December 31, 2018 Last updated December 27th, 2018 2,897 Reads share

7 Customer Retention Strategies for Startups

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Acquiring a new customer is not an easy task. A lot goes behind it – from finding your prospects to lead generation and from trying all sorts of social media strategies.

And it is worthy to note that it costs 5 times more to acquire a new customer – than it does to keep your existing customer base.


Thus, focusing more on acquiring new customers than retaining the previous ones seem like an absurdity.

So now that we have established how important it is to retain your previous customers, we are inflicted by another question – how to instill that kind of loyalty in your customers so that they will not be inclined towards another brand? How to retain your customers?

In this post, we are going to talk about some wonderful strategies that will help you with the aforementioned questions.

Have a look at these 7 Customer Retention Strategies For Startups:

1. Why Are Your Customers Leaving?

This is the first step before strategizing anything. Of course, before finding the solution to a problem you would have to know what led to the problem, right?

So the best way to go about the whole process is by first analyzing and understanding why are your customers leaving in the first place?

Did you not serve them well?

Or maybe they were not happy with the product? Do they expect something more from your product?

These are the questions worth pondering over!

So your own assumption would hardly do you any good. One strategy that you can adopt in this case is to obtain customer feedback from the customers who are not willing to do business with you anymore.

As soon as you see that the customer has now terminated the contractor is no longer availing your services, immediately send a personal email. The email should, first of all, entail how you are sad to see them go. Secondly, ask your customer what led to this exit.

2. Use Net Promoter Score for Customer Retention

This strategy will actually help you carry out the first one as well.

Net Promoter Score is actually a very nice way to not only retain your existing customer but also to acquire new leads and prospects.

So what is a net promoter score?

Net Promoter Score (NPS) actually helps you ascertain the status-quo of the customers using a survey. It helps you determine the chances that your customer will recommend your product or brand to a third party, be it a friend or a colleague.


The answers are broken down into three categories:

  • Promoters (score 9-10) are your loyal customers who will have no qualms in buying your product and even referring to others.
  • Passives (score 7-8) are your satisfied customers but are not too willing to refer it to someone else. These type of customers are not as loyal and can be easily lured by competitive offerings and might switch to your competitor.
  • Detractors (score 0-6) are unhappy customers. These types of customers are not at all satisfied with your services are can damage your brand by disseminating negative reviews and word-of-mouth.

So based on the net promoter score, you can easily determine the status quo and see which customer are more prone to leaving your subscription.

On this basis, you can follow up with your customers accordingly and reach their satisfaction level

3. Ask For Sales Referral From Your Loyal Customers

The above two strategies have helped you distinguish between your loyal customers and the customers who are likely to leave your brand soon.

So you can ask your loyal customers for some positive and unbiased referrals. Business referrals are the best way to re-engage you are leaving customers and compel them into staying. Moreover, referrals are also a nice way to garner new leads.

For one, word of mouth helps to convince about 20-50% of people in changing their purchasing decisions.

According to a Nielsen survey on trust and advertising, referral marketing stands the highest in convincing the customers, out of every other demographic including editorial content, all forms of ads, and brand sponsorship.


So leverage your positive referrals to re-engage your living customers and force them to think that is it the right thing to leave your services?

If they see that other people are garnering so much profit and satisfaction with your services then they might just be convinced to give you another chance.

4. Improve Your Customer Service & Experience

No matter how exemplary your product is but unless you back it up with equally exemplary customer service, then your customers are unlikely to continue availing your product or service.

According to a survey, 68% of customers leave because of the poor treatment that they received.


Poor customer experience directly impinges your growth and costs you many customers.  

Have a look at some of the key parts that you must focus to improve your customer’s experience:

  • Customer onboarding process – Don’t think that your task is done as soon as you get a customer on-board with your brand.
    Actually, as soon as the customer comes on-board with you, your main task is to provide the required training that they need and to explain them everything they need to know in order to use your product effectively.
  • Positive customer service and experience – Now comes the long scale process that will span across the whole customer lifetime.

    Your customer needs to know that you care about their problems and are willing to listen to what they have to say.

    And this is where the customer service comes into play. One of the best ways to provide a stellar service experience is by providing a live chat solution that is available to your customers at all time. This way, your customer won’t even have to search for your contact number and all, they can simply open the chat box and start chatting to your customer care executives directly.

5. Work On Customer Relationships

At first, this strategy sounds somewhat similar to the previous one. But let us dissect this and see how it is actually a very different thing.

The previous strategy talks about how to improve your customer service but this one focuses on engaging your customers so that you can improve your customer relationship and will be able to engage on a one to one level.

One way to do it is by rewarding your loyal customers. Have you ever heard of customer loyalty programs?

These loyalty programs help the companies reward the customers that have been with them for an extended period of time. For example, some companies offer something extra in the form of the product or service they provide.

This can definitely help you to retain your customers. Plus, it can also lead to 54% of customers increasing the amount of business that they do with you.


Another way to engage your customers and improving your customer relationships is by building a social community. For example, you can start a Facebook or LinkedIn group, depending on which social media channel contains most of your customers.

6. Work on the features that matter the most

This strategy is most important for SaaS startups. As your brand or company progresses, you will realize that your customers are prioritized some features much more than the others.

As soon as you come to this conclusion and it becomes clear that which features are most important to your customer base, make sure that you are working towards increasing the quality of those particular features.

If you make the most required feature even better, then your customers will be less and less tempted to cancel their subscription or contract.

7. Offer better upgrades, discount coupons, and other rewards

Who doesn’t like freebies? Of course, everyone does!

So surprise your customers by offering them surprise upgrades, discount coupons and small rewards that are relevant to them.

So what kind of freebies and surprises can you offer your customers?

  • Extra storage
  • Some extra free features
  • A discount coupon
  • One month (or even more) extra subscription for free

According to a prominent Columnist Peter Economy, “the secret to delivering great customer service is to give your customers a surprise–something they didn’t expect. It’s those unexpected experiences that leave customers with a story they are eager to tell.”

Seeing how much you care about them and their happiness, your customers might even end up increasing their purchase or might start availing an even larger subscription package.

Surprising and offering freebies to your customers is a very solid customer retention strategy, especially when you are just increasing your foothold in the industry. So use this strategy and see how your customers will keep coming back.

Summing it all up…

As you have probably heard a gazillion of times before (in this article as well) – obtaining new customers is way more difficult, not to say expensive than retaining the existing ones.

Thus, we just talked about all the necessary strategies you need to consider when it comes to retaining the customers for your startup. Don’t forget that it is absolutely worth investing in things like a customer loyalty program because the return on investment (ROI) garnered would definitely surpass your spendings.

Another important thing that we talked about is the importance of customer feedback and then immediately following up.

In the end, it all comes down to keeping your customers happy, satisfied and important. So use the aforementioned tips and improve your customer retention rate.

What strategies do you think will work best when it comes to improving customer retention for your startup?

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