11 Amazing Customer Retention Benefits for Your Business

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Nowadays, a lot of companies are investing in increasing and managing their customer retention efforts. They say it’s what literally any business needs. But what exactly are these benefits? Let’s find out! 


1. It Makes Your Brand Stand Out from Competition

From the perspective of customers, brands that make an effort to interact with them show how much they value their patronage. Unfortunately, there are only a few who genuinely do this which is why it’s a great opportunity to make your brand stand out.

Moreover, a lot of brands are more focused on acquiring new customers instead of retaining their old ones. This makes businesses that are retention-centric even more noticeable in the competition.


2. You Can Earn More With Loyal Customers

 Research reveals that engaged customers spend 60% more per transaction and buy 90% more than new customers. In contrast, disengaged customers can cost brands to lose some of their revenues. These customers refer to those that are actively spreading opposing options against the brand.

In addition, loyal customers also tend to be more accepting of price increases. However, you should just increase your prices needless with the confidence that they will stick around because they are loyal to your brand. Remember, the end goal is lifetime revenue so think of long-term outcomes.


3. More Cost-Effective than Acquisition

If you do the math, it is more expensive to invest in efforts to acquire new customers compared to the investment you need to make for customer retention. This is because you have to invest in the following to attract a new customer base:

  • Social media marketing

  • Email campaigns

  • SEO

  • PPC

  • Retargeting ads

  • Web banners

  • Prospecting leads

  • Outbound sales

Each of these customer acquisition approaches has a hard cost. Besides that, they are labor-intensive and time-consuming. When you look at the result, you’ll realize that customer retention efforts often can yield higher numbers across various metrics.

There have been several pieces of research proving this claim. However, although retention is much more cost-effective than acquisition, there’s no denying that it is not an easy feat to accomplish.


4. It Allows You to Upsell And Cross-Sell

Another major benefit of retention is that it allows you to upsell and cross-sell your products and services.

One of the most common mistakes many sales teams make is that they assume that once they sell something to a particular customer, then that is the end of it all. However, they don’t realize that by using customer retention, they are in the perfect position to know the needs and pains of their customers, allowing them to upsell and cross-sell their products and services.


5. It’s Better for the Employees’ Well-being

Customer retention is very similar to relationship building and a good relationship is much healthier for everyone involved since it’s mutually beneficial. On the other hand, sales are always transactional. They are price sensitive and affected by various factors.

Because of the nature of sales, a lot of employees struggle with meeting their regular quota because it’s not easy to convert strangers into paying customers. This is where focusing on being relational through customer retention can help. There’s less chance for engaged customers to switch brands when there are signs of trouble, protecting your revenue and making your employees’ lives a lot easier.

Sure, customers are important for all businesses. However, employees are equally as important because they make the day-to-day operation run. This is why you should also pay attention to their well-being, instead of being solely customer-centric.


6. You Have Room to Experiment

Being able to establish a solid customer base allows you to expand the boundaries of your brand and explore new things. Whether this may be a new product line or messaging, a loyal customer base will still be there for you.

The important thing is, you should maintain the main reasons why they are loyal to you in the first place and they will stay with you no matter what new things you introduce. 


7. Customers Will Welcome Your Marketing Effort

A lot of people easily get annoyed with marketing efforts, especially when there is a disconnect between them and the brand. This is exactly why email marketing campaigns fail mostly because a lot of customers unsubscribe, making it ineffective.

However, that is not the case for loyal customers. Loyal customers love to hear about new promotions and discounts that their brands have to offer. In some cases, even if they initially did not have the intention to buy, seeing the marketing effort can push them into making purchases almost immediately after.


8. Loyal Customers are More Understanding

Poor customer service can be very detrimental to a business. In fact, a study shows that $1.6 trillion is lost yearly because customers switch to other brands after experiencing bad customer service. It’s safe to say that it’s one of the main reasons why customers switch to another brand.

However, loyal customers tend to have more tolerance for customer service shortcomings. Of course, this does not mean that it should be turned into a norm since the goal should be to consistently provide high-quality and consistent customer care.


9. More Customers Will Explore Your Brand

A brand that has proven itself with its flagship product or service has a higher chance of encouraging its customers to check their other products and services. These customers are also more likely to consider the newly launched products and services from this brand.

The simple act of exploring what are the other things your brand has to offer can be very valuable for sales revenues. At the same time, these customers can also provide vital feedback regarding the honest quality of the product and services and how they could be further improved later on.


10. Loyal Customers Provide More Feedback

Customer feedback plays a vital role in the success of a business. It can serve as a guide on essential business decisions regarding your products and services. It also provides you with a clear direction on which aspects you have to improve. Unfortunately, it’s rare to see customers who take time out of their busy lives and provide businesses with feedback unless they are loyal to them.

Whether it’s positive or negative, receiving feedback from customers is a good thing. Bad feedback is an opportunity to show them that you genuinely care about their satisfaction. Plus, the fact that you make an effort to improve based on negative feedback will make you stand out since most businesses out there just leave them unresolved.


11. Word of Mouth Referrals Allow You to Earn More

You also get acquisition benefits from doing customer retention efforts. This is because your loyal customers will be the ones who will be bringing new business.

Loyal customers who are confident with your products and service won’t hesitate to recommend you to their brands and services. This is a very prominent trend, especially among millennials who are not shy about sharing their brand preferences online.


Tips on How to Increase Retention

There’s no denying that the benefits of customer retention can help a business soar to greater heights. With this in mind, here are some tips that you might want to consider applying to your business.


Know Your Retention Rate

The first thing that you have to do to increase your customer retention rate is to know what your current rate is in the first place.

You can compute your retention rate for a specific period by subtracting the newly acquired customers and dividing it by the number of customers that you originally had at the start of the period. The result of this will then be multiplied by 100 to get your total retention rate.

This rate will show you how happy customers are and how they value the products and services that you are providing. It will also reveal if your source of revenue is reliable or if you have to make some improvements. 


Increase Your Engagement

Increasing your retention rates means that you should also up your customer engagement efforts. Convincing customers to become repeat buyers requires target effort to help earn their trust. The best approach to doing this is by actively engaging with them.

There are several ways for you to increase your engagement with your customers. Some examples include the following:

  • Personalize content

  • Make it easy for customers to reach out to you

  • Take advantage of social media

  • Make your brand meaningful and relatable


Build Trust

 Trust is the foundation of a good relationship between a company and its customers (we’ve talked about how important that is and how you can use relationship marketing here). However, establishing this is easier said than done. But, there are basically 2 main things that you should always remember:

  • Building trust takes time

  • Don’t assume that just because customers trust you then they will automatically buy from you.

There is no one-size-fits-all strategy when it comes to building trust. However, one of the main things that you should focus on if this is your goal is making sure that you are reliable and you consistently deliver value to customers. It would also help if you follow through with your brand promises and claims.


Use Various Communication Channels

In this day and age, there are various communication options available at a person’s disposal. If you want to increase your customer retention, you should take advantage of it.

When reaching out to customers, it’s also highly recommended to maintain a communication calendar. Don’t just send them a message or email on holidays and special occasions. You should also make an effort to re-establish your relationship by asking customers how they are doing from time to time.

However, make sure to be strategic when reaching out to customers. Your approach must still follow the essence of your brand tone and messaging.

Conversely, it should also be easy for customers to reach out to you if they have concerns or questions. You should make it more accessible for them to leave comments and reviews regarding the products and services that you have to offer. The best way of doing that is by opening various communication channels other than the traditional emails and phone numbers.



When done right, customer retention can significantly help make your business successful. However, it does have a learning curve and you need to invest time, money, and effort into the process. But, given the list of benefits mentioned above, those efforts will eventually pay off.

If you’re interested on this topic, don’t hesitate in checking out our article about the best Customer Retention Tools in the market!


Customer retention refers to activities and actions that businesses take to decrease customer defection rates. Its main goal is to help businesses retain as many customers as possible through various initiatives. Examples of such initiatives are loyalty programs or reward systems that help increase customer commitment

Customer retention is more cost-effective than acquisition of new customers. Existing customers are also more aware of your products and are more likely to spend more.

Moreover, loyal customers that stay with you for long can substitute your own marketing efforts and promote your products with word of mouth.

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