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The influence of customer retention on business prosperity is hard to overestimate. When performed correctly, retention techniques lead to lasting sustainability and elevated profits. By elevating client retention rates by 5%, a company can drive profits by an impressive 25%-95%.

The starting point of successful customer retention is identifying why the existing customers leave. Based on the received insights, businesses can develop strategies that build a loyal client community and motivate the buyers toward bigger purchases. 

Let’s explore customer retention in marketing, how it is measured, and how to implement it efficiently.

What is Retention Marketing and Why is It Important?

Customer retention is a brand’s ability to preserve the existing client base and keep them active by encouraging further purchases. This marketing approach allows companies to grow the profitability of their clients and elevate their lifetime value (LTV). 

Retention marketing strategies enhance repeat purchases and drive ongoing value from the company’s clientele. Marketers acknowledge that acquiring a new client is at least five times more expensive than holding an existing one. The two pillars of improving that through customer retention marketing are the understanding of what drives customer satisfaction and what may turn the clients off your brand. 

Benefits of Retention Marketing

Retention Marketing example

The fundamental thing you can get from successful customer retention marketing is maximizing the amount of money extracted from each client. The outcomes of this benefit are the following:

  • Greater profits. In many companies, 61% of revenue comes from loyal clients.This is a good reason to shift focus from client acquisition to client engagement.
  • Minimized costs. Keeping an existing client can cost a brand 5-25 times less than getting a new one. Therefore, customer retention marketing is a cost-effective approach in the long run.
  • Maximized average order value (AOV). Loyal clients will likely make more expensive purchases over time, increasing their AOV. Moreover, repeat buyers have a 23% higher likelihood of buying again.
  • Trustworthy brand ambassadors. Satisfied and loyal customers are inclined to share their positive impressions. Word of mouth is an excellent method to drive your business organically. 

How to Calculate Retention Rate

You cannot shape your marketing retention strategy without first identifying and assessing the retention rate. 

The Formula

Marketers determine customer retention rate according to the following formula: 

CRR = ((E-N)/S) x 100,


E – the number of clients at the end of the specified period of time

N – the number of new clients gained during the specified period

S – the number of clients at the start of the period

As a result, you get the percentage of customers who stayed with your brand during that time.

What is an Excellent Retention Rate in Marketing?

The indicators can vary across industries however, it’s important for a brand to understand which retention rates are standard in their sector. Here are several benchmarks:

  • The highest average indicators of about 84% are observed in the media industries
  • The automotive sector accounts for nearly 83%
  • IT sector: 81%
  • Hospitality industry: 63%

However, in every sector, there are businesses with retention rates lower than 50%, demonstrating a significant room for improvement.

6 Constituents of a Brilliant Customer Retention Marketing Strategy

What makes an efficient retention program? The recipes are countless. However, consider the following fundamental ingredients for efficient marketing retention.

1. Guide Your Prospects with the Help of a User Journey Map

In the era of a customer-centric approach, clients expect that the brands will put effort into addressing their unique needs. Specifically, this is the expectation of 66% of users. This is, however, impossible to attain without an excellent understanding of your customer.

A user journey map is a convenient tool that helps you determine where, when, and how your potential and existing clientele interact with your brand. The picture below displays customer behavior at each stage of the journey. Correspondingly, you can split your retention marketing strategy into several phases, enhancing its efficiency at each.

Retention Marketing example

Modern digital solutions help businesses acquire precious insights into their target audiences and customize customer experience to magnificent levels.

2. Determine the Churn Rate

A fundamental step of customer retention in marketing is countering customer churn. You should answer the following questions:

  • How many clients are leaving?
  • When are the clients leaving?
  • What makes them dissatisfied?

One of the tools that can help you analyze customer churn is cohort analysis. This technique implies dividing your user community into groups by a specific common trait, for instance, purchasing the same product. Then, you should analyze each group to answer the above mentioned questions and identify the friction points that are likely to cause churn. 

In the end, you’ll discover the factors that significantly impact retention in marketing.

3. Focus on the Onboarding Phase

You have only one opportunity to make the first impression. That’s why the initial stage in retention marketing is critical. A positive user experience at the very beginning lays the foundation for fruitful relationships in the future. 

How can you prevent churn at the onboarding stage?

Consider the three primary goals:

  • Guide. Provide effective navigation through the initial steps. Jazz up your communication with additional engagement and motivation. 
  • Educate. Clearly showcase the benefits of your product, address the potential questions about it, and advise how customers can maximize their value. 
  • Collect information. Collecting customer data is always a good idea as it helps create personal profiles and enables highly personalized offers. 

Several rules will help you make a seamless onboarding process and enhance the results of your retention marketing strategy:

  • Simplify communication and give incentives for further interactions
  • Allow users to streamline their experience by skipping tutorials and additional offers
  • Make the user interface intuitive and convenient
  • Ask permission to collect user data and send emails or notifications. 

4. Use Funnel Analysis to Reveal Friction Points

Before users make a purchase at your website, they usually go through a several-step journey called a sales funnel. Funnel analysis is a digital marketing technique that aids in finding opportunities to prevent churn. 

You can fix the issues and fine-tune the buying process by tracking the number of customers at each step and identifying how many of them drop off. 

Retention Marketing example

The chart displays a complete user path from visiting a website to completing a purchase. Besides, it also demonstrates a potential drop at every funnel stage. 

By analyzing your drop figures, you’ll reveal the areas for improvement in your funnel, thereby increasing the number of visitors who reach the bottom of the funnel. 

5. Personalize Client Interactions

Retention in marketing revolves around personal communication. It’s the way to build trust by deepening clients’ relationships and loyalty to your brand. 

In order to create a meaningful and empathetic dialog with your customers or prospects, you primarily need to know who they are, their demands and pain points, and what they aspire for. In other words, you need a lot of customer data to derive the required insights.

How do you obtain and structure the necessary information? Leverage segmentation—the paramount compound of any retention marketing strategy. 

Thankfully, there are multiple software solutions for collecting and analyzing information, conducting a comprehensive segmentation and building detailed user profiles.

Thus, the segmentation criteria can comprise:

  • Demographics: segmentation by age, gender, profession, income level
  • Psychographics: segmentation by interests, values, and personal characteristics
  • User intent: segmentation by buying preferences and behaviors

The obtained knowledge and insights will help you create an engaging interaction with your clients, keep learning more about them, and continually upgrade your product offers. 

6. Encourage Feedback Sharing

Retention in marketing goes hand-in-hand with a positive relationship with your clientele. Seamless communication is vital in constructing a healthy rapport.

Therefore, you should motivate your clients to share their impressions about using your product. This is the quickest path to reveal and remove any friction points before your customers abandon your brand. 

Notably, you should assure users that you are considering their comments, suggestions, and complaints and taking the respective actions. You can include a feedback form in your emails and blog posts, conduct surveys, and devote a special section of your website to client reviews. However, make sure to provide timely and meaningful responses.

Best Channels for a Winning Retention Marketing Strategy

Retention Marketing example

Although there is no universal solution for everyone, businesses and customers have valuable experiences with the following approaches:


As an opt-in channel, email provides brands with opportunities to deliver precious information and interact with their clients upon their consent. You can combine educational, promo, entertaining, and other types of messages to build a solid relationship and engage consumers. 

Pay-Per-Click advertising 

PPC is an excellent channel for retargeting strategies. Thus, you can segment your audience by the products they’ve obtained and send them relevant, personalized ads. 


This channel also requires customer consent to be employed in your campaign. The consent already means a certain level of trust. Together with high open rates the channel delivers, it can serve you well in building loyalty. 

Social Media 

SMM is indispensable in building relationships. It allows for the active involvement of customers in a conversation with the brand with their further transformation into followers and loyalists. 

Push Notifications 

This channel works great for reminders. However, it is effective only if not overused. 

Winning Marketing Retention Strategies

Now it’s time to be more specific about the retention strategy in marketing. Let’s discuss several approaches that help to skyrocket retention rates by establishing an emotional connection with clients.

Customer Engagement in Real Time

If your support team provides live customer engagement, you become empowered to address numerous questions and issues before they even emerge. With the help of video chat, co-browsing, or visual tools, you can effectively guide your visitors, ease the onboarding process, and deliver personal communication. 

Real-time engagement tools drive retention in the following ways by:

  • Providing a tailored approach. Personalized conversations encourage further interaction and remove fears, doubts, or concerns. They pave the way toward trustworthy customer relationships. 
  • Elevating customer experience. Immediate responses raise client satisfaction and prevent numerous issues. Interactive, real-time experiences skyrocket satisfaction levels.

Customized Offers

Personalization rules modern customer service. All the information you collect about your customers can serve you in delivering them exclusive offers. For instance, you can tailor special discounts or product selections for their important dates. Furthermore, you can create congratulatory cards or even small gifts. 

How does the technique help in retention marketing? 

  • It reinforces your bonds with your clientele
  • It delivers additional upselling opportunities

Exemplary Customer Service

Make superior client service a milestone of your marketing activities. A consistent customer experience throughout the entire buyer journey is the pillar of customer retention. Ensure that your service is impeccable at every stage of the sales funnel, and you will create an unforgettable customer experience with your brand. 

Customer retention marketing through exemplary service is attained through several factors:

  • Greater customer satisfaction encourages clients to continue their relationship with your business
  • Delighted newcomers are likely to convert to loyal customers
  • Happy clients tend to share their successful experiences, turning into the best brand advocates

User Community

Set up exclusive membership programs or forums for free interaction among your clients and brand representatives. This would be the space where community members can freely communicate while generating higher brand loyalty and adding brand recognition, which is particularly important for small businesses. The users can also access special discount codes and participate in referral programs and entertainment activities.

How does it help to retain consumers?

  • Gives space for socializing
  • Grants the feeling of affiliation with an exclusive group
  • Entertains
  • Provides valuable benefits

Loyalty Programs

Client loyalty programs are not innovative, however, their effect is hard to overestimate. Their essence lies in providing continual care to existing clients and urging them to make repeated purchases by offering respective rewards. 

By ensuring a positive impression after a purchase, brands reinforce customer satisfaction. A solid emotional link with the brand, in turn, can drive consumer lifetime value by 306%

Loyalty programs facilitate customer retention in marketing because:

  • Inexpensive in implementation, loyalty programs drive customer lifetime value (CLTV) 
  • Loyal clients will likely become your brand ambassadors spreading the word about your product

Retention Marketing Successful Practices

Retention Marketing example

Even the finest marketing retention strategy may fail if you neglect the basics. Keep in mind several best practices: 

  • Respect opt-ins. You need explicit client consent to start messaging them. The availability of the email addresses consumers entered while registering is not enough. Make sure you empower your clients to opt in.
  • Do not get frustrated with drop-offs. Not all drop-offs are your fault. If your client found a better offer, sometimes it makes sense to learn your lesson and let them leave. Stop sending them emails if they decide to disengage and give them time. After all, you can always try remarketing strategies toward them in a while.
  • Try something new. A continual change fuels your success. Make hypotheses and experiment: try different marketing tactics, channels, creative ideas, and offers. If the novelty resonates with your audience, scale it.
  • Track performance. Monitor and analyze your success indicators. Determine the vital metrics for your business and continue tracking results.
  • Work out the proper incentives. Keep searching for the right motivation for your clients to remain loyal to your brand. For this purpose, study your customer segments closely and keep up with the industry trends. Focus on client satisfaction rather than sales, and your business will flourish. 

Final Thoughts

Customer retention in marketing is crucial to driving sales. To succeed on this path, you need accurate data analysis and carefully crafted strategies. Modern technology can empower you with practical tools that can automate and enhance your marketing techniques. To ultimately streamline the process, however, you can employ website marketing services.

An expert partner specializing in digital marketing can provide solutions to optimize your marketing retention strategy, select the most impactful approaches and tools, and help promote not only your product but also your website and content

Delight your consumers and spread the word about your brand for the ultimate growth of your business!

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