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For startups looking to scale or simply to stay in business, customer retention is key. It’s not enough to only advertise to new or prospective customers; you have to keep the people who have already made a purchase with your brand, and who you have the opportunity to forge long-term relationships with.

Unfortunately, customer retention can be very tricky, especially in today's competitive digital marketplace. With that in mind, let’s break down five key strategies for startup customer retention that you can implement starting today.


Why Prioritize Customer Retention?

Simply put, it's usually cheaper to keep customers than to acquire new ones wholesale. When beginning a startup and trying to build an initial audience of customers or leads, you often have to spend a lot of money on advertising and marketing.

Once you acquire your first group of customers, you should do everything you can to keep them. You’ll pay more money in the long run if you constantly have high customer turnover and need to acquire new customers. In comparison, you’ll save money and make greater profits if you keep your customers more often than not.

More customer retention means you have to spend less money on attracting new customers. That money can instead be spent on better marketing campaigns or other aspects of your startup. Therefore, let’s take a look at five customer retention strategies your startup can leverage for success: 


Self-Service Tools

These days, customers like being able to solve their own problems, especially when the solutions aren’t very technical. Whether your brand offers a SaaS product, a program, retail products, or something else, you should give your customer self-service tools via a portal or section of your website.

Self-service tools can include:

  • FAQ pages or knowledge bases
  • Detailed tutorials for your products and services
  • Troubleshooting guides
  • And more

For instance, many banks now have tutorials for most of their tools and website options. Then, when a customer wants to start a business checking account, they know exactly how to do so without having to wait to speak to a person.

Overall, self-service tools give your customers more power, which they always appreciate. Furthermore, it means your first customers will not overwhelm your small, early customer service team. Self-service tools become even more important as you offer more complex products and services.


Personalized CS Efforts

That said, you should still have a customer service team standing by at the earliest opportunity. Customer service is more important in this day and age than ever for one big reason: personalization.

With so many competing brands to work against, your company needs to stand out. If you can’t do that via your products or services directly, you need to do it via your customer service. Personalized customer service, which can often be achieved through CRM software or similar tools, enables your customer service team to:

  • Make each customer feel special and recognized
  • Help individual customers as best as possible
  • Keep clear records of individual customer interactions
  • Tackle problems efficiently and fully

Personalized customer service can include anything from using customers’ names to highlighting special products for them in marketing emails and much more. Overall however, personalized customer service is beneficial because it makes your target audience less likely to visit a competitor.

If a customer feels recognized and that you have personalized their experience, they’ll be more likely to stick with your brand even as prices change and market conditions shift.


Chatbots

Related to personalizing customer service are chatbots. For instance, chatbots can be personalized to automatically reference customer names, mention local geographic places or references, or even reference a customer’s own previous tickets or concerns.

But why are chatbots so important for customer retention? Chatbots are great for this purpose, because they can prevent customers from clicking away if one of your CS agents is busy or handling another inquiry. That's a chief concern for startups that may not have big employee rosters or dozens of CS agents to handle complaints 24/7.

If your CS team is small, chatbots can be lifesavers. They can:

  • Direct consumers to the FAQ pages or knowledge bases mentioned earlier
  • Answer questions for site visitors directly, taking some of the burdens off your CS staff
  • Acknowledge consumer complaints, so your CS agents are better ready to handle their issues once available

More than anything else, chatbots make customers feel like they are about to receive attention from a CS agent. In the best-case scenarios, they can handle complaints or technical questions quickly and easily, which also helps customers feel satisfied with their interactions with your brand.

Overall, satisfied customers mean customers are less likely to leave for a competitor product!


Offer Perks & Advantages to Long-Term Customers

In the long term, you can improve customer retention for your startup by offering perks and advantages to your current consumers or target audience. For instance, you can implement a loyalty program that rewards consumers for sticking with you over months or years.

While this perks system is most advantageous for subscription-based businesses, it can work for any startup that relies on consistent customer purchases. A loyalty program can include discounts on future purchases, free shipping, and other benefits. Other potential benefits include:

  • A simplified invoice system for faster payments
  • Free perks or beta access to new tools
  • Rewards like points to use at your store

Those same benefits can also help keep customers coming back to your brand again and again. Think of it as sweetening the deal for your target audience members. The more rewarding you make it for someone to keep purchasing from your company, the more likely they'll do so rather than jump ship to a competitor.


Build a Community for Your Brand

Last but not least, don’t discount the power of brand communities. People are more likely to stick with companies they feel emotional attachments to–and communities are great ways to facilitate those attachments in organic, helpful ways.

Communities, in this sense, can include everyone who makes a purchase from or subscribes to your brand. You can build communities in several different ways:

  • Start a forum on your website, where customers can communicate with each other, share stories, or even ask for technical support. Note that this may require you to expand your CS staff so you can moderate the forums appropriately.
  • Start competitions or giveaways on your site for community members. This is a great way to implement some of the perks and advantages mentioned above, like discounts or free shipping prizes.
  • Interact regularly with your consumers on Facebook, Twitter, and other social media platforms. A social media manager can be very helpful on this point. The more you interact with your target audience on social media, the more your brand will feel personable and real in ways that competing brands do not.

Communities can help with customer retention when your audience members reach out and communicate with each other. As they build friendships and discuss recent purchases, they’ll want to stick around and stay with your company since they’ll feel like they are part of a family. This is an invaluable tool if you want to improve customer retention across the board.


In the end, customer retention should be among the key priority metrics for many startups. The greater customer retention you achieve, the more profits you can expect to make in the long run, and the faster your organization will be able to scale up. Getting people to try out your brand is comparatively easy—keeping them loyal is harder, and necessitates a strategic approach to customer retention.


This guest post was written by Nahla Davies, a now freelance writer with a background in enterprise and government-level RegTech consulting, who focuses on content development for compliance and training, through technical writing, software documentation, and more.

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Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $1.75BN in funding, and building products people love across over 200 cities worldwide.

See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey


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