How to keep your customers in 2025: 10 retention strategies that actually work

Are you leaving thousands of pounds on the table every day while chasing new customers? You could be, especially if you’ve been neglecting your existing ones.

As the cost of acquiring new customers continues to rise in 2025, retaining loyal customers isn’t just a nice-to-have; it’s a necessity. Not only does it reduce marketing spend, but it’s one of the more effective ways in which a business can achieve sustainable growth. The good news? With the right CRM (customer relationship management) system and strategies under your belt, retaining customers might be easier than you think. 

To help you make the most of your existing treasure trove of customers, we guide you through ten customer retention strategies that actually work. We also show you how to measure your customer retention rate, and note some common pitfalls to avoid, in order to keep your customers and your bottom line happy. 

What is customer retention and why is it important?

Customer retention refers to a business’s ability to keep its existing customers and prevent them from switching over to competitors. 

High retention rates translate to tighter customer relationships, reduced overheads, and higher profits. Alternatively, a poor approach to customer loyalty can result in a higher churn rate, often prompting businesses to spend more on customer acquisition to make up for losses.

Simply put, retaining loyal customers can be a game-changer for businesses – and you don’t just have to take our word for it. Here are some stats which point to the potential of a successful customer retention strategy: 

• It costs five times less to retain an existing customer than to acquire a new one. (Source) 
• Loyal customers are 50% more likely to try new products and spend 31% more than new customers. (Source)
• Up to 86% of loyal customers would recommend their favourite brand to their friends or family. (Source)

Maintaining loyal customers takes more than having a good product or service. Yet, the process can be made a whole lot easier by following the steps in this guide and using a top CRM system to track customer behaviour.

10 proven customer retention strategies

Prioritising existing customers is one of the smartest decisions a business can make. Drum up repeat purchases using these tried-and-tested strategies. 

1. Automate onboarding and follow-ups

Your customer retention effort should start as soon as a customer first makes a point of contact with your brand. 

Whether they sign up for a service or make a purchase, setting up some automated communication triggers will help create a positive experience from the beginning. This could be as simple as using a CRM system to send a customer a personalised welcome email.

Automating follow-ups is another strategy to maintain engagement and address potential issues before customers churn. These could include anything from automated check-in emails to personal recommendations, which can also be managed seamlessly using CRM software.

2. Actively listen to customers

Customer feedback helps businesses identify areas for improvement and build a better relationship with customers. Yet, whether you collect feedback through surveys, online reviews or net promoter scores (NPS), simply hearing the words a customer is saying isn’t enough.

Instead, actively listening by probing for more information, acknowledging possible inconveniences, and most importantly, doing what you can to offer a swift resolution, shows that you’re committed to delivering a positive experience. Not only does this help customers feel seen, but it also makes them much more likely to stay loyal to your brand.

3. Reward loyalty

Rewarding loyalty is an excellent way to show appreciation to your repeat customers, and it’s also one of the most savvy decisions a business can make. 

Whether you choose to award them with discounts, early access to products and services, or other benefits, loyalty schemes give customers a sense of privilege and exclusivity, ultimately helping to strengthen their relationship with your brand.

This gives customers a reason to favour you over competitors, helping to reduce your churn rate and expand your bottom line as a result. Simply put, it’s a no-brainer for businesses interested in hanging onto their most loyal customers. 

4. Use AI to personalise communication

If you’re still sending out comms manually in 2025, you’re missing a trick. AI-powered CRM software and tools like ChatGPT are capable of creating highly personalised messages in a couple of clicks. 

And this goes beyond inserting a customer’s name into a generic template. From personalised email product recommendations to targeted follow-up social media messages, AI can help you personalise a wide range of customer communications, improving the customer’s experience with your brand and driving up loyalty as a result. 

5. Offer 24.7 instant support using intelligent chatbots

Most businesses don’t have the time or resources to man helpdesks 24/7 – but this doesn’t mean your customer service needs to be subpar.

By using intelligent customer support chatbots, businesses can provide customers with immediate support around the clock, whether they need help with tracking an order or navigating your website.

In addition to alleviating pressures from your team, the fast response times and round-the-clock availability of AI chatbots can considerably enhance the customer experience, making it much more likely for buyers to return to your business in the future.

6. Offer subscription services or automatic reorders

Subscription-based businesses like Swoperz and Gousto are gaining traction fast in the UK, and for good reason. 

Offering a product or service on a recurring basis, or allowing for automating refills, can considerably boost convenience for customers. It also creates a strong incentive for them to remain loyal to certain brands, providing businesses with stable and predictable revenue forecasts. 

However, to avoid the customer experience turning sour, we recommend clearly communicating your offering and making it easy for subscribers to quit the service at any time.

7. Use flexible payment and return options

Convenience is the name of the game for customers in 2025. If a customer isn’t able to use their desired payment method or return a product in a way that suits them, chances are they’ll flock to a competitor who can meet their needs.

So, instead of giving potential buyers a chance to look elsewhere, we advise providing them with a wide range of payment options, from Buy Now, Pay Later (BNPL) services to digital wallets, and rolling out flexible return options such as extended return windows and parcel drop-off services at various locations.

8. Build a strong brand

Even with the best product or service in the world, if your brand is weak or lacks clarity, customers have no reason to buy into your business.

Fleshing out your brand with strong company values, a well-thought-out mission statement, and a unique value proposition is a prerequisite for attracting customers who resonate with your business. 

These customers are much more likely to be loyal and speak about your brand positively with friends and family, making them indispensable to the longevity and growth of your business. 

9. Build a community

Fostering a customer community gives your buyers a space to connect with each other and rally around your brand. A strong sense of community can also help to reduce churn, as loyal customers are much less likely to ditch a brand they feel connected to.  

If you’re building a community around your brand for the first time, we recommend defining your brand values and target audience first. Then, choose a platform to host your community that reflects these values, whether it be a dedicated online forum or a social media group.

10. Gamification

Customer retention doesn’t need to be boring. Incorporating interactive, game-like elements into your user journey makes interactions with your brand more fun and engaging. 

The positive reinforcement these games create also fosters a sense of accomplishment, making customers more likely to make repeat visits and stay loyal to your brand.

From handing out virtual badges when customers carry out specific actions to ranking them on online leaderboards, there are loads of ways to have fun with your customer retention strategy. Just make sure the gamified elements align with your brand identity, and the interests of your customer base. 

Biggest retention mistakes to avoid

Even with the best intentions, businesses can drive away loyal customers by making some simple mistakes. 

To avoid being used as an example of how not to keep hold of customers, here are some of the most common customer retention pitfalls and, more importantly, suggestions on how to steer clear of them.

1. You’re ignoring customer feedback

Customer feedback acts as a direct line to the customer’s needs, desires, and expectations. So, ignoring input doesn’t just result in customers feeling undervalued and unheard, but it also creates a missed opportunity for businesses to improve their products, services, or customer support system.

How to avoid this pitfall: You can use a CRM system to gather, track, and analyse customer feedback. Then, take concrete actions based on this feedback, and communicate changes to customers to show them that their input matters.

2. Your communication is inconsistent

Inconsistent communication can confuse customers and make it challenging for them to understand your brand and offerings. It can also damage trust between your business and your customers, and lower the chances of them making repeat purchases. Fortunately, you don’t need to be a comms expert to overcome this roadblock. 

How to avoid this pitfall: Develop a clear and consistent communication strategy that encompasses all customer touchpoints, including emails, social media, and customer support interactions, and use automation tools and CRM systems to maintain regular and personalised communication.

For help finding a CRM system, try our specialised free comparison tool for quotes.

3. Your customer service is poor

It only takes one negative customer service experience for a once-loyal customer to turn their back on your business. Customers can quickly share their negative experiences online, too, triggering a ripple effect which could potentially damage your brand’s reputation.

How to avoid this pitfall: Invest in comprehensive training for your customer service team to ensure they can handle a range of customer inquiries and problems effectively.

In a broader sense, we also recommend fostering a customer-centric culture within your organisation, where every employee understands the importance of excellent customer service.

4. You aren’t personalising your communication

If you haven’t moved beyond generic, ‘one-size-fits-all’ messaging, chances are your customers just feel like another number. Personalising your marketing efforts makes customers feel valued and appreciated, which in turn strengthens their relationship with your brand. 

How to avoid this pitfall: First of all, collect data from various sources including CRM systems, purchase history, and email interactions. Then, divide your customer base into smaller groups based on shared demographics, and send targeted campaigns to specific customer segments, whether you opt for email marketing, SMS marketing, or targeted ads. 

We also advise customising greetings with the customer’s name. It’s a simple touch, but it’s been shown to significantly boost open and click-through rates and revenue as a result.

5. You’re over-promising and under-delivering 

Selling your customers the world may help you land that initial sale. But once a customer feels misled, and their trust in your brand is broken, you can guarantee they won’t be coming back to make a repeat purchase. 

Negative experiences spread fast, too, whether it be through online reviews, social media, or word of mouth. So, over-promising and under-delivering may also make it harder to secure new customers, in addition to losing loyal ones. 

How to avoid this pitfall: Focus on setting realistic expectations for your customers to avoid any potential disappointment. Then, aim to consistently deliver more than you promised, whether it be by going the extra mile with postage and packaging or surprising buyers with a little freebie.

How to measure customer retention

In order to measure your success with your new customer retention strategy, you’ll need to know how to calculate your existing rate first.

A customer retention rate is a crucial metric that measures the percentage of customers a business successfully retains within a specific period, typically compared to the number of customers it had at the beginning of that period. 

The formula to calculate your customer retention rate is as follows:

Customer retention rate formula = (Number of Customers at the End of a Period – Number of New Customers Acquired During the Period) / Divide by Number of Customers at the Start of the Period x100.

Here’s a real-life example of how the formula works, using a cafe in Bristol called “Lush Bean”.

At the start of January, the Lush Bean had 80 loyal customers who came in regularly. During January, they welcomed 20 brand new customers. Counting their existing regulars, a total of 90 customers were still coming back by the end of January. 

Here’s how the Lush Bean would apply the customer retention rate formula, step-by-step:

1. Calculate the number of customers by the end of January: 90
2. Calculate the number of new customers acquired during January: 20
3. Subtract the new customers from the final number: 90 – 20 = 70
4. Calculate the number of customers at the beginning of January: 80
5. Divide the number of loyal customers by the starting number: 70 / 80 = 0.875
6. Multiply by 100 for the percentage: 0.875 x 100 = 87.5%

So, using this formula, the Lush Bean is able to work out that its customer retention rate for January was 87.5%.

In addition to this formula, there are a few other key metrics that will help you understand the full picture of your customer retention overall, including:

• Customer churn rate
• Customer lifetime value (CLV)
• Net promoter score (NPS)
• Conversion rates

Not a fan of lengthy equations? Fortunately, lots of CRM systems are capable of calculating your customer retention rate for you, saving you the time and effort associated with doing it manually. 

Start building loyalty in 2025

Perfecting your loyalty strategy doesn’t need to be an uphill battle, and trust us, it’s a whole lot easier than acquiring new customers from scratch. 

By understanding your target audience and shaping your retention strategy around their specific needs and demographics, you’ll be in a better position to encourage repeat purchases. 

But don’t wait until tomorrow. Every day you delay taking action, you risk losing loyal customers who could be pouring consistent revenue into your business. 

Still unsure about what customer retention strategies would be best for your business? Learn how to identify and meet your customer needs accurately in our comprehensive guide.