Customer Retention: 6 Tips to Improve Client Retention in 2025

Customers are not a use-and-dump; worryingly, most businesses treat them as such. 

According to Invesp, only two-fifths of brands pay equal attention to acquiring and retaining new customers. Meanwhile, CustomerGauge highlights that over 44% of companies don’t even track their retention rates. 

This oversight is risky, given that returning customers are 70% more likely to make another purchase compared to only 20% of new prospects. And that underscores the increasing importance of customer retention in boosting ROI.

In this article, we’ll discuss the benefits of customer retention and expert tips to improve your rates.

Benefits of Customer Retention

A 5% increase in retention rate reportedly boosts ROI from 25% to 95% over a period of time. And here’s why:

Faster Time-To-Purchase

Acquiring new customers is a lengthy process, starting from raising awareness about your brand, engaging potential customers, and building interest and trust. This multistage journey could last several days or weeks if B2C (Business to Customer) or years if B2B (Business to Business).

“For a fast-paced business, relying solely on this approach is not ideal, as you can’t bet your year-on-year revenue on such a lengthy and resource-intensive process. Moreover, this cumbersome method forces you to allocate a disproportionate amount of your resources to customer acquisition, often at the expense of other critical, finance-demanding areas of your business, such as product development, customer support, and operational efficiency”, Gary Hemming, Owner & Finance Director at ABC Finance, says.

On the other hand, customer retention helps you deal with the oldies—people who have patronized you once or more and are already aware of your offerings. So, you get to skip the bogus brand awareness marketing since you’ve done them before and focus on nurturing existing relationships.

By leveraging this existing relationship, you can easily remarket previous products to them or push fresh ones out. Smile also found that existing customers are 62% more likely to repurchase from your brand after two previous transactions.

Reduced Customer Acquisition Cost

Customer acquisition cost (CAC) is the total amount spent on gaining a new customer. About a decade ago, e-commerce businesses spent about $9 per acquisition. In 2022, this figure increased by 222% to $29 per new customer, which is bound to increase further with time.

Matthew Channell, Owner of TSW Training, says, “While acquiring new customers is necessary for every business to thrive, you can drastically slash your budget by building retention. The more customers you retain, the less you need to spend on attracting new ones, allowing you to reallocate those resources to other growth opportunities.”

Besides, customer churning costs US businesses about $168 billion annually. Customer retention lowers your churn rate and ultimately helps you save money through reduced CAC  or gain revenue from the repeat customers you would have otherwise lost.

Effective Brand Loyalty and Advocacy

In Yotpo’s report, a third of customers say it takes three purchases to become loyal to a brand. For some, it takes only the first purchase and a positive brand experience. Smile’s data also shows that consumers’ average order value increases with time or the longer they buy from you.

This is because customer retention focuses on nurturing lasting relationships. It is a stepladder process—every positive purchasing experience gradually transforms buyers into loyal clients. And 39% of such clients are willing to continue buying from you even if they can get the same services at a cheaper rate elsewhere.

Interestingly, 60% of loyal customers advocate or commend their favorite brands to friends and family. Given that 91% of B2B buyers depend on word-of-mouth marketing, brand advocacy can become an almost effortless means of acquiring new customers and generating more revenue.

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6 Expert Tips to Improve Customer Retention

Let’s explore some proven customer retention tips to implement.

1. Know Your Customers (KYC)

“Show me what I need, not what you think I need!!!” says every customer.

Providing personalized services that align with your client’s needs results in satisfaction. Satisfied customers are more likely to stay than those who don't. There’s no two-way around it. 

75% of consumers say personalized communication influences whether they choose a brand or repeat purchases, and 80% are willing to share their personal information in exchange for better deals or offers.

Moreover, over 40% of consumers wish brands knew more about their style preferences. And failing to fulfill that wish means you’ll end up with frustrated customers who want nothing but to ditch you for competitors. This bumps your churn rate and increases CAC.

However, personalization is difficult if you have no data on your customer besides generic information like name, address, and payment card.

To collect relevant customer data, do the following: 

• Directly engage your customers via emails, chats, or even calls to understand their key needs.
• Ask clients about their preferences, needs, and satisfaction levels through online surveys, feedback forms, or post-purchase questionnaires.
• Use analytics tools, like Google Analytics, to track user behavior on your website or app, such as pages visited, time spent, and actions taken. This helps identify interests and usage patterns.
• Analyze previous purchases to understand buying behavior, preferences, and product interests. This data can inform future personalized recommendations.
• Track customer interactions with support teams, including common inquiries and concerns.
• Review the frequency, amount, and type of purchases to determine the products or services most appealing to different segments of your customer base.
• Monitor customer mentions, comments, and direct messages on social media platforms to gain insights into preferences, trends, and feedback.

Unify information from each channel on Customer Relationship Management (CRM) software, such as Hubspot. Platforms like Gmelius help you centralize email data from customer interactions and integrate with Hubspot and Salesforce for easy export and analysis.

The analysis should give you a clearer picture of your customer’s pain points, other easily ignored needs, possible loopholes in your service delivery, and opportunities to leverage.

2. Create A Seamless Onboarding Experience

“While you’ve likely provided demos and all sorts of resources before selling, your clients still need a hand-in-hand walkthrough post-purchase, showing them how to do what and when. This helps reduce the learning curve and streamline product use at all stages of the user journey,”

Brooke Webber, Head of Marketing at Ninja Patches, advises.

63% of customers believe onboarding is crucial when deciding whether to subscribe to a brand or not.  86% also say they will remain loyal to a brand if it provides a continuous onboarding experience. 

Of course, onboarding effectively retains your clients only when it provides the right experience. Moreover, 74% will switch to another competitor if the process is complex.

To create an effective onboarding experience that retains clients, follow these steps:

• Provide a step-by-step tutorial right after purchase. It should explain key features and demonstrate how to use the product effectively.
• Tailor onboarding templates and content to different user needs and roles to help clients see value aligning with their goals.
• Break down complex tasks into simple, actionable steps to make the learning process smooth and engaging.
• Use interactive guides, pop-ups, or tooltips to show clients how to navigate your product without feeling overwhelmed.
• Offer easy access to resources like video tutorials, FAQs, and documentation that clients can refer to anytime.
• To help clients feel supported and valued, give them a go-to person for questions, especially in the early stages.

Finally, collect continuous feedback on each client onboarding process to refine your strategy. 

Grant Aldrich, Founder of Preppy, adds, "Onboarding should also be an ongoing process, even for existing customers. Each renewal, repeat purchase, upgrade, or product update provides an opportunity to re-engage clients, guide them through new product features or services, and ensure they continue to find value in your offerings.”

3. Set Clear Expectations From The Beginning

“What I ordered vs. what I got.” This is a popular trend on social media platforms like TikTok and Instagram, where customers most often get the exact opposite of what they ordered.

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Grant Aldrich, Founder of Online Degree, says, “While overselling your product features and solutions can quickly net sales, it can also stretch customers’ expectations. Once you’re unable to meet these expectations to the extent you promised, customers lose their trust in you and become disappointed or even frustrated. This lack of transparency busts retention.”

94% of customers are likely to be loyal to businesses that are honest about their offerings right from the start. 31% believe trustworthiness is the most essential aspect of a brand, and 81% say they need to trust a brand to consider buying from it.

With the growing importance of transparency, it’s a must to communicate your actual offerings without overselling or underselling. This builds trust and loyalty, which in turn boosts retention rates.

Here are some steps to do that:

• Ensure your product descriptions are accurate and detailed, clearly stating what customers can expect.
• Focus on your product's real value without overstating its features or capabilities.
• Share testimonials, case studies, or examples that accurately showcase how customers have benefited from your product.
• Communicate clear timelines for delivery or expected results so customers know what to anticipate.
• Invite potential customers to ask questions before buying, allowing you to clarify any concerns or misinterpretations upfront.
• Regularly review and update promotional content to reflect the latest features, upgrades, and product limitations.

Lastly, follow through on promises. You should only make promises your team and product can realistically deliver.

4. Develop A Client Health Scoring System

A client health scoring system (CHSC) is a data-driven strategy that uses several key performance indicators, such as engagement, satisfaction, financial metrics, and product usage, to assess the likelihood of a client continuing with your brand or churning. 

Let’s break down each KPI.

• Engagement: Measures how often and meaningfully a client interacts with your business, such as logging into a platform, attending meetings, or engaging with support.
• Satisfaction: Assesses client happiness and loyalty through feedback scores like NPS (Net Promoter Score) or CSAT (Customer Satisfaction Score).
• Financial Metrics: Tracks payment reliability, contract value, and renewal rate, indicating a client’s financial commitment and potential for growth.
• Product Usage: Analyzes the frequency and depth of product or service use. This shows how integral it is to the client’s operations and goals.

Manually, you can assign a score to each KPI and sum it up to 100%. Or you can feed your data to AI programs like ChurnZero, Totango, and Salesforce Einstein. These systems pull data from your relevant and authorized sources, including Gmelius’s database, and analyze them to determine each client’s health score.

After analysis, you should have a charted view of each client’s health, which usually falls into three categories.

• Healthy (80–100): Engaged, satisfied clients likely to renew or expand.
• Neutral (50–79): Moderate engagement; requires some improvement.
• At-Risk (0–49): Low engagement or satisfaction; prone to churn.

For already healthy clients, continuous engagement is sufficient. Neutral clients are neither there nor here, so they can use a little bump, possibly one-on-one interactions or more specialized support.

At-risk clients are less likely to renew. The key to managing them lies in figuring out what’s wrong and fixing it right away. This includes holding direct conversations, rolling out surveys, analyzing support history, and providing personalized solutions, such as dedicated account management, training sessions, special offers, regular check-ins, and fast response times. 

5. Provide Consistent, Proactive Customer Support

Proactive customer support involves anticipating customers' needs and addressing them promptly, even before they ask. This approach makes customers feel valued and can drive loyalty.

92% of consumers a company proactively contacted said it positively changed their perception. Another 82% reported taking action after a positive proactive experience. 

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Mordernly, proactive support leverages predictive AI-powered programs to identify trends and patterns in customer data, ensuring nothing falls through the cracks. For instance, industries like manufacturing and steel rely on specialized management ERP software to track complex projects, analyze previous processes, and preemptively snap out issues before they escalate.

But you can also implement the following steps:

• Initiate preemptive communication by sending customers alerts, reminders, or guidance about potential issues (e.g., system maintenance notifications or product updates).
• Offer educational resources, such as FAQs, guides, tutorials, and tips, that help customers use the product more effectively and avoid common pitfalls.
• Proactively identify and resolve issues (such as known bugs) that may impact multiple customers, sometimes before they even notice a problem.
• Use analytics to track customer usage and identify those who may need extra help or are not fully utilizing key features. Then, reach out to offer assistance.

Consistency and the speed of delivery are other essential factors to consider. Existing customers are bound to your business through a financial commitment. So, they expect the top of whatever you have to offer. 

In that case, integrate AI chatbots, a unified inbox for email like Gmelius, and other efficiency tools to reduce response time. Ensure your tone of communication is consistent across your support channels. Your clients shouldn’t feel like they’re talking to a disjointed band of teams.

6. Show Appreciation With Exclusive Offers Or Perks

Kathryn MacDonell, CEO at Trilby Misso Lawyers, says, “A little gesture goes a long way in building a brand-customer relationship and encouraging loyalty. Appreciate your clients with special deals, discounts, perks, or even zero-cost offers. Of course, this strategy is most effective during unique moments like your clients' birthdays or anniversaries. And that’s why having detailed customer data is crucial.”

You can flexibly modify the value of each offer or gift based on how long a customer has been with you or how much they’ve spent. For instance, Payoneer gives a $750 cashback when customers transact up to $50,000. The higher a client’s lifetime value, the more valuable the offer should be.

Besides exclusive offers and perks, strategies like occasional check-ins help maintain a personal connection with customers and show genuine interest in their experience. These touchpoints provide opportunities to gather feedback, address emerging issues, and reinforce trust.

Wrapping Up

Customer retention is unarguably essential for business growth and success. The more customers you retain, the less you spend on acquiring new ones, and the higher your ROI from repeat purchases.

To enhance your retention rates, start by gathering relevant data on your customers and understanding their needs down to a thread. Provide a seamless onboarding experience and set clear expectations right from the beginning of your sales funnel. Develop a client health system score with AI assistance and implement proactive customer support.

Lastly, appreciate your clients with special offers, one-time deals, gifts, and discounts to boost customer-brand relationships.