The success of a startup is inextricably linked to customer retention. In fact, research shows that increasing customer retention by just 5% yields the same increase in profits as increasing your customer base by 50%. But how do you improve customer retention? In this post, we’ll cover five ways to do so.

Improve Customer Experience

The number one way to improve your customer retention is by improving your customer experience.

And the best way to do that is with data analytics.

You may not think about it, but every interaction you have with your customers and prospects is an opportunity for them to either love you or hate you. You can use this data to understand what they need to stay loyal and engaged with your brand and then deliver on those needs better than anyone else.

One great example of this is Zappos, which uses customer service metrics like Net Promoter Score (NPS) to inform their decisions and set goals around improving the overall health of their company. They know that if they are going to be able to retain customers in a competitive market, they need a positive experience every step of the way–from ordering shoes online all the way up until those shoes are delivered right at their doorsteps (or doorstep if there’s no mailman).

Create A Referral Plan

A referral program is one of the most effective ways to improve customer retention. A referral program is a simple concept: if you refer someone and they sign up for your product or service, you get a reward! The rewards range from free upgrades or extensions to significant discounts on future purchases. You can also incentivize customers through this process by offering cash rewards for referring new people.

Whatever you decide to give away as a reward, make sure it’s relevant to your business — this will help with both retention and acquisition rates! If you run an eCommerce website that sells baseball caps and the caps are popular in Australia but not so much here in America, don’t offer Australians $10 off their next purchase just because they referred someone who didn’t even buy one yet because they live there; instead, create something specific like an extra cap design available only through referrals (like these).

Provide Value In The Post-Purchase Period

One of the best ways to improve customer retention is to provide value in the post-purchase period. This can be done by offering customers a discount code or offering to refer a friend, sending an email with a thank you note and a discount code for their next purchase, or sending an email with a tip on how to use the product.

The goal is to keep your customers returning, help them become brand advocates, and spread awareness about your company through word-of-mouth marketing.

Nurture Leads With An Email Series

Email marketing is a powerful tool for converting leads into customers. According to MailChimp, email marketing is one of the most effective ways to nurture leads:

  • You can target your audience based on their stage in the buyer’s journey and tailor your content accordingly.
  • It’s easy to measure ROI with email campaigns because they’re automated and customizable.
  • Your emails are delivered directly into customer inboxes (which means they are much more likely to be read than an ad or social media post).

Be Data-Driven And Test Everything

When building a customer retention strategy, it’s important to be data-driven. By testing them out, you can only determine what tactics are working and which are not. By conducting regular A/B tests, you’ll be able to find out which actions are most effective for your customers and what may need some improvement.

What should you test?

  • Incoming emails: You could test different subject lines or body copy in an attempt to boost open rates on these emails. You could also try A/B testing the design of the email template itself to see if people respond better or worse with a particular layout.
  • Landing pages: If people aren’t converting on your landing page after they click through from an email campaign, try changing up some elements of the page like button colors or images used as backgrounds/layouts before deciding that this tactic isn’t working for you as well as it once did (it probably just needs some fine-tuning).
  • Retargeting ads: There are many variables involved when retargeting ads—the number of times they appear on someone’s screen before they convert; whether their browser is open at all times while browsing around online; etc.—so make sure you’re testing each variable separately so that no factors go unrecognized during this process!


Overall, we’re excited to see what startup businesses can do with these tips. We know that it’s not easy to start a new venture, and this list should help you get started on the right foot.

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