Customer retention

Guide To Increase Customer Retention for Small Businesses

You are a small business owner and looking forward to ways for increasing your customer retention rate? You are in the right place. Customer retention is quite important and has a great role in a successful business. Before discussing the increasing factor let’s have a look closely at what is customer retention?

What is Customer Retention?

What defines customer retention in marketing: is the process of attracting existing customers and continuing to purchase products or services from a company. It’s different from acquiring customers or leads because you’ve already converted customers more than once. With the best customer retention strategies, you can build strong relationships with customers who are loyal to your brand. They can even spread words across influential circles to become brand ambassadors.

But let’s start from scratch. You sold a product or service to a consumer. What happens now? It’s time to design and implement your customer retention strategy.

The Importance Of Customer Retention In Online Business

You may have heard that acquiring customers is easier and cheaper than retaining previous customers. New statistics show this is true. First, you spend 5x less on customer retention. At best, your chances of selling to existing customers are 40% or higher than your chances of converting someone who has never purchased before.

Existing customers also cost 31% more than new leads, and when you launch a new product, returning customers are 50% more likely to try it.

These statistics should be sufficient to develop and test your customer retention strategy.

Customer retention is important to any growing company. Because it measures not only how successful you are in acquiring new customers, but also how successfully you meet the needs of existing customers.

Retaining customers is easier and more economical than acquiring new regular customers, spending more, buying more often, and recommending them to friends and family. Increasing the customer retention rate by just 5% can increase the company’s revenue by 25 to 95%.

Numbers are not a lie. Customer retention brings enormous profits to the company.

Customer retention is essential to the company’s growth and success for several reasons, including:

  • Value for money: It costs 5-25 times more to attract new customers than to retain existing ones.
  • Return on Investment: An increase in 5% customer balance can increase the company’s return by 25 to 95%.
  • Loyalty: Booking customers to buy more and spend more than new customers. They learned the value of a product or service and came back again and again.
  • Recommendations: Satisfied and loyal customers are more likely to praise your company and refer them to friends and family, so you can get new leads for free.

It may seem obvious. Of course, businesses have to work to retain their customers, but when businesses start to grow rapidly and have a hard time implementing a strong customer support program, proactive support for existing customers can be out of the question. 

For vendors, the most important thing is to find new ways to increase your profits.

How Retaining Customers can Increase Sales?

To do this, you need to sell more, so you need more customers. As a result, suppliers are often too focused on acquiring new customers to meet the need to keep existing customers efficient. However, we often hear that it is cheaper to retain existing customers than to attract new customers.

Let me remind you of one important fact. According to Marketing Metrics, sales to existing customers are 60-70% successful, while new customers only 5-20%!

customer retention

Marketing cost savings

Why is it so expensive to acquire new customers? It’s primarily about marketing. Without marketing, potential customers may not even know you exist, and clever marketing campaigns can attract customers to choose you over your competitors. But marketing comes at a cost. This also takes time. To get the most out of your marketing, you need to be ready to make a significant investment.


Loyal customers are More Profitable.

So, why does increasing customer retention increase your revenue? Because loyal customers are loyal customers. They usually buy and spend more than new customers.

MarTech’s research shows that existing customers are 70% more likely to purchase a new product or service than new customers. They also tend to spend about 33% more than new customers. It may be because your existing customers know and trust you. Listening to and meeting your customers’ needs will make you loyal forever. If you appreciate them they will thank you again. And if they value you, they’re more likely to pay a higher price for your products and services because they know they’ll get your money back.

Loyal Customers Support Business Growth

Business growth isn’t just about increasing your income. It’s also about improving your products and services until you can truly say you’re the best for what you’re doing. You need to be one step ahead of your competitors, and regular customers can help. Talk to existing customers. Ask what you think of our products and services. Also, ask them what they don’t like and what changes are helping them improve.

This feedback is very important. But the most important thing is to act on your feedback. Work hard to meet your customers’ needs because that’s how you stand out from the competition. Customer feedback helps you grow. This allows us to improve our products and services and discover new growth opportunities.

Customer retention is good for employees as well.

Observation of customer acquisition can harm employee satisfaction. No one likes cold calls, and constantly finding new customers can be exhausting and difficult.

However, if you focus on customer retention, employees can build constructive relationships with customers. Instead of faceless characters, loyal customers can become celebrities who can tell a unique story. The job is not about selling more than people. For many employees, this will make the job a lot more rewarding.

Some Business Growth Examples

Starbucks Client Retention Program

Starbucks Coffee Goliath was a pioneer in marketing, especially in the customer acquisition department. Initially, Starbucks founders Zev Ziegler, Jerry Baldwin, and Gordon Bowker focused on the sound and smell of the store to provide a delightful customer experience. But to grow it had to be innovative. One of the most innovative ways to retain customers is the app’s mobile ordering and payment capabilities. Thanks to the new feature, customers can order coffee before arriving at the store.

What do customers think of supplements? Simply put, they loved it.

Food order chatbot
Source: Starbuck


This supermarket strengthens its UK presence with more than 2000 stores nationwide. For large brands like this, it can be difficult to act with integrity and dignity. Online food scanners and self-service are useful, but people still enjoy doing business with others.

Customer service is still needed, and Tesco employees have decided to follow Twitter with human opinion. They show interest by adding personality to their interactions with customers. Check out the latest interactions.

tesco customer query


People are passionate about how much they love their pets. (Ask the cat Leela, who recently bought an apartment, she is still only 4 meters tall.) As a pet supplier, Chewy knows its customers love their pets. He also knows that pet food and supplies can be purchased at similar prices from other companies, including Amazon.

Thus, he uses a special principle of reciprocity to attract customers with instant gifts and cards for pets. These surprises don’t have to be big or expensive, but they are memorable to customers by showing interest in fur kids. The example below is a picture of Chewie ordered from a customer’s pet. Other ideas include handwritten thank you cards or free samples of new products.

Chewy customer retention

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Retain your Loyal Customers by using AI technology and enhance your retention rate now

Tactics SMB can Use to Increase their Retention Rate

Successful retailers understand the importance of customer retention and use tools and strategies to return customers to their stores. The most common are email marketing, loyalty programs, blogs, and customer service. These customer retention strategies are clear, inexpensive, and can have a business impact. In the following, we will cover some of the other retention strategies that can have a big impact on your bottom line and are easy to use.

Email Segmentation 

Avoid the email method of grouping all customers into large groups receiving 3-4 emails per week. Rather than building relationships, it promotes disconnection through rejection. Segmenting your customers based on demographics and purchasing information can help you send the right offers in a timely and more efficient way.

Offer Sales to Loyal Customers

Many marketers focus on turning site visits into sales, but when the sale is over, they ignore buyers looking for more business. You need to know which products sell well together and which products are obvious after the sale. You also need to know how long it will take a buyer to buy a new product so that the buyer can strike when considering a new purchase. It’s all about automating this and creating a system that can sell, sell, and analyze.

Measuring the Lifetime Value

It’s important to know how much business and profit your customers can expect in their lifetime. Lifetime value can be used to estimate the revenue you can spend and earn from acquiring new customers. You can calculate these numbers for your business using this free life calculator. Understanding the total revenue your customers can bring to your business can help you better understand the importance of customer retention.

Get More Feedbacks

Many subtle issues can cost customers. Questions such as “Your order took longer than expected”, “Customer service did not solve the problem”, or “The product is not what you expected” may not be reported by the customer. But they contribute to retirement. After placing your order or service request, submit a short survey (1 or 2 questions) and rate your satisfaction. If you have a small problem and respond quickly, your customers will feel you are listening and can forgive their dissatisfaction. This feedback is very important. Because now, not only can you make this customer happier, but you can also repair internal processes so they don’t happen again.

Holger Sindbaek, the founder of World of Card Games, says, “In the gaming world, user feedback is invaluable. At Online Solitaire, we’ve found that even minor issues can significantly impact a player’s experience. We actively seek our players’ feedback and respond swiftly to their insights. This approach has helped us retain our users and guided us in developing new games that our players love. It’s a continuous cycle of improvement that keeps our players engaged and coming back for more.

Surprise Offers for your customers

Many loyalty programs, such as those used by airlines, automatically provide benefits when customers reach certain spending limits. The problem is that buyers track these points and expect free shares or discounts. Few companies reward their most important customers without information. After shopping often, you suddenly get a free t-shirt or a new makeup bag. Inside the merchant, the retailer tracks the amount spent by each customer and automatically sends a freebie or coupon card when a threshold is reached. This amazing element works wonders and I have seen my clients use it successfully.

So, I guess that’s enough to understand how much customer Retention is important Especially for Small Business owners. After that, you must be thinking it would be a difficult task to maintain all these things. So, you must be thinking about How to connect the customer to your website and product to not lose the attention.

Don’t Worry…

We have a perfect tool for increasing your retention rate. It’s none other than…

A Chatbot!

Yes, a chatbot can help you out in increasing customer retention at a great level. Have a look at how?

How Chatbot is the best Customer Retention Strategy?

Chatbots are the perfect tool for your next customer retention strategy. Here are some main perks you can achieve by using chatbots in your customer retention process.

Increased customer Reach

Whitemail and email, and outbound phone sales remain the preferred channels for active customer acquisition. These channels are not used for efficiency and efficiency reasons, but they are all available to this day. You can now use special bots to engage your customers in a cheap channel with 98% open price by renewing and/or refunding via SMS (including email, web, or in-app).

Is it hard to think that it will increase engagement because it is not more comfortable to communicate with your customers through the channels they use to communicate with friends and family? If you don’t think about moving communication to mobile channels, your competitors can have lunch.

Timely collaboration with customers

The gap between a customer’s intention to opt-out and an actual departure has become even shorter as a result of changing license terms, increased competition, and consumer access to information. So, the time and method of attracting customers must keep up with the times. In particular, it’s not enough to rely on traditional channels like telesales, bulk white emails, or emails that end in unread or spam in response to customers who haven’t yet subscribed. If the penalty is used to renew contracts and/or to recall personal messages promptly to individual customers, the value proposition is presented to the customer before competitors receive it.

Improve customer convenience

Help your customers complete their journey in minutes on their mobile devices with simple, instant interactions. As mentioned earlier, how about delivering messages to your customers using the messaging channels they use to communicate with friends, family, and coworkers (e.g. SMS, mobile web, or app)? Introducing friction such as channel changes (e.g. voicemail) or completing multiple steps disrupts the customer journey and opens a window for competitors.

A previous blog post, Why Netflix is ​​a good analog for customer service innovation, elaborates on this concept.

Reduce the cost of providing services.

An agent on the phone sales team will reach out to all customers to reimburse the cost of retrieving the customer or attempting to renew the contract. Artificial intelligence robots can communicate with customers and secure contracts using custom interactive messaging (as you define them). This means you can hire a much smaller number of agents to focus on more complex customer retention issues. You can then choose to reinvest these labor savings into your customer value proposition with special offers to improve campaign performance and customer loyalty.

Also Read: Here is the Guide

Differentiated customer experience.

According to Forrester Research, when tasks are done correctly and efficiently, people prefer to complete tasks or get answers in self-service mode. Low-resolution and immersive ServisBOT provides customers with an interactive interface that combines chatbot, artificial intelligence, human workflow, and API functions to provide a fun and immersive contact experience.

By providing customers with a variety of innovations and clear completion paths supported by multimedia content, we can provide customer service tailored to business goals and brand values.

Also Read: Outsource Customer Support

Benefits of using bots to retain customers

So, Botsify Bot can play an important role as part of a storage strategy with bots like Renewal BOT, Quote Bot, and Loyalty BOT, either attracting customers who have already left the company towards the end of the contract or risking access to competitors.

botsify chatbot


Read a case study of our insurance customers who implemented Quote Bot to increase conversion rates for new customers and increase renewal rates for existing policyholders.

Here are some of the benefits chatbots can get:

  • Reduce customer service costs by freeing up resources to get back lost customers or by offering better incentives to retain existing customers.
  • Improve customer satisfaction through interactive and personal conversations and clear completion paths.
  • Increase reach and communicate with customers by delivering messages on time at a high open price.
  • Improve your ability to recruit lost customers through automation using WinBackBOT when customers leave.
  • Increase repeat revenue by reducing customer churn
  • Reduce customer evacuation costs. Attracting new customers is much more expensive than retaining existing customers.


Create your first AI Retention Chatbot

Get all the benefits of retention chatbot and had a great retaining experience

Botsify a Perfect Customer Retention Bot For SMB

Customer Retention is one of the most challenging and challenging tasks for small business owners. Botsify AI retention chatbots help businesses and individuals to engage their existing customers and increase their sales up to a great level. There are lots of features they are providing which help you in creating a perfect retention bot.

By using Botsify’s chatbot you can easily retain your previous customer by sending a follow-up for feedback message or by giving them a discount mentioning that they are the previous customers so they are getting it and so on other many ideas you can use…

Look here are some examples of Botsify’s pizza delivery chatbot engaging their current customers…

pizza delivery bot 

So, What are your thought about customer retention? are you interested in retaining your previous customers? Try Botsify chatbot platform surely it will help you in generating high customer retention rates…

Want to try Botsify’s customer retention chatbot? Try a Demo Now…

Book a Free Demo Meeting with us

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  • Aiman Zaidi

    Aiman joined the team as a Senior Content Writing Executive and adds technical content to our blog section. She did her Bachelors in Computer science from Federal Urdu University. She holds expertise in multiple departments like content writing, Content marketing, and social networking. She also handles our website content and design help tutorials also...

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