Customer retention B2B B2C

Why is customer retention important?

Customer loyalty pays off – for the following reasons:

  • Acquiring new customers is expensive: The costs for acquiring new customers are high: advertising, sales visits from external service providers, calls, contract negotiations… With existing customers who buy again and again, these costs are omitted. The profit per customer is thus much higher.
  • Recommendation & word-of-mouth propaganda: Enthusiastic customers are like ambassadors for their own products. They share their positive experience with an average of three people. In this way they do free marketing for your brand and your products. On the other hand, a customer tells an average of seven people about negative experiences (source: Satmetrix) – who will definitely not buy from you!
  • Products and services are becoming more and more comparable: customer loyalty measures are excellent tools to stand out against competitors. Most markets today are so developed that there are hardly any really bad products left. This is why the aspects around the product or the service are becoming more and more important, e.g. the service and the relationship to the customer.
  • Customer Lifetime Value: The longer a customer stays, the more profitable he is in most cases: Existing customers cause lower costs. They are already created in the system. Your needs are known and the team can react faster to your requests. Meetings to get to know the customer are also less likely.

Customer retention measures

What can you do to effectively retain your customers? We explain eight measures and provide examples from B2B and B2C.

1.Outstanding customer service

A basic prerequisite for customer loyalty is that your customers are treated well and are completely satisfied with your service. Customer service can be divided into several dimensions:

  • Reliability: Keep your promises. Before you promise a customer an appointment or the completion of a request, make sure that you can actually keep it.
  • Speed: With smartphones, tablets and the like, customers are on the move on many channels and are used to getting a quick response. This allows you to stand out positively from other companies.
  • Goodwill: If a customer has a problem with one of your products, the return or exchange should be friendly and without much discussion. The prospect of an uncomplicated return also increases the purchase rate, e.g. in online shops: If free returns are offered, customers will find a purchase less risky and more willing to order.
  • Spread enthusiasm by unexpected, surprising achievements: Give your customers something they don’t expect: a few years ago, for example, Lego sent an exclusive key fob to customers that is nowhere available in the shops. In B2B: Bring cookies or sweets to a workshop or a larger meeting.
  • Friendliness: Actually a matter of course – but everyone has a bad day. Stay professional, even if you’d rather have a punching bag than a customer inquiry.
  • Particularly good advice and support: In addition to friendliness, it is characterised by foresighted behaviour: Think along, which problems could arise with your customer, and make customers attentive to it – including solution suggestion, of course!
  • Honesty: Customers will know when they are fooling them with an X for a U. Even if it is sometimes difficult: Honest lasts the longest!


2. Customer Experience Management: Find out what customers really want

To retain customers, you need to know what your customers really want. Ask your customers about this regularly with a customer survey. This enables you to identify trends and new needs in good time and react accordingly.

An example: Several of our customers are currently finding out with their surveys that the issues of sustainability and packaging avoidance are becoming increasingly important for customers. They have therefore begun to communicate their commitment to sustainability more clearly and are packaging products in a more environmentally friendly way.

You should definitely react to the feedback of your customers: You can contact unsatisfied customers directly and solve their problem (technical term: closed loop). This creates a wow effect. This strengthens customer loyalty enormously – in many cases you win a customer for life 🙂 The Net Promoter Score offers an efficient methodology for this.

3. Bonus programs, customer clubs, customer cards

Payback, Miles & More, the stamp card at the baker’s or hairdresser’s: German households use numerous customer cards. When developing a customer card or bonus program, make sure it is easy to understand, e.g: With a turnover of 100 € or 100 points collected, you will receive a discount of 5 € on your next purchase. (this is how Lego, now the largest toy manufacturer in the world, has handled it for many years). Gifts and discounts for loyal customers are also possible: there was a real hype about collectable figures from Lidl in Germany. Rewe, a german supermarket chain, often gives a bag of stickers as an addition to a certain purchase value.

4. Show genuine interest in the customer and his needs

Especially in B2B this is indispensable: Let the customer describe his problem in detail. Listen and be interested in his business: How is it structured, where are the biggest challenges? Then you can offer your customers exactly the products that really help them. Your customer will feel valued and will be happy to place orders with you again.

In B2C, you can express a special interest in your customer by, for example, describing your customer’s problem precisely in an ad or other advertisement, addressing it and highlighting the benefits of your product for this problem. In this way you can show your customers that you have really dealt with their needs.

5. Stay in regular contact with your customers

Remember: Send a newsletter with helpful content, instructions, tips & tricks. Share useful content on a blog and communicate it in social media. With business customers, you should call or drive by at least once a year. You can also send them new studies, invite them to a trade fair or offer them webinars. Most importantly, inform your customers when you launch new products or discontinue existing ones.

6. Personalization

For small companies with few customers, personalization is easy because personal account managers know “their customers” and can provide individual support. It becomes more difficult with a very large number of customers.

Here you can use technology to ensure an individual approach:

  • A clear CRM system in which all customer information is immediately available is the be-all and end-all for companies with a lot of customer contact. The customer advisor sees the customer history, possible problems in the past at a glance and can deal with them.
  • Marketing automation systems such as Hubspot or Emarsys enable “individual mass communication”. They evaluate according to pre-defined rules which articles a customer clicked on, e.g. in the newsletter, or what he frequently ordered in the past. They can then send vouchers, discount codes and newsletters with specific information. As simple as the tools make it: Make sure you don’t exaggerate and give your customers too much information.
  • Observation of customer behaviour, e.g. on a website or an online shop. This technology offers comprehensive possibilities – but a customer can quickly appear to be monitored. For example, a few minutes after I downloaded a video (with my details) from the website of a major CRM provider, I received a call from a sales representative who was able to follow live what I was watching on the website! So be careful here.

7. Build a community

In times of Facebook, LinkedIn and Co. it is getting easier and easier to build a community of interested or even enthusiastic customers. It is important that this community is regularly supplied with content. A company can ask questions about how customers feel about a certain topic and how they can best solve everyday challenges. Prize games and interactive activities also strengthen customer loyalty.

8. Organize customer events

The Red Bull and Harley Davidson companies are pioneers in B2C. Every year Harley Davidson sponsors the Sturgis Motorcycle Rally, a big meeting of fans. Motorcycles of other brands are burned on the event. Red Bull sponsors many athletes and organises events where they perform. 

Different types of events are common in the business customer and B2B sectors:

  • Business breakfast or business lunch when customers have little time
  • 1-2-day conferences where new products are presented, customers can exchange ideas on specific topics, famous keynote speakers perform and prizes are awarded for outstanding projects (One example is the NICE Interactions in London)
  • Roadshows that tour a country. Advantage: Many customers from different cities can participate comfortably.
  • Online trade fairs and online conferences. Lectures and content are streamed or made available in a portal so that customers can save themselves a long journey.

9. Cross-Selling

With cross-selling, you offer a customer several products that he needs from a single source. The customer saves time and has a fixed contact person. This positive effect promotes the purchase of further products from a company. For example, many software vendors offer not only their software, but also setup, usage consulting, support, project management and best practices.

Calculate the ROI of a customer retention measure

Important: In order to optimize costs, calculate which customer loyalty measures are really worthwhile for your company. To do this, use the Customer Lifetime Value: you determine what customers are contributing to you and compare this with the costs of the planned measure.

Forced vs. voluntary customer retention

In this article we have presented measures for voluntary customer loyalty. You can also try to force your customers to stay through:

  • technical and system-side barriers. One example is Apple: When I buy a Mac, I can only buy the accessories from Apple or at least need adapters from Apple.
  • a monopoly: The customer can buy a certain product only from you.
  • a contract: Most gyms bind their customers to a contract that lasts one or two years.
  • Change barriers: Switching to another provider would be very costly or time-consuming. Banks profit to a certain extent from this, because changing an account means a lot of effort. Investments in machinery also prevent industrial customers from switching to another supplier.

Voluntary customer retention is based on positive experiences and is in most cases more sustainable than forced customer retention. Customers get annoyed when they are held by a supplier even though they would like to change. They then incur more costs through more frequent service calls, more complaints or harm a company through negative word of mouth. Therefore, it is better to rely on voluntary customer loyalty measures. Your clients will thank you 🙂

Do you need support or further ideas for the implementation of the described measures? Simply contact us!

Contact us and get more information on customer retention

This post is also available in: Deutsch (German)

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