as possible. 

This means consistently meeting expectations but also avoiding unpleasant surprises so they don’t feel like their voice is unheard or unanswered when something goes wrong. 

Further, on and offline events shape a customer’s experience and service as a whole, so ensure that your customer service is aligned across all your channels by making it a collaborative effort. You’ll want your customers to feel heard on every channel, journey touchpoint and in conversation topics outside of what may have caused them to contact you originally.

   2. Track churn metrics and signals

A customer churns when they abandon the company or service. The best way to reduce this is to figure out why customers are leaving and fix those issues. 

Customers can offer feedback through qualitative data, such as survey responses detailing their experiences with your product/service, while quantitative data collection can provide insight on how many people have left in a specific time period for what reason (ex: price). By analyzing these two types of information you can better understand trends that will help lower your rate of abandonment which increases retention rates overall.

     3. Leverage automations (trigger based emails, SMS etc.)

Companies often find themselves wondering how to handle inactive customers. Recent research has shown that trigger based emails have 5x higher open rates and 15x the click-through rate than other types of marketing campaigns, meaning you can capitalize on opportunities to build relationships with your customer base when they are at their most engaged.

If you are able to automate emails so that the right ones are sent at just the right times, there is potential for increased relationships and reduced customer churn as well as capitalizing on opportunities such as reactivating inactive customers with an “activation” email campaign. Combine this strategy with information from your CRM database (which includes details like their buying habits) and you’ll be able to create personalized messages that are more effective than generic marketing campaigns.

     4. Deliver highly personalized experiences

For a business to be successful, it is critical that they are able to offer the customer an experience tailored specifically for them. 

The Salesforce report indicates 79% of customers will share their information with companies that can provide a personalized journey. One way retailers could better connect with consumers is through the use of Customer Intelligence Platforms (CIPs). 

CIPs help businesses to gain deeper insights into their customers by identifying customers who visit the website. Businesses can then better understand who their visitors are, which other online behaviors they have engaged with, and receive actionable advice on what to do next, i.e whether to promote a specific offer toward particular identified customers.

   5. Start a customer loyalty program

Loyalty programs, otherwise known as customer retention schemes, are an effective way of retaining customers and increasing purchase frequency because they motivate customers to shop more often in order to earn valuable rewards.

This becomes a valuable exchange for your business and your customers: Your customers receive additional value from you each time, whilst you gain their repeat business. 

   6. Introduce a customer feedback loop

The customer feedback loop is a key component to retaining customers. It provides your team with an opportunity for collecting, analyzing and distributing reviews that are pertinent in order to retain customers. 

There are many ways you can collect this information, the most common way being through surveys or focus groups. However, there are other avenues such as conducting user testing for more specific insight into what will improve their experience on your site or app. Making it a regular habit of using several methods at once should provide enough relevant data needed by the whole business when deciding how best to allocate resources where they’re needed.

For example, product reviews can be sent to development teams so that potential product design issues could be addressed. By using a system of collecting and sharing customer reviews, your business can proactively address criticisms and faults and improve the customer experience.

   7. Look into launching subscription models

Subscription models are great customer retention strategies that guarantee to keep customers coming back. 

According to McKinsey, 15% of online shoppers have signed up for one or more subscriptions and are constantly re-buying the products that they love only because their “subscription” tells them to. 

If you want your business to be well attended then consider offering something exclusive or an item that will leave people continuously in need of replenishing it when they run out. 

    8. Delight your customers with surprise reciprocity

Reciprocity is a social construct with a simple concept: people respond based on how they’re treated. When someone is treated well, they respond positively. When they’re treated badly, they respond badly.

This is the leading reason why good customer service is one of the leading drivers of customer retention and recommendation.

Research shows that while reciprocity works well on its own, it’s actually more effective when it’s least expected. To that extent, businesses can leverage this advantage by brainstorming ways in which they can surprise their customers with gestures that make them feel special and cared for, such as by including free discount vouchers in purchases or sending the occasional personalized thank you note.


To maintain a successful business, it is important to take the time to develop and execute customer retention strategies. Doing so will help you retain customers, which costs less than acquiring new ones. The best part about this strategy? It saves money in the long-run by boosting AOVs and LTVs of your customers. 


Hannah leads Marketing and Business Development at Zeotap, the home of the next-generation Customer Data Platform. Zeotap empowers brands to unify, enhance and activate customer data in a cookieless future, all while putting consumer privacy and compliance front-and-centre. Recognized by Gartner as a "Cool Vendor", it works with over 80 of the world's top 100 brands, including P&G, Nestlé and Virgin Media. It is also the founding member of ID+, a universal marketing ID initiative.Prior to joining Zeotap, Hannah led the Marketing and SDR functions at Yieldify, a martech company selling CRO solutions to e-commerce businesses in the US, UK and Australia. She started her career (after a detour teaching English in Japan) at Weber Shandwick and Nelson Bostock, working with companies including Samsung, Canon and HTC on global communications strategies before jumping ship to startups with a product marketing role at Monitise, a mobile banking business since acquired by Fiserv.

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