How to retain customers in retail with 8 examples

New customers are exciting, but old customers can bring your business more value. Use these powerful customer retention strategies to keep your customers close—and happy.


Make new friends, but keep the old. One is silver and the other, gold.

Girl Scouts around the country recognize this saying—myself included. This old adage taught us that while making new friends was exciting and fun, fostering our old friendships also had its value.

The same goes for customers.

New customers are always thrilling—they bring new relationships, reviews, and, of course, revenue. Growing your customer base is the fastest way to grow your business. However, it’s not the only way. In fact, it’s also not the most cost-effective way. 

That’s right. Attracting new customers is anywhere between five and 25 times more expensive than retaining the customers you already have. Additionally, the success rate of selling to a new customer is, at most, 20%. The same success rate of selling to an existing customer is 60% to 70%.

Research has also found that 12-15% of customers are loyal to a single retailer but represent between 55-70% of total sales. Wow.

Your current customers are highly valuable. They know your business, understand your products, have friends and family they could recommend as customers. Over 80% of consumers trust their personal networks over companies and salespeople—meaning your current customers’ word-of-mouth marketing could potentially bring you more new business than your own marketing.

Your customers are your best marketers. They’re cheaper, more trustworthy, and know plenty of potential warm leads. But before you deploy them as marketers, you must nurture them as customers. This is called customer retention.

What is a Customer Retention Strategy?

A customer retention strategy is a program or set of programs a company initiates to nurture, engage, and delight its customers and encourage them to repurchase from and evangelize its products or services. 

Customer retention strategies are often cross-functional—informing a company’s broader sales, service, and marketing strategy so as to best foster its customer relationships. 

These programs can either be initiated by a company, such as creating a customer education program, or by customers, such as signing up for a customer loyalty program.

Note: The above definition refers to a broad, overarching company approach to customer retention. We may also refer to the individual tactics, programs, and best practices used to retain your customers as strategies, too.

8 Powerful Retail Customer Retention Strategies (+ Examples)

If you’re unsure of how to retain your customers, consider following one of the below programs. Many of these can be offered in tandem as multiple ways to boost customer engagement and customer satisfaction—not to mention encourage customers to repurchase from and share your products and services.

1. Prioritize customer education.

Customer retention is born from customer independence. When your customers feel capable, empowered, and independent, they feel motivated to keep working with and buying from you. One way to ensure they feel this way is through customer education.

Companies shouldn’t stop educating once they close the deal. In fact, paying customers are perfect candidates for education as they’ve already expressed interest by investing in your products and services. Whether you’re educating on your products or your company as a whole, there are a few ways to empower your customers and encourage them to come back time and time again:

  • Send a series of post-purchase emails that introduce your product or service and provide videos, tutorials, how-to guides, and other educational information to assist with customer onboarding. Send one email every 1-2 days to trickle information to your customers and not overwhelm them with material.
  • Offer one-on-one training or educational sessions with customer success or salespeople at your company. This gives customers an opportunity to ask live questions and allows your employees to build rapport with loyal customers.
  • Create a resource center with videos, courses, and guides for customers who prefer to educate themselves at their own pace.
  • Provide a handful of live courses or webinars so customers can meet other members of your customer community and build camaraderie around your brand and products.

Example: DECIEM

Beauty company DECIEM offers virtual consultations with retail teams to help customers with questions about DECIEM products and skin care regimens. DECIEM at Home educates consumers on how to use its products and provides opportunities for DECIEM retail staff to sell customers on new regimens and skincare product lines. These at-home services set DECIEM apart in an otherwise busy and competitive skincare industry.

2. Start a customer loyalty program.

Customer loyalty programs are common strategies for retaining customers. Not only do they incentivize customers to share your products and services with friends and family, but they also reward your most loyal customers—who are most likely your most profitable customers.

The more these folks shop and engage with your business, the more they’re rewarded. Before creating a program for your business, survey your top customers to see what would make them feel the most appreciated and rewarded.

Tools like Endear can help you design a stand-out VIP experience that prioritize customer experience and service over price-slashing. Once you set your VIP standards, like lifetime spend or order volume, use the tool to design your experiences—such as VIP-only events or exclusive product releases. For some customers, these may be more valuable than discounts or coupons.

3. Proactively confront customer churn.

You can’t always read a customer’s mind (wouldn’t that be nice?), but you can notice when they’re about to churn. Tools like the Endear CRM can help you understand your customer behavior and order history.

With this knowledge, you can watch out for common churn signs, like spotty purchase patterns or a history of customer service inquiries. 

Instead of waiting until a customer decides to take their business elsewhere—which will make it harder for you to re-attract their attention—proactively reach out to offer a special discount or ask for customer feedback. Follow up a few times with a series of email marketing messages to keep your brand top-of-mind.

With Endear, you can segment your inactive customers based on details like their last purchase date and send personalized messages and incentives to re-engage them. Not only does this show you’re paying attention to your customers, but it gives them a reason to return to and shop your store.

4. Provide unforgettable customer service.

Did you know that 70% of consumers say they’ve spent more money with companies that provide fantastic customer service? As a business, you should view customer service as an opportunity, not a cost. Your customer service is how you differentiate yourself from competitors and attract repeat business. 

Moreover, fantastic customer service is more memorable than intriguing marketing or amazing products. Going above and beyond for your customer base gives them stories to share about your brand—and believe us, they will. While 35% of consumers post about poor experiences on social media, over 50% post about good ones.

Customer service at this level could include speedy response times, error-free shopping and delivery experiences, going above and beyond, and quick apologies. Another facet of customer service is building one-on-one relationships with your customers, also known as clienteling. When customers know and recognize members of your team, they’re likely to feel more comfortable asking questions and returning for future purchases.

Example: Bonobos

In recent years, men’s retailer Bonobos has transitioned from a fully e-commerce model to opening about 30 “guideshops” across the country. These shops allow customers to physically try on products traditionally sold online. If they’re interested in ordering any clothes, they can work with store associates to place online orders shipped directly to their homes. Offering these opportunities left lasting impressions on Bonobos in-store and online shoppers alike.

5. Personalize your offers.

Customers are inundated with hundreds of advertisements and emails every day. Very few things can catch their attention—but one surefire way is by making them feel like that advertisement or email is speaking directly to them.

Personalized offers encourage customer retention in three main ways:

  1. They show customers you know them and care about their birthday, anniversary, or whatever occasion your offer is celebrating.
  2. They give customers a reason to come back and shop with you using the coupon or discount code you’ve provided. 
  3. Most importantly—they help you foster a personal relationship with that customer. They give you a chance to show your brand personality and speak to the customer as an individual versus as part of a group (which is what most other advertisements do).

Example: Starbucks

Lots of businesses send rewards, but Starbucks has a stand-out birthday email. They send it first-thing in the morning, so it’s one of the first celebratory messages customers receive. The email is personalized and written in a friendly tone, e.g. “Treating you is our favorite thing”. Lastly, Starbucks delights customers in two additional ways: it extends the coupon one month past the birthday date, and it automatically uploads the reward to the recipient’s Starbucks account.

6. Customize convenience.

Convenience is key to retaining customers. A love for your brand can only take customers so far; making your products and services accessible and easy to use in turn makes your customers’ lives easier—to shop and build a loyal relationship with your business.

There are many options when it comes to empowering your customers with convenience. Some businesses elect to build a mobile application from which customers can browse and order your products … a good choice when studies show that 79% of smartphone users have made an online purchase on their phones in the last 6 months. 

This isn’t even to mention that 80% of consumers use smartphones inside of physical stores to look up product reviews, compare prices, and find alternative store locations. The takeaway? Mobile apps have benefits for e-commerce and physical stores alike.

Another way to provide convenience is with customer accounts, which make repurchasing easier as they keep order history and purchase behavior in one place. Tools like Endear can help in-store retailers offer a similar experience through personalized lookbooks—after customers have left your store, your associates can send them relevant products and customized digital closets to shop from.

7. Give your customers purpose.

Corporate social responsibility isn’t a new notion. Businesses across the world have introduced social responsibility measures into their mission statements and purchase programs.

As a consumer, the idea that a purchase can do more than bring you personal satisfaction is a compelling one. As a company, it’s wise to incorporate a broader mission into your company. Giving your customers a purpose gives them a reason to buy that’s bigger than themselves. It also gives them a story to share with others who may also want to partake.

Example: Warby Parker

Doing good is important, and Warby Parker recognized that when they built their business. The brand combines entrepreneurship and philanthropy and has become widely popular and successful because of it. Now, Warby Parker didn’t start marketing around an altruistic message with that success in mind; instead, the founders started with a mission they truly cared about and built a company that supported that and the business itself. This helped build a base of loyal customers who love Warby Parker glasses—and the impact of each purchase.

8. Thank your customers.

New customers help you grow your business, but repeat, loyal customers help you establish a brand. Without your customers, your business wouldn’t be where it is today. Thank your customers on a regular basis—whether on social media, your company blog, via email, or all of the above.

More importantly, don’t neglect to express gratitude after every store visit, website browsing session, content share, and purchase. Customers that feel valued and appreciated will likely return.

Example: Margaux

In 2020, the founders of Endear customer Margaux shared a heartfelt thank you on their blog, #onthegaux. The post expressed gratitude to their current and future customers for their loyalty and participation in a recent donation drive. This broke down any barriers created by generalized marketing and allowed customers to feel like they’re talking to the Margaux founders themselves.

Customer Retention Metrics

Customer retention looks different for each company and industry. For that reason, it’s best to avoid comparing your company’s strategies and programs with someone else’s—including your competitor’s. 

Instead, track your own customer retention to see how your business has shifted and grown. Let’s look at some key metrics and key performance indicators (KPIs) that can help piece together your customer retention story and the lifetime value of your customers.

Customer Retention Rate

Your customer retention rate (CRR) shows you what percentage of your customers remained loyal over a specific period of time. A low CRR means you’re retaining fewer customers; a high CRR means your customer retention is high. 

CRR is also a helpful metric for comparing customer retention over time, say quarterly or yearly.

Customer Retention Rate = [(CE - CA) ➗CB] x 100, where:

  • CE = number of customers at the end of the time period
  • CA = number of customers acquired during the time period
  • CB = number of customers at the beginning of the time period

Repeat Customer Rate

Your repeat customer rate is the percentage of your customer base that has made more than one purchase from you over a specific period of time. Repeat purchases don’t necessarily equate to retention or loyalty, but they can indicate customers who are likely to continue buying from and potentially evangelize your business. 

It’s also an important metric to understand since between 20 - 60% of your revenue can be attributed to your repeat customers.

Repeat Customer Rate = (RC ➗UC) x 100, where:

  • RC = number of repeat customers during the time period
  • UC = number of unique customers during the time period

Note: If you use Shopify, your repeat customer rate is calculated for you and shown in your Shopify reports.

Purchase Frequency

Your purchase frequency shows you how often customers are returning to your store to make another purchase. Use the same time frame as your repeat purchase rate to best understand this metric.

Purchase Frequency = (RO ➗UC) x 100, where:

  • RO = number of repeat orders placed during the time period
  • UC = number of unique customers during the time period

Average Order Value

Your average order value (AOV) shows you how much money your customers spend with your company per transaction. Use the same time frame as your repeat purchase rate and purchase frequency to best understand this metric.

Average Order Value = (TR ➗TO) x 100, where:

  • TR = total revenue earned during the time period
  • TO = total orders placed during the time period

Note: Shopify reports also calculates your AOV for you.

Customer Value

The goal of these customer retention strategies is to 1) keep customers around and 2) boost their value. Your customer value shows you how much each customer is worth. Once you have the rest of these metrics in place, understanding your customer value comes down to simple multiplication.

Customer Value = Purchase Frequency x Average Order Value

Customer value is the final piece of the customer retention puzzle. It’s a helpful metric when understanding how well your customer retention strategies are working and how your customer lifetime value has improved over time.

Check out how Endear can help you retain customers and boost revenue.