“Make a customer, not a sale.” – Katherine Barchetti

As a startup, it’s very easy to focus all your resources on gaining as many users as possible to grow rapidly.

Of course, acquisiton is an essential part in the early stages of a startup business; this is how you build your brand and your revenue. It’s also especially important for companies that require an extensive database of users to thrive (social media sites, for example). However, it should not end up being your primary focus. Retention is quite undervalued and there’s a strong argument to concentrate your attention on existing customers than acquiring new ones.


Firstly, and probably most importantly, customers are expensive to acquire.

As the sentence suggests, it costs less to retain an existing customer than to acquire a new one. Research shows that the cost of finding a new customer can be up to 5x more than keeping an existing one. Building and retaining a loyal customer base just makes economic sense – it can help your business save money, as well as making some too.

It has also been shown that repeat customers spend more and spend often.

Loyal customers, almost by definition, will purchase your goods or services again and again over time, spending more money, more frequently. On average, repeat customers spend over 60% more per retail transaction than new ones.

Lastly, loyalty equals acquisition in the long run.

Long-term consumers are obviously more likely to generate positive word of mouth, otherwise, they wouldn’t be a customer in the first place! This is a highly powerful tool as they’re much more likely to introduce your business to others (which is essentially free advertising), plus people are generally more influenced by people they know and trust.


These are just a few reasons to spend more time focusing your business efforts on keeping customers, rather than gaining new ones. Although this is all well and good, how do businesses actually keep people coming back for more? Modern customers are smart. They know how to get the best deal and will happily pop off to a competitor if you don’t give them what they need. Unfortunately, there’s no ‘one-size fits all’ approach to this, otherwise everyone would be doing it. Simply put, it takes time, research and experimenting to see what works and what doesn’t (rinse and repeat until successful).

Although there isn’t one particular foolproof method for retaining customers, a lot of companies that boast great success in their customer retention endeavours all have a few things in common that you could apply to yours.

Understand your customers and why they are with you

You’ll need to find out why your current customers are with you, instead of your competitors. Is it because of your customer service, your convenient location (if your business has a physical residence), or low prices? The best way to find this out is not simply to guess, but conduct research. Don’t be put off; it doesn’t have to be extensive. The simplest way would be to implement an online feedback form, or even to create a web-based customer satisfaction survey to send to all of your clients by email.

However, it’s important to note that with these measurements that usually only those with strong opinions take the time to answer, and this includes the negative ones. Don’t be disheartened if you receive some criticism; it will give you an indication of improvements that can be made.

Deliver exceptional customer service

This is what sets apart good companies from great ones.
The first step in improving the quality of your customer service is to look within the business and ensure your team are enthusiastic and know what they’re talking about. If you’ve ever been on the phone to dreadful customer support, you know just how frustrating it feels to be passed from one ‘expert’ to another.

Phone trees are awful, and if you can offer an alternate way for users to contact you, this can make a huge difference in the level of customer happiness. We’re a huge fan of Intercom here in the office. It allows customers to bypass all the button pushing and chat directly with an agent who can help them. You can proactively start targeting your live chats depending on a visitor’s behaviour on your site and keep the conversation alive by following up via email if a visitor leaves. It is pretty cool, but there are many similar tools out there, such as Livechat and Tawk.

This leads onto the next point…

Providing a unique and personalised experience

With all the analytics tools on the market, there’s so much data that can be used to great effect to make a user’s experience more relevant to them. Data such as where the user came from, their location and browsing behaviour can be remembered across sessions and a rich picture can be constructed of their wants and needs.

This consumer data can be segmented, making it much easier to group users according to their likes and dislikes, but also to filter them as individuals. It adds another dimension to online shopping in particular, helping customers locate relevant products quickly, and ultimately leading to a better online experience and more sales.

A personalised website improves the customer’s experience and demonstrates to them that the brand is proactively making an effort to understand their needs.

Rewarding loyalty

Tried and tested methods of customer retention also involve recognising and rewarding people for their commitment to the brand by way of loyalty cards, stamps or little incentives to show customers that they are valued. This gives them something tangible – a real reason to come back.

As the office and local postman know, I’m a huge fan of ASOS. Not only do I get the occasional free snack with my delivery parcel (hello free lunch), but they’ve also just launched a new rewards system which enables me to earn points to go towards, you bet, more shopping at ASOS. Similar reward schemes exist as loyalty cards primarily in the supermarkets and coffee shops, and they’re remarkably effective at getting shoppers to return to their stores.

Retention > Acquisition

If your startup days are behind you and your company is well established, the chances are that growing your business will be cheaper and quicker if you retain and concentrate your attention mainly on your existing client base. This is not to suggest that you need to abandon acquisition efforts entirely, but converting customers into repeat purchasers will, in the long run, be more profitable. It all depends on the nature of your business.