
What is customer retention? 5 ways to keep the right customers
Learn why customer retention matters and how loyalty drives long-term revenue.
Learn why customer retention matters and how loyalty drives long-term revenue.
There’s no better feeling than putting in the work to attract new customers and having it pay off. And there’s no greater disappointment than having them disappear just a few months later, all while your competitors are keeping their customers engaged.
The problem? While many businesses celebrate acquisition, it’s retention that propels your revenue over the long term. Acquiring a new customer costs four to 10 times more than it does to retain an existing customer, yet only 40% of businesses are focused on retaining customers, rather than trying to attract new ones.
It (quite literally) pays to keep your customers coming back for more.
So, what’s the secret? It’s all about building relationships. Eighty-eight per cent of customers say good service makes them more likely to purchase again, as per our latest State of Service Report . The better you’re able to deliver great experiences, the more likely customers are to stick around.
Here, you’ll learn how to measure customer retention and the strategies that can help you to keep your customers engaged for the long haul.
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Customer retention is a measure of your ability to keep customers engaged and buying from your business repeatedly. Rather than just focusing on attracting new customers, retention strategies emphasise building strong relationships that foster loyalty and long-term revenue.
Every business needs retention. SaaS thrives on renewals, retailers depend on repeat purchases, healthcare providers look to offer ongoing care, and financial services need to build trust to prevent customers from jumping ship. The better any business is able to retain its audience, the stronger its growth potential becomes.
This isn’t just about preventing churn, either. It’s about consistently creating customer service experiences that make customers want to stay. Achieving this means delivering personalised experiences and engaging with your audience to meet their needs proactively and turn every touchpoint into an opportunity to build trust.
Deliver personalised customer service at scale. Bring all of your support needs onto one platform so you can decrease costs while increasing efficiency.
Winning over new customers is exciting, but keeping them is what really makes the difference between success and failure. Here are a few customer retention benefits that show how retaining customers can have a measurable impact on your business:
In short, retention isn’t just about keeping customers. It’s a way of building business resilience and propelling growth for the long term.
Tracking customer retention is essential if you want to understand how well your business keeps customers engaged. Think of this as your north star metric that will help you gauge the effectiveness of your customer retention program and identify areas for improvement.
Here’s how to calculate your customer retention rate:
(Number of customers at the end of the period - New customers acquired during the period) / Number of customers at the start of the period × 100
For example, if your business starts the quarter with 1,000 customers, gains 200 new customers, and ends with 1,150 customers, the calculation would be:
(1,150 - 200) / 1,000 × 100 = 95%
A high retention rate indicates quality customer service and strong customer loyalty, while a low rate suggests you may need to improve your engagement strategies. Combine CRR with metrics like churn rate or purchase frequency to gain more nuanced insights into your success.
Aside from CRR, there are several other crucial metrics that will help you build a more complete picture of customer satisfaction and retention. Here are 6 of the most important.
Key metric | What it achieves | Formula |
---|---|---|
Churn rate | Measures how many customers you’ve lost over a given period | (Lost Customers / Starting Customers) × 100 |
Customer lifetime value (CLV) | Estimates total revenue from each customer | AOV × Purchase Frequency × Average Customer Lifespan |
Average order value (AOV) | Shows how much customers spend on average per order | Total Revenue / Number of Orders |
Purchase frequency | Measures how frequently customers make a purchase | Number of Orders / Number of Customers |
Net promoter score (NPS) | Assesses how satisfied customers are with your brand | % of Promoters - % of Detractors |
Sentiment analysis | Tracks customer feedback tone to detect overall satisfaction | Analysing reviews and social mentions, often with the help of AI. |
With the basics out of the way, let’s talk strategy. Here are five successful methods for building strong customer retention.
Engaging with customers en masse doesn’t cut it anymore. In 2025, customers demand personalisation.
As per our latest State of Service Report , 81% of service agents agree that customers expect a personal touch more than they used to. Businesses that can meet these expectations will be in a better position to build trust, foster loyalty, and – of course – retain more customers.
How can you achieve this? Here’s a simple step-by-step guide:
This will put you in a position to consistently deliver exceptional experiences to your customers and retain them for longer.
Sixty-one per cent of companies believe they’re proactive, but only 33% of customers agree (State of Service Report ). This divide in perception can be a major cause of churn, with customers who feel neglected being more likely to jump ship.
Closing this gap starts with offering 24/7 support across multiple channels, like live chats, SMS, WhatsApp, and voice. This reduces friction by ensuring your customers will always be able to reach you when they need help. You can use agentic AI solutions like Agentforce to automate much of this process while still maintaining human escalation for complex cases.
However, always-on support isn’t always enough. To truly be proactive, you need to anticipate needs before they arise. Leverage predictive analytics to identify customers that are at risk of disengagement by tracking things like behaviour patterns, purchase history, and recent support interactions. You can then trigger personalised outreach or recovery gestures to re-engage before they leave.
This will give you the opportunity to act before a customer even thinks about leaving, turning potential churn into chances to build trust and loyalty.
Reduce costs with an autonomous agent assisting your customers across channels any time using conversational language tailored to your brand’s voice.
Exceptional service begins with motivated teams. The problem? Seventy-seven per cent of service employees report heavier, more complex workloads than before (State of Service Report ).
Customer satisfaction can become an afterthought when agents feel overwhelmed. The key here is to equip your employees with the right tools and training to work with confidence and deliver exceptional service consistently. Here are some ways to achieve this:
When employees feel supported and well-equipped to deliver personalised experiences, customers feel this, as well, supporting your retention goals.
Today’s customers want more than the occasional discount. Eighty-two per cent of shoppers say a brand’s values need to align with their own, whether that’s sustainability, diversity, and inclusion or social impact.
This creates a huge opportunity for businesses to revolutionise the way they think about loyalty rewards. Rather than the occasional freebie or special offer, try these ideas:
To get a baseline here, try out predictive modelling to see which rewards will drive the biggest engagement. Analysing things like historical purchases and loyalty redemption data will help you see which incentives resonate most with different audience segments.
Salesforce Loyalty Management lets you build flexible tiered programs that recognise valued customers with exclusive perks and tailored experiences rather than just basic discounts and offers. This helps you create emotional connections and turn loyalty into brand growth.
Listening and responding to feedback alone isn’t enough – it’s turning customer insights into action that builds long-term retention.
Naturally, this all starts with gathering responses. Collect insights from post-purchase surveys, NPS scores, sentiment analysis, and service interactions. From there, analyse this data to spot potential problems and opportunities. AI tools like CRM Analytics can help with this.
From there, all that’s left to do is action responses and then close the customer feedback loop. You need to make sure customers know that their voices are heard and show them that their feedback has led to a real change. This will show you value your customers, and also encourage future engagement.
Service Cloud can support your retention efforts here by helping you track feedback, coordinate improvements and then report back to customers more efficiently. This saves time while keeping the whole process structured and transparent for your customers.
Effective customer retention strategies are built on consistently great customer experiences. Here are a few real-world examples of customer retention from businesses that are getting it right.
MECCA, Australia’s premium beauty retailer, faced the challenge of maintaining its reputation for personalised experiences in the age of online interactions.
With the help of Data Cloud, MECCA unified its in-store and online systems to connect customer data across every channel. This gave the brand the tools to deliver personalised experiences across web, email, app, chat, and beauty counters, including delivering tailored recommendations, content, and offers to every individual.
As a result, MECCA’s proportion of omni-shoppers tripled from 12% to 30% over three years, showcasing how powerful personalisation and proactive engagement can be when it comes to increasing customer retention.
MECCA is a Trailblazer
GoDaddy retains its valued customers by prioritising empathetic, uniquely human support. Their care team is encouraged to act without scripts and focus on collective problem-solving and trust-building over generic solutions.
By giving their teams the freedom to act with discretion and build up customer relationships, GoDaddy has been able to strengthen trust through personalised reactions. When customers feel heard, this transforms into loyalty and retention.
Rapidly scaling dental provider Pacific Smiles came to Salesforce looking for a way to manage growing patient volumes while ensuring engagement and efficient customer service.
With Data Cloud, Pacific Smiles’ teams can now find the knowledge they need instantly, facilitating faster patient care. Using Agentforce, the group also responds to customer inquiries 24/7, reducing appointment booking times by up to 80% while freeing up time for staff to focus on delivering exceptional services. This proactive service has increased patient visits by 30.4%.
With the advanced reasoning abilities of Agentforce, we can scale service without forgoing the expertise and personalisation we want to bring to every patient interaction.
Alice TelfordGeneral Marketing Manager, Pacific Smiles Group
Keeping customers engaged over the long term isn’t always easy. Even with great products and service, you can still face obstacles that can make retention a challenge. Understanding these common hurdles can help you refine your approach and build stronger customer relationships.
Automation may simplify customer engagement, but too much can feel impersonal. Customers want efficiency, but they also expect genuine, human interactions - especially when they need support. Striking the right balance between automated customer service processes and personalised touchpoints is key to maintaining trust and loyalty.
AI agents built in Agentforce can help you to meet the challenge of customer service by providing fast, personalised support at scale. They can manage both simple but time-consuming queries and automatically escalate to service reps when needed, all while adhering to your business's guidelines.
Many businesses focus on the sales journey but neglect the post-purchase experience. Without ongoing, personalised communication and incentives, customers may lose interest and trust and turn to your competitors.
Keeping customers interested long after their initial purchase means you need to provide continuous value. Scale out personalised content, targeted offers and loyalty rewards long after the sale is made to keep customers feeling connected to your brand.
Customers are bombarded with dozens of choices, which can make it harder to stand out. If your brand doesn’t consistently provide a unique value proposition, customers may be drawn away by competitors offering better deals, more convenience or a stronger emotional connection.
Again, personalisation is a driving force here. Differentiate with consistent, tailored messaging and proactive support to show customers you’re genuinely listening. This will pay dividends when customers are deciding between you and your competition.
Successful retention takes careful planning and adaptability. It isn’t a set-and-forget solution. You need to actively refine your approach over time to keep scaling.
To help with this, gather customer feedback as a core part of your customer retention strategy. This helps you refine your tactics, tailor your communications and stay ahead of changing customer expectations.
Top service teams are using AI and data to win every customer interaction. See how in our latest State of Service report.
When you prioritise meaningful relationships and deliver ongoing value, you create a loyal customer base that drives sustainable growth for your business. Tracking key metrics like customer satisfaction scores, customer lifetime value, churn rate, and purchase frequency ensures that you’re making data-driven decisions to keep customers engaged for the long haul.
The best part is that retained customers don’t just buy more — they become advocates for your brand, bringing in new customers through word-of-mouth. A well-executed retention strategy turns satisfied buyers into long-term supporters.
Service Cloud can help you boost customer retention by delivering a seamless and efficient customer service experience. With powerful tools for case management, knowledge management and omnichannel support, it ensures that customer issues get resolved quickly and efficiently.
This not only boosts customer satisfaction but also builds trust. Plus, by using data and analytics to track customer service metrics, Service Cloud personalises interactions, making customers feel valued and understood. The result? Stronger relationships, reduced churn and greater long-term loyalty.
Service Cloud also integrates perfectly with the rest of the Salesforce ecosystem:
Ready to get started? Try Service Cloud for free today to see how our platform can turn every customer interaction into an opportunity to bolster customer retention and drive growth.
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