How to Increase Customer Retention: Examples, Strategies, & Personas

According to Sprinkler, the average customer retention rate for most companies is 38%. Buyers will jump ship instantaneously, it doesn’t matter if it’s a slight inconvenience or a better offer from a competitor. You now need a level of personalization that attracts customers at all touchpoints, from the time they land on your website to the moment they checkout.

Let’s also not forget that a lot goes into acquiring new customers — ads, social media collaborations, PR stunts, you name it. But what happens after you land that first buyer? How do you keep them coming back?

Your best bet is to use customer personas – ecommerce personas if you’re running an online store and b2b personas if you sell products or services to other businesses – along with effective customer retention programs to build trust and keep customers happy. Personas analyze your consumer data and present insights that help convert prospects into repeat buyers.

A solid customer retention strategy focuses on delivering top-notch customer experience at every stage of the buyer’s journey. It’s all about analyzing customer behavior and understanding how they think and feel when they interact with your brand. In our article, we list strategies and stats to help you increase customer retention by meeting expectations and building loyalty, ultimately boosting business growth and revenue.

What Is Customer Retention?

Customer retention refers to a company’s ability to convert first-time buyers into repeat customers, keeping them engaged with the company for a long time. It involves taking deliberate steps to make existing customers happy, so they stick with your product or service. The goal? Prevent churn and stop them from switching over to a new competitor.

It’s not the same as customer acquisition – you don’t focus on acquiring new customers but rather on retaining the ones who have already subscribed to your services or purchased your products.

What we know: People love reliable brands, those that get what matters to them and go the extra mile to deliver not just what they want but what they need. So if a brand boasts a high customer retention rate, it’s a clear sign that they’ve put in the effort to provide great customer service and an excellent overall experience!

Steve Jobs’ Apple is one of the best examples of this. The company’s high-end products, services, and features, paired with impeccable consumer support, equally contribute to their customer retention rates, exceeding 90% in the last three years.

Apple’s customer service teams receive specialized training to prioritize user needs. Every detail is carefully considered — right from the moment you walk into an Apple Store. From the friendly greeting at the door to the calm, clear communication of technical specialists with frustrated customers, the goal is always to provide an outstanding experience.

So, customer retention is important because…

Customer retention is important simply for one reason: it’s easier and cheaper to keep your current buyers happy than to chase new prospects. New customers are a tough nut to crack – statistically, acquiring them can cost 5X more to your company, thanks to all the advertising, promotions, and onboarding expenses. Your present customers already trust your brand — they’ve purchased from you before, so you don’t need to work as hard (or spend as much) to make them come back.

Loyal customers don’t just stick around but also spend 67% more compared to new buyers, giving brands a steady revenue stream and keeping business afloat during lean periods. They’re your best spokesmen; recommending your services to their friends or acquaintances. People trust recommendations from friends, and around 88% of consumers and 91% of B2B buyers rely on word-of-mouth. That kind of organic promotion beats ad campaigns any day.

Plus, a small boost in retention can drive huge profits. Just a 5% increase in customer retention can lead to a 25% to 95% jump in revenue! Loyal customers also provide honest feedback in CSAT and NPS surveys, helping you improve your product, marketing, and sales activities. So, it’s not a surprise that brands use multiple customer retention strategies to build loyalty and increase customer lifetime value (CLV).

Calculating The Customer Retention Rate (CRR)

Customer retention rate (CRR) shows what percentage of your customers remain with your brand over a given period. It’s a critical metric for determining the profitability of your enterprise. To calculate CRR, select the time you want to measure and find these three numerical values:

S: Number of customers at the start of the period

E: Number of customers at the end of the period

N: Number of new customers added during the period

Here’s the formula: CRR = [(E - N) / S] * 100.

Now, let’s break it down with an example. Say you started the year with 2,000 customers (S). By the end of the year, you have 2,400 customers (E), and you gained 600 new ones along the way (N). Replacing the numbers in the customer retention rate formula: CRR = [(2,400 - 600) / 2,000] * 100 = 90%. This means you retained 90% of your customers over the year.

Key customer retention metrics to remember

You should monitor key performance indicators (KPIs) like retention rate, customer churn rate, and lifetime value while implementing a customer retention program. Retention and churn rates are especially important when it comes to tracking and refining your customer retention strategy.

Customer churn rate measures the percentage of customers you’ve lost during a set time. You can use this formula to calculate churn: Churn Rate = (No. of Customers Lost / No. of Customers at Start) x 100. If you started the month with 500 customers and lost 50, your churn rate would be 10%.

Similarly, customer lifetime value or CLV estimates how much total revenue a customer will generate for your business. The longer a customer stays with you, the higher their CLV. The standard formula to calculate the lifetime value goes like this: CLV = Customer Value x Average Customer Lifespan.

Customer value can be determined by multiplying the Average Purchase Value by the Average Number of Purchases. You can learn more about important CLV metrics through this HubSpot article.

How to Increase Customer Retention: 8 Strategies to Boost Customer Experiences

Being in the ecommerce or B2B industry is hard – competition is tough, customers are demanding, and the market is always changing. One day, your products are selling out fast; the next day, they’re not. In fact, only three out of ten customers continue purchasing from an ecommerce store for more than a year. So, what’s the right way to improve these numbers or increase the customer retention rate?

Here’s the thing. Customers are more likely to be loyal, with 86% willing to pay more, to a company that offers a good customer experience. Personalization at the individual level is the solution to this problem.

We have listed eight customer retention strategies that can assist you in achieving this goal and meet customer expectations.

1. Personalize experiences to retain customers

According to a study, 80% of customers choose a company that offers personalized experiences, and 62% are willing to spend more if their shopping experience feels customized. No two customers are the same. Even when they use the same product, their objectives can be different. Though it might be hard, try to tailor your solutions and resources to meet those unique needs.

In fact, you can personalize every step of the customer journey with demographic, psychographic, behavioral, and contextual data. This data helps segment your market, create personalized messages, and fine-tune communication strategies. You’ll also be able to provide customized product recommendations and onboarding experiences. But don’t stop here. Use AI and machine learning systems to automate personalization at scale, aligning everything with your ideal customer profile.

Customer relationships with brands are constantly evolving, with 94% of consumers recommending brands they have an emotional connection with. Additionally, many of them consider personalization important in building brand loyalty.

Yet, people only connect with brands that stand for something. Take Nike, for instance — they don’t just sell shoes; they inspire a positive, can-do lifestyle (remember their "Just Do It" tagline?). Be clear about your vision and values, and highlight them in your marketing campaigns. When customers see what you stand for, you’ll have an easier time growing your customer base.

2. Build a strong UI & UX

To keep customers, make their experience feel like it was designed just for them. Think about the first impression they get from your website, emails, and onboarding process – every little thing matters. A bad UI or a frustrating product placement sticks with them way longer than you think.

So, personalize everything! Design smooth onboarding sequences, send targeted email follow-ups, and add a helpful knowledge base. Don’t forget to keep customer support on standby 24/7. You need to nail those first interactions because they will shape how customers remember you.

Try incorporating the following elements in your user interface to make things simpler for your users:

• Clear, intuitive menus
• Fast page loads
• Uniform buttons, colors, and typography
• Bold, concise calls to action
• Progress and status bars

Remember, a snappy UI and a smooth UX go hand-in-hand. Let your users feel like the design is intuitive and simple. With solid feedback from real users, you’ll know exactly how to tweak things to keep them happy. Keep it personal, keep it seamless. Furthermore, there’s no point in selling a product if the user doesn’t know how to use it.

Ensure that users have all the necessary resources they might need to properly use your product after purchase, like:

• Articles, tutorials, and FAQs to answer common questions
• Step-by-step walkthroughs to help understand important features
• Tooltips, chatbots, or live chat for real-time help
• Short, engaging videos that explain core functions

Always gather user feedback. Leverage user research to get inside their heads. Understand what makes them tick, what confuses them, and where they get stuck. Throw in some usability testing, watch users interact with your product, and fix those little bumps.

3. Offer exceptional customer service

Customers are either happy or unhappy with your service. As per HubSpot research, 90% of customers rate an "immediate" response as an essential factor when they pose a customer service question, with “immediate” defined as 10 minutes or less. Every support interaction can make or break your business.

Thus, your customer service should be fast, friendly, and upfront. People want their issues solved quickly, and the faster you can reply, the better the experience. Quick replies lead to quicker resolutions, and everyone loves that. You can always start with live chat or chatbots for instant support on simpler topics.

But hey, quick doesn't mean rushing through things. If the issue takes time to fix, let them know and give them an estimated timeline for resolution. Transparency goes a long way in managing customer issues.

And here’s the thing, don’t make your customer service sound robotic or rushed. Make it feel human and personal, even when things aren’t going smoothly. Negative experiences can be turned around when you handle them right. Unsatisfied customers are often likely to return if they feel heard and valued.

4. Contextualize customer interactions

Do anything but frustrate your customers. Equip your support teams with tools that display all the relevant info upfront, like past conversations, customer details, and their history with your service. This helps your team send personalized, meaningful responses right off the bat because nobody likes explaining the same problem twice.

Make sure your workflows are seamless too. Route complaints to the right department without making the customer jump through hoops. When your reps have the right context and expertise, they can quickly build trust by actively listening, empathizing, and solving problems on the spot.

Training matters here. Teach your team how to connect with customers, not just fix issues. A confident, well-trained rep turns a frustrating experience into an amazing one.

Keep the customer feedback loop closed. Customers should know you’ve got their back every step of the way. Acknowledge their request, keep them updated, and wrap things up with a simple survey, like CSAT or NPS, whatever works. This way, you measure customer happiness and validate your customer support team’s work.

5. Improve customer experience with omnichannel support

Make it easy for customers to reach you through their preferred platform, whether it’s email, your website, mobile app, or social media. The more options they have, the faster they connect with your team, reducing the time it takes to get help.

Let’s take social media, for example. It isn’t just a buzzword; it’s the place for real conversations. People love interacting with brands on platforms they use regularly. That’s why a solid social media support strategy is important. You should build a small but engaged online community by sharing helpful content; think stories, quick polls, insightful research, and leadership tips that meet follower (customer) expectations, and improve customer service online.

Pick the channels that fit your audience best – a good idea is to create an audience persona to spot platforms where your customers are active. This lets you respond faster and resolve issues quicker, creating a seamless support experience. Some customer support tools even come with a sentiment analysis feature, helping you identify customer emotions and personalize responses.

6. Gather feedback via customer surveys

Collect customer feedback like your business depends on it, because it does. You can gather Voice of the Customer data using multiple methods, like surveys, interviews, focus groups, online reviews, support chats, and more. Customer surveys tell you everything: what’s working, what’s broken, and what people wish you’d offer. They help in understanding your consumers’ challenges, goals, and preferences.

96% of unhappy customers never even bother to complain about a business directly, with 91% of them simply leaving. So take note of the feedback of those who do speak up, even if it’s not entirely constructive criticism. Whether it’s praise or a complaint about a glitchy checkout page, every word helps you tweak, refine, and improve your business.

Ask the right questions. Skip the unimportant ones. Get straight to the information that’ll help you improve your products. Send them an exit survey via email when they unsubscribe, containing both multiple-choice answers and a blank space to enter reasons not listed. And don’t just collect feedback for sport; use it to make smart changes. Then, let your customers know: “Hey, we heard you. We fixed it. Thanks for making us better.”

7. Implement customer loyalty programs

Loyalty programs are a great way to increase customer retention. After all, individuals like being appreciated with gifts, early access to new features, exclusive offers, or discounts; it motivates them to make repeat purchases. You can start simply with a point-based system. It rewards your customers and collects important sales data for future recommendations.

Referral programs are also a good way to reward customers who promote your products. These people talk about your product, their friends trust them, and you get new customers without extra cost per acquisition. They do the marketing for you. It's like having a squad of unofficial brand ambassadors.

It’s fine if you don’t have the bandwidth to offer massive discounts and freebies. Even small perks, like Amazon gift cards or account credits, show your customers they matter and make them feel good about using your service.

8. Nurture communities for customer success

Build spaces where your customers can hang out, chat, and share stories. Online communities, forums, and message boards let people swap tips, talk about your brand, and solve problems together; there’s no need to ping you with an email or call. Your customers feel like they're part of something bigger, and who doesn’t love a little squad energy?

Use these hubs to drop product updates, host contests, distribute user-generated content, and hype up events. Keep the conversation going with social proof like reviews, ratings, and interesting customer success stories. You can display these testimonials right on your product pages, where potential customers can find them.

And when someone hypes you up on social media, don’t just ignore them. Jump in, and show your appreciation! Shoot them a thank-you email, or surprise them with a discount or gift card. Give a little, and watch it turn into a sale. Never forget to determine your “why” for building the community. How does it fuel your goals? Don’t wing it — track what works. A thriving community = happier customers = everyone wins.

What Are B2B or Ecommerce Personas?

Ecommerce personas are buyer personas specifically built for your ecommerce store. B2B personas, on the other hand, represent the ideal customers of a business-to-business company. Both use your customer data to create audience segments, representing their demographics, goals, challenges, interests, hobbies, values, personalities, and preferences.

Such types of personas include your transacting and non-transacting audiences:

• Transacting segments: People who buy or subscribe to your services.
• Non-transacting segments: Individuals who do not complete desired actions, like signing up for your newsletters or making purchases.

Bouncers, passive browsers, and cart abandoners make up a part of your non-transacting customer segments. At the same time, repeat customers and one-time buyers (with high and low average order values) constitute the transacting segments.

One can create buyer personas the easy way, with online persona generators, or the hard way, ie., manually. Delve AI’s AI Persona Generator simplifies the persona creation process to a great extent. It analyzes your first-party and second-party data, then enriches it with 40+ public data sources to generate data-driven personas for your ecommerce or B2B business. Each segment digs deeper into persona details and audience distribution, providing you with sample user journeys (for ecommerce personas) or organization journeys (for B2B personas).

Furthermore, you don’t need to create personas for your entire site – you can just build one for a single product or service depending on your goals with Website Persona.

Personas affect customer retention rates

Customer retention is the rate at which prospects stay with a brand for a given period. It is the opposite of the customer churn rate, which measures the rate at which customers stop doing business with a company.

Retention rate is a critical metric for assessing the sustainability of a business. If your rates are higher, chances are that you have a loyal customer base, which will allow you to save costs and continue to contribute to your company's revenue. After all, it costs more to acquire a customer than it does to retain an existing one.

Buyer personas can play a significant role in customer retention.

Remember, you collect, process, and analyze different types of customer data to create ecommerce or b2b buyer personas. This includes your web analytics, CRM, social media analytics, competitor intelligence, and Voice of the Customer data, like reviews, ratings, blogs, community forums, and news.

A well-researched persona answers many questions, such as:

• Who are your customers (age, gender, income, location, education, family status)?
• Where are they from (city, region, country)?
• Why did they choose your products (goals, pain points, motivations, communication preferences)?
• What are their shopping patterns (preferred marketing channels, keywords, payment methods)?
• How do they navigate your site (sample customer journeys)?

You can use this information to create meaningful marketing campaigns and deliver content, ads, recommendations, and discounts personalized to each audience segment. When you thoroughly study one of your customer personas, you can identify the potential reasons why they churn. Then, you can develop strategies to improve retention and boost conversion rates for your best and worst-performing audience segments.

Improve Customer Retention with Buyer Personas

Your best-performing personas are those of your repeat and one-time buyers. Bouncers, passive browsers, and cart abandoners are segments that don’t perform well – the former can be ignored in most cases but the latter have a lot of conversion potential. Now, let’s look at how you can acquire and retain new customers using personas.

1. Bouncers

Bouncers are visitors who land on a page on your website and then leave without looking at or interacting with other content on your site. Often, they drop off because they don't find what they are looking for on your page – or maybe they don’t like what they do find on your page. You can identify these bottlenecks – their likes and dislikes – with customer journey mapping.

It will help you understand how customers move around and cover different touchpoints before, during, and after they buy your products or services. Find pages with high bounce rates and try to determine the factors that make users leave.

Customize landing page:

The landing page is one of the most important elements of your website – it is the first point of contact users have with your ecommerce site. It needs to be personalized with keywords, graphics, and videos that resonate with your buyers. Don’t forget to add compelling headlines and calls to action (CTAs).

Look at your personas, their goals, search queries, and topics of interest. This will help you design a landing page with elements that attract and engage your target audience.

Use relevant pop-ups:

People generally don’t like pop-ups when they are browsing a website. Yet, they can be incredibly useful, popping up at the right place and time. For example, you can get users to buy an exclusive product by offering a 20% discount right before they exit the page.

The right way to go about this is to identify pages with high traffic but also high bounce rates and insert pop-ups offering a free product or discount. Or just capture email addresses for future promotional emails.

2. Passive browsers

Passive browsers are users who like to hover around your website without taking any action. They go from one product page to another, read reviews, and compare prices, but don’t buy anything. You need to encourage them to take action and push them down the sales funnel.

Suggest personalized products:

Buyer personas tell you how customers get to your site, who they are when they are active, and which products they are interested in. You need to analyze these factors and offer personalized product recommendations made just for them. Check out their browsing behavior and interests, along with their spending habits, and suggest products with irresistible pricing.

Use retargeting ads:

Retargeting ads on Google, Facebook, or LinkedIn are a good option to bring back passive browsers who already visited one of your product pages. They remind users about your brand on other platforms and display products that incite interest.

To get audience targeting, keyword, and content ideas, compare website visitors with your regular buyers. See which keywords and interests they have in common, and build ads around them.

Include a call to action (CTA):

Compelling CTAs motivate passive browsers to take action, like signing up for new updates, adding items to their cart, or buying a subscription plan. They create an engaging experience and guide prospects toward better products and services. Offer incentives when you can, but make sure to get something in return. Convince people to sign up to your platform, provide contact details, and enable email notifications so that you can send out nurture emails until they are ready to buy from you.

3. Cart abandoners

Cart abandoners add items to their shopping carts but don't go through with the purchase. They've done all the research, reviewed and compared products, and added items to their carts, but abandoned the purchase for some reason. It can be due to many reasons, like high shipping charges, a long wait time, or maybe they found a cheaper alternative somewhere else.

These customers are simple. All you need to do to lower cart abandonments is to find out the reason why your buyer did not complete the transaction. Once you have that information, just resolve that issue.

Simplify checkout:

A complex checkout process with many pages and forms will confuse and stress out your customers. Customer confusion is directly linked to losing out on sales. Keep it simple and reduce the number of steps required to complete a transaction, like auto-filling addresses and contact details. If checkout is not the problem, add pop-ups with last-minute offers to encourage cart abandoners to make a purchase.

Send abandoned cart emails:

Many ecommerce stores send out abandoned cart emails to make a sale. Start by compiling a list of users who abandoned their carts, then create simple but quirky emails to get them back on board, like the one below by Le Puzz.

You can also develop an email nurture track, offering discounts on present items along with positive customer feedback to convince cart abandoners to complete the transaction.

4. First-time buyers

Your first-time customers are precious since you have spent so much time and marketing resources trying to get them on board. There can be two types of them depending on their average order value (AOV) – you cannot let either of them get away.

First-time buyers (Low AOV)

Validate their purchase with excellent after-sales service and support. Since they have a low AOV, offer economical products at discounted prices to encourage a higher customer lifetime value. Once you think they are ready to spend more, try to upsell and cross-sell your other products. Make them a part of your referral and loyalty programs and give out reward points when they purchase from you.

First-time buyers (High AOV)

Customer support is crucial to retaining these customers as they don’t want discounts but quality products and shopping experiences.

Reach out to them at regular intervals and solve any problems or queries they may have. Suggest exclusive products via email or call and include a luxury gift if they spend above a certain threshold. This will increase your chances of generating positive word-of-mouth (marketing) referrals and recommendations.

5. Repeat buyers

Repeat buyers generate the bulk of your revenue and should not be ignored. Generally, ecommerce stores have a large number of them compared to the B2B industry. They can be impulse buyers or discount chasers; the point is that you have to ensure that they regularly buy from you.

You can implement the tactics mentioned before on this customer segment as well, and try the following methods:

• Offer discounts when they buy products in bulk or purchase a yearly subscription plan
• Add them to your customer loyalty program and give out redeemable loyalty points or rewards
• Send regular product updates, promotions, and limited-time offers
• Provide free shipping and express delivery to your prime members, like Amazon

A good rule of thumb: eliminate points of friction and discontent to make it easy for people to buy from you. Don't forget to respond to customer complaints or comments on social media and other community forums.

Top Customer Retention Examples: Amazon & Dollar Shave Club

Want to learn how to increase customer retention? Study the top brands that have been in your industry for a long time. In this section, we’ll cover Amazon and Dollar Shave Club – brands that have increased customer retention by exceeding customer expectations. From personalized services to engaging content, both brands masterfully turn buyers into followers, proving that retention is just as important as acquisition.

Amazon

Amazon is as famous a brand as they come. Its Prime Membership is at the heart of its customer retention strategy, a loyalty program offering unmatched consumer benefits. For a fixed annual or monthly subscription, members get access to free two-day or one-day shipping, early sale discounts, and services like Prime Video and Prime Music. This creates a “locked-in” feeling — for those using Prime, it’s a part and parcel of their daily lives.

Furthermore, Amazon’s algorithm is constantly learning from customer behavior, suggesting product recommendations that feel eerily spot-on. Whether it’s sending email recommendations based on past purchases or curating an entire shopping page just for you, Amazon makes every visit feel personal. Let’s not forget Amazon’s relentless retargeting strategy.

If you add an item to your cart but don’t buy it, Amazon doesn’t let you forget. Their ads follow you everywhere, reminding you about that product until you finally check out. It’s a clever way to keep their brand and your potential purchase top of mind.

Amazon’s A-to-Z Guarantee ensures customers are confident about their purchases, while features like the 1-Click Ordering remove friction from the shopping experience. If something goes wrong, Amazon’s easy return policy and round-the-clock customer support via chat or call solve problems swiftly and increase customer satisfaction. With Alexa, customers can further shop, check orders, and get delivery updates — hands-free.

Dollar Shave Club

Dollar Shave Club, unlike Gilette or Schick, changed the grooming industry with its subscription revenue model, making shaving products more affordable and accessible.

Customers can pay monthly or annually to get razors and other grooming products delivered straight to their doorsteps. This “set-it-and-forget-it” model eliminated the hassle of running out of supplies. Users can choose from four membership tiers, like the Humble Twin (two-blade) or the Executive (six-blade) razors, and easily pause, adjust, or cancel subscriptions.

Their loyalty rewards further give members free samples, early access to new products, and discounts on bulk or long-term subscriptions, which encourage future engagement. Also, DSC’s humorous emails, videos, and newsletters create a sense of community, making customers feel like they’re a part of something bigger.

Their AI-powered chatbots handle customer queries instantly, reducing the time it takes to handle billing and subscription-related requests. That’s not all, DSC’s retail stores allow customers to try products firsthand, building trust and positive word-of-mouth. Dollar Shave Club’s pricing strategy further increases customer retention – monthly plans are competitively priced, and orders over $20 include free shipping, encouraging larger purchases.

Customer Satisfaction Is Critical to Healthy Relationships

Customer retention is critical for business success. After all, what’s the point of acquiring new customers if you can’t keep them around? Building a rapport with your customers takes time and effort, but it’s well worth it. Hard work, patience, and consistency are key — you need to show up and deliver a great customer experience to earn their trust and loyalty. The first step here? Make their lives as simple as possible.

Also, there’s no shortcut to earning customer trust and loyalty. We have listed but a few ways to increase retention using different customer retention strategies and personas. But don’t stop there; there’s plenty more you can do to boost customer engagement, experience, and satisfaction. It doesn’t matter what method you opt for, always deliver the best when it comes to your product, pricing, and service.