These 5 Customer Retention Strategies Will Grow Your B2C Business

By Andrei Geist

While small- and medium-sized companies may not be able to compete with the marketing budgets of larger corporations when it comes to obtaining new customers, many such enterprises are finding success by focusing on customer retention instead.

So what are the best customer retention strategies, and why are they so important for growing businesses? This article will offer actionable, data-driven advice to help you take full advantage of the benefits of optimal customer retention.

What is customer retention?

For those with marketing experience, the term customer retention likely needs no explanation. In short, customer retention is exactly what it sounds like: a company’s ability and efforts to keep existing customers, ideally motivating them not to choose products from competing companies.

Customer retention, in theory, is quite simple. After a customer has made their first purchase from your company, a comprehensive and well-structured customer retention strategy will ensure that they choose your company over competitors for similar purchases in the future.

We’ll explore some of the most effective customer retention strategies in a bit more detail later on, but first let’s take a look at some key statistics on the subject.

Customer retention by the numbers

It seems that many businesses fail to adequately focus on customer retention, choosing instead to prioritize customer acquisition. For those that do choose to prioritize customer retention, the research seem to show highly favorable results: 44% of companies say that their company had a department focused on acquiring new customers, only 18% report having such a department focused on maintaining and improving customer retention.

Customer retention is also dramatically more effective when it comes to conversion. Per the data, there is a 60 to 70% chance that an existing customer will respond positively to a targeted marketing campaign, while a similar campaign will only have a 5 to 20% chance of being effective when new customers are targeted.

Additionally, loyal customers are also far more likely to respond positively to newly released products. Existing customers are up to 50% more likely to purchase a new product when compared to previously unreached customers.

Finally, additional research shows that an important aspect of customer retention is quality. Majority of customers say that product quality is still the determining factor informing the decision to make a repeat purchase.

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Strategies to improve customer retention

Although the statistics demonstrate why customer retention systems are important, they fail to explain how the owners and management of growing companies can effectively implement such systems. So how do you keep your customers coming back, more exactly?

1. Shore up your quality assurance

While there are a number of secondary factors that determine whether a customer stays loyal to your company, the most important factor is inarguably quality. If your products are better than the competition, people will keep coming back for more; it’s as simple as that.

Quality assurance isn’t limited to making sure that your products meet the minimum advertised specifications. It also extends to factors such as your customers’ shopping experience and the ease with which they can understand and use your product. Using an interactive digital catalog rather than a boring paper volume, for example, can make the difference between a one-time customer and a loyal customer.

Of course, quality assurance also means making sure that any quality issues that slip through the cracks can be promptly and effectively addressed. Creating and training a customer support team is crucial to make sure that your customers stay loyal to your brand.

2. Maintain contact with customers

Another factor that determines the effectiveness of customer retention strategies is consistent and positive contact. If you aren’t actively maintaining contact with your customers, it’s highly likely that they won’t reinitiate.

For smaller businesses, this can take on a number of forms. Many small companies choose to conduct their customer outreach efforts via text messaging and email, among other channels. Larger companies typically use the same channels, often using automation to optimize the effectiveness of their outreach.

While email and text messaging are the most effective channels, companies with the budgets to explore other options often utilize platforms such as Google Ads to maintain contact with their customers.

3. Keep customers engaged online

Although ensuring consistently high quality and maintaining contact are of great importance, growing businesses will also need to assess their online presence and make sure that it's as engaging as possible.

The best place to start when it comes to online engagement is optimization. Making sure your website loads quickly, is easily navigable and viewable on mobile devices is a surefire way to ensure that your customers keep coming back.

Beyond optimization, the best way to increase customer engagement is by implementing interactivity on your website. Quizzes, surveys, and other interactive on-page elements will all serve to increase customer engagement and bolster customer retention.

4. Implement a customer loyalty program

One of the most effective ways to increase customer retention is to create a customer loyalty program. Loyalty programs are nothing new; they’ve been around in one form or another since the late 1700s.

While they’re hardly a novel concept, customer loyalty programs are still remarkably effective. One study reports that 58% of loyalty program members are more likely to make additional purchases with a retailer after they have joined the company's loyalty program.

Customer loyalty programs can take a variety of forms, from punch cards at coffee shops to point accrual systems for airlines and banks. Which model you implement will depend on your business model, but will undoubtedly bring favorable results if configured properly.

5. Form relationships with customers using social media

Social media is a must for any business, regardless of its size or marketing budget. What many business owners don’t realize is that social media is an extremely effective tool for customer retention in addition to its other applications.

Creating a social media account is an excellent way to connect with your customers on a personal level, providing you with a way to show the human side of your business. Experts say that social media is the second most popular customer retention tool, right after email outreach.

So what should you post on social media? Anything, really—as long as it’s sincere and authentic. Even posting about everyday goings-on at the office or on the job is likely to improve customer retention.

Customer care is key to your company's success

Growth in the modern marketplace doesn’t just mean winning over new customers—it means taking care of the ones you already have. Customers are a resource, and a valuable resource at that. If you maintain your relationships with them, they’ll stay with you a lot longer.

RELATED: 12 Ways You Can Use Great Service to Keep Customers Coming Back