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9 strategies to improve customer retention

For many businesses, the top priority is bringing in as many new customers as possible. However, sometimes they forget to keep their existing clients on board and happy.

Why is this a problem? Typically, it’s more expensive to bring on new customers than to retain existing ones.

Here’s why this approach is a real issue: The average customer acquisition cost (CAC) is around $600¹ (ouch!) across industries. But it can be as little as $260² to retain an existing client if your retention costs for 30 days were $8,000 for 3,000 active customers.

This guide will cover the average customer retention rate across industries and some expert strategies you can use to retain your current customers. We’ll also discuss the perfect tool to help you keep your audience on board and engaged for as long as possible.

TL;DR

• Retaining customers is far cheaper than acquiring new ones, and the average retention rate across industries sits at around 75 per cent.

• Loyalty improves when support teams are well trained, experiences feel consistent, and trust is strengthened through feedback, social engagement, and personalised rewards.

• Re engagement tactics such as loyalty programmes, win back flows, and helpful product education bring inactive customers back.

• Reducing friction through faster responses, better hold experiences, and a seamless omnichannel setup helps prevent churn and keeps customers loyal.

• Aircall improves retention by unifying channels, routing customers to the right agent quickly, preserving context across interactions, and providing AI insights that lift every customer conversation.

What is customer retention?

Customer retention is all about keeping your existing customers happy, coming back for more, and not switching to a competitor.

What makes customer retention important is that keeping an existing customer is usually easier and cheaper than finding a new one.

Plus, loyal customers improve your bottom line, spread the word about your brand, and help your business grow over the long term.

How to measure customer retention rate 

Your customer retention rate shows how many of your customers stay with you over time. It’s a simple way to see how loyal your customers are and how well your business keeps them coming back. On average, the customer retention rate across all industries is about 75.5%.

When calculating your customer retention rate, use this formula: Number of customers who made more than one purchase ÷ Number of unique customers

You should always aim to have a 100% customer retention rate, but it’s important to remember that this number does also depend on your industry. Let’s take a quick look at the specific industry benchmarks for customer retention rates below:

Now, let’s look at these industries a little more closely.

Retail

The retail industry has quite a low customer retention rate, which could be due to high competition and low barriers to entry and exit. This means retail businesses need to work extra hard to provide excellent customer experiences.

Professional services

Companies geared toward providing professional services, like management consulting or accounting, have a much longer sales cycle (around two to three months) than B2C companies, so their customer acquisition costs are also higher.

Because of this, these companies often focus on creating a highly personalized customer experience by providing each client with a dedicated team member responsible for their account.

IT services

Customer retention is super important in IT because most clients need long-term, ongoing support. What keeps customers loyal in this space isn’t just good service, but consistency and reliability.

Media

Media companies may not personalize their services for each client, but they often handle large volumes of customers. Most of them also have large and flexible marketing budgets, which makes it easy for them to retarget past clients. 

Key takeaway: Whatever industry your business is in, you should always aim to reduce churn (which is the rate at which customers leave your brand) and keep your customer retention rate above the average. 

While this number often varies, many consider a churn rate of 3% to 7%% or above a sign that your customer retention strategies aren’t working. It’s super important to track your own retention trends over time and set targets based on your business model, customer lifecycle, and growth goals, rather than relying on industry averages.

9 Strategies to improve customer retention

You can usually resell to a past customer anywhere between 60% and 70% of the time. The success rate when selling to a new prospect is just 5% to 20%, which just isn’t ideal.

Let’s explore a few tangible strategies that you can put into practice to improve customer retention.

1. Train your support team

Businesses should keep in mind that customer service means more than just being helpful when answering questions and addressing customer concerns. It also means training your staff to create a positive customer experience.

People buy your products or services because they want to achieve a specific goal. That means that your customer service representatives have to understand your customers and what they want out of their relationship with your company. This is especially true if you want to provide a high-quality customer experience.

Here are a few things that you can do to make sure your customer service team has everything they need to improve retention rates during every support interaction.

• Start with the hiring process: When your support agents are happy and feel supported, they naturally deliver better service, which has a direct impact on customer retention. Start by hiring the right people, then set them up for success with solid onboarding and training so they can really understand and help your customers.

• Implement ongoing training opportunities: Regular training helps your team meet customer needs more effectively, which turns prospects into loyal customers. For example, teaching support agents to transfer calls smoothly without making customers repeat themselves saves time and frustration.

• Track customer support performance with call center analytics: Use AI-powered call center analytics and KPI measurement to help you see how your team is performing across phone, chat, and email. By monitoring metrics like average handle time (AHT), first call resolution (FCR), and customer satisfaction scores (CSAT), you can spot areas where extra training is needed, retain customers, and keep them happy and supported.

2. Create an experience-driven business

When companies invest in transforming the customer experience, they perform better than those who don’t. In fact, companies that lead in customer experience outperform those that don’t by around 80%. 

This is because they show how they value their people, customers, and processes.

How do you become an experience-driven business? Creating emotionally rich experiences for your audience is one of the most effective ways to improve customer retention. 

You can achieve this by expanding your content marketing capabilities, enhancing the customer experience across different channels (more on this soon), and investing in AI-powered technologies that provide in-depth call center analytics and customer retention metrics.

3. Build trust for better customer relationships

The most successful businesses are built on trust. According to Adobe’s Future of Marketing Research, 61% of customers will recommend a brand they trust to friends, and 71% will make repeat purchases if they trust a business.

Here are a few things you can do to foster trust and build better customer relationships:

• Respond to customer feedback: Listening to what your customers like (and don’t like) helps you give them a better experience. But it’s not enough to just collect feedback. You need to follow up on concerns, act on suggestions, and show customers that their voices are heard. When customers feel valued, they’re easier to keep around.

• Connect with customers on social media: Engaging on platforms like Instagram and Facebook helps your customer base feel emotionally connected to your brand. For instance, National Geographic uses Instagram to publish stunning images submitted by photographers across the globe. The Starbucks Facebook page focuses on posting new drinks, desserts, and secret menu items, which keeps the excitement and engagement alive.

• Provide exclusive rewards and discounts: Giving first-time customers a special offer or credit can build trust and encourage them to come back, while targeted discounts can win back lapsed buyers. 

4. Re-engage customers

For many businesses, like B2B service companies, re-engaging customers is a time-consuming and difficult task. But if you’re in retail or eCommerce, it can be as easy as introducing a customer loyalty program or an ambassador strategy, which turns satisfied customers into advocates for your brand.

Not only do these strategies boost customer retention by motivating people to keep purchasing your products or services, but they also drive them to spread the word about your brand. Companies with effective customer loyalty programs have reportedly grown revenues 2.5 times faster than their competitors.

Rewarding loyal customers for sharing your content on social media, for example, can also yield huge returns. 

Also, 76% of customers claim that they trust user-generated content more than content pushed by actual brands. That means that your brand ambassadors not only remain your customers, but they are also important lead drivers. 

You can also re-engage customers by building automated email or SMS win-back campaigns that trigger when someone hasn’t purchased or interacted with your brand for a while. A simple “we miss you” message paired with a personalized offer or helpful content can be enough to bring lapsed customers back into your funnel.

Another effective tactic is to create product education campaigns that include short videos, onboarding guides, or in-app tips that help customers unlock more value from what they’ve already bought. When people understand how to get the most out of your product, they’re far more likely to stick around.

5. Increase customer engagement

Customer engagement is about how your business interacts with its customers across various channels. In practice, increasing customer engagement means creating more meaningful and personalized interactions with your customers. 

It may look like responding faster on social media, sending targeted emails based on customer behavior, offering personalized product recommendations, or checking in proactively when you notice a drop in activity. These actions bring a ton of benefits to your company. 

For one thing, more interactions mean more customer insights. You can use these insights to inform future marketing decisions and fine-tune your sales processes.

Start by tracking which channels your customers use most, then focus your engagement efforts there to make every interaction count and keep them coming back.

6. Iterate on the phone customer service experience

Many businesses believe that phone calls are an outdated form of customer service. But research shows that an estimated 48% of customers still prefer speaking with a real person on the phone whenever they run into issues with a product or service. 

Despite the fact that email and social media platforms are so popular, phone calls are still one of the most personal forms of customer service. 

Clients feel that they have your support agent’s undivided attention when they’re on a phone call. Whereas on live chat, they may feel like the agent is handling three cases at once. 

A phone call also allows your customer support agents to hear the emotion in a person’s voice and form a more genuine connection.

To improve your phone customer service experience, make sure agents are trained to react to customers’ emotions and show empathy, which you can get right with a little emotional intelligence. This humanization of the customer experience is one of the best ways to level up your customer support experience.

7. Reduce wait time by channel

Research shows that customers wait less than one minute before they hang up on a contact center. This is a huge problem, given that a customer spends an average of 90 seconds on hold when calling any support department. This can even be a lot longer in some industries, such as airlines, where the average hold time is three to five minutes.

If callers tend to hang up before they even have a chance to speak with one of your representatives, it can be challenging to meet customer expectations. 

So, to reduce wait times, make sure that your customer service team is large enough to handle your call volume, especially during busy holiday periods or seasonal promotions.

Another effective strategy is collecting the customer’s information so an agent can call them back when they become available. 

8. Create effective hold-time messages

To take the above tip a step further, it’s worth implementing strategies to make wait times more bearable so people don’t get frustrated and hang up. One simple method is to use effective hold-time messages.

Hold-time messages may come in the form of music or pre-recorded advertisements, which are both effective.

Some companies have also started making their hold-time messages more interactive by incorporating trivia and games. Others use a mix of male and female voices to make them more engaging.

Pro-tip: You can also use a call-queuing feature, which tells customers how long they’ll have to wait before speaking with the next available customer service agent. This makes them less likely to hang up, as they can see the progress they’re making toward the front of the line.

9. Provide an omnichannel experience

It’s important to meet your customers wherever they already are. Can they easily reach you with questions or concerns? Are you available on social media, email, chat, or through online forums?

With an omnichannel setup, customers can also switch channels without losing the conversation. For example, if a call drops, they can jump on social media DM or live chat and pick up exactly where they left off. And they can do this without repeating details or starting from scratch.

The key is to provide an omnichannel customer service experience that connects all your platforms. This is important because 90% of customers expect seamless interactions across all channels.

Having an omnichannel approach makes sure customers get a consistent, seamless experience no matter how they contact you. 

Case in point: Ring

Effective customer retention strategies are essential for business growth, and Ring is a great example. 

After being rejected on Shark Tank in 2013, the company focused on keeping customers engaged and happy by sending new users tips for setting up their doorbells and emails to show them how to get the most out of its features.

Simple as it sounds, this approach helped Ring boost U.S. online sales to over 1.4 million units sold per month in 2024, compared to 400,000 units in December 2020.

This company is a clear example that there is great value in focusing on your existing customer base. 

Improve customer retention with Aircall

Improving customer retention is about keeping your customers coming back for more and driving sustainable growth.

Refining your hiring process, nurturing authenticity, offering exclusive rewards, and ensuring omnichannel communication are all effective customer retention strategies. Each one on our list plays a role in building stronger relationships with your customers and keeping them on board for longer.

Here are just some of the ways Aircall helps you elevate customer retention:

• Seamless omnichannel support: Connect with customers via phone, SMS/MMS, and virtual call centers so you can meet them where they are.

• Smart call routing and interactive voice response (IVR): Route customers to the right agent instantly to reduce wait times and save them the frustration of waiting on the line.

• Shared call inbox and warm transfers: Preserve context across hand-offs so customers don’t have to repeat themselves.

• Real-time analytics and live monitoring: Track KPIs like wait time and missed calls to spot issues and improve service in the moment.

• AI-powered features: Benefit from call transcription, AI-generated summaries, key topic recognition, and talk-to-listen ratios to train teams and enhance customer conversations.

• CRM and helpdesk integrations: Keep customer data connected so every interaction is informed and personalized.

Don’t just take our word for it. Cozy Earth uses Aircall to effectively train its customer service agents from the start. And, with the right training, they can do more for their existing customers.

“Aircall makes our training easy because it places everything right in front of our trainees.” — Logan Christensen, Head of Customer Experience, Cozy Earth

If you combine essential retention strategies with Aircall’s capabilities, your business not only retains more customers, but it turns existing customers into brand advocates, repeat buyers, and long-term partners. 

Aircall helps your team turn great service into loyalty. With AI-powered insights, automated follow-ups, and CRM integrations that keep customer data connected, it’s the smarter way to retain more customers. Get started today.

Sources

¹Vena Solutions, “Average Customer Acquisition Cost by Industry: Tracking CAC Benchmarks,” Vena (blog), September 26, 2024, https://www.venasolutions.com/blog/average-cac-by-industry.

²LoyaltyLion, “The Price of New vs Loyal: Customer Retention Costs Explained,” LoyaltyLion (blog), February 22, 2025,https://loyaltylion.com/blog/customer-retention-cost.

Published on June 30, 2021.