Here's why it's worth your time. Harvard Business Review says winning a new customer can cost 5 to 25 times more than keeping one you already have. The exact number depends on the study and the kind of business. Your own math matters more. Say 200 people bought from you last year and a typical order is $60. If 20 of them come back just once more, that's $1,200 in sales with no ad bill.
Build the program in this order. Each step makes the next one easier.
Step 1: Make your list
You can't bring people back if you don't know who they are. Open a spreadsheet and give each customer one row with these columns:
- Name
- Email or phone number
- Date of first purchase
- Date of last purchase
- Number of purchases
- Total spent
- OK to send marketing? (yes or no)
If you're on Shopify, most of this already exists. Go to Analytics, then Reports. Click the Category filter and choose Customers. The One-time customers and Returning customers reports show each person's email, order dates, money spent and whether they agreed to marketing.
If you run on bookings or invoices, pull the names from your calendar, your invoices or your card reader. A pile of receipts is messy, but it still counts. Start with your last 50 customers and stop there for now.
If you've never collected contact details, start with your next sale. Ask: "Can I send you a reminder when you're due?" That's an easier yes than "Join our newsletter."
Now sort the sheet by total spent. The top 10 people each get a personal note from you this month, whatever else you do.
Step 2: Pick one number
You need one number that tells you if this is working. Call it your come-back rate.
Choose one month, at least six months ago. Count everyone who bought from you for the first time that month. Then count how many of them have bought again since.
Say 40 people first bought from you in March, and 10 have come back. That's 10 out of 40, or 25%. Write it at the top of your sheet. Each month, do the same for the next month's group. Your job is to make that number go up.
On Shopify, a report called Customer cohort analysis does this for you. It's in the same Customers list.
If people pay you every month, the question is simpler. Of the clients who were paying you three months ago, how many are paying you today?
You can skip the scores and dashboards big companies use. They're built for teams with a person paid to read them, and you have a business to run.
Step 3: Find your come-back time
This is the step that makes everything else easy, because it tells you when to get in touch.
Take 20 customers who came back. For each one, count the days between their first purchase and their second. Put those numbers in order and take the one in the middle. That's your come-back time.
If it's 40 days, you now have a calendar. Someone who's been gone 30 days is nearly due. Someone who's been gone 80 days, twice your come-back time, has probably started to drift.
What "coming back" means depends on what you sell:
| Your business | Coming back means | When to watch closely |
|---|---|---|
| Online or local shop | A second order | Between the first order and the second |
| Salon, clinic or home service | The next booking | When they leave without one on the calendar |
| Coach or consultant | A new package | As the current package runs out |
| Course creator | Finishing this course, then buying the next | When they stop logging in |
| Agency | A renewal or a new project | In the quiet months before renewal |
| Software or membership | Still paying next month | In the first few weeks, if they never got set up |
Start with the second purchase. Early on, put your effort into turning first-time buyers into repeat customers, and worry about your 20-time regulars later.
Some businesses rarely see the same customer twice. Nobody hires a roofer every spring. If that's you, a win is a customer who sends a friend or leaves a review. Aim the whole program at that.
Step 4: Ask the people who left
Before you send a single offer, find out why people stopped coming. Otherwise you could spend months fixing the wrong thing.
Some people leave even when you did nothing wrong. The software company SAP surveyed about 10,000 shoppers, and 28 out of every 100 said they had switched brands just because they got bored.
So ask. Pick 20 people from your list who haven't been back in twice your come-back time. Send each one a short note from you, in your own name:
Hi Maria, it's Sam from Bright Cuts. I noticed we haven't seen you since March. I'm not selling anything. Can I ask what made you stop coming? Even "I moved" would help.
A phone call is even better, if that's normal in your line of work. Then sort the answers:
| They say | What to do |
|---|---|
| Something went wrong | Say sorry and put it right. Then fix the cause. This comes before everything else. |
| I forgot about you | Good news. The reminder in Step 5 fixes this. |
| It cost too much | Ask if they got enough out of it. A smaller option may help more than a lower price. |
| I found someone else | Ask what the other business does better. Then decide if you want to match it. |
| I got bored | Give them something new to come back for, and tell them about it. |
| I moved, or I don't need it now | Nothing to fix. Thank them and ask if they know anyone who could use you. |
If the same answer turns up three times, fix that first. Then write back to the people who told you: "You said the wait was too long, so we added a second chair." It costs nothing, and it may be the cheapest loyalty program you'll ever run.
Step 5: Write your five messages
These five messages are the heart of your retention marketing. That just means marketing to people who've already bought from you. Each message goes out at a set moment, so you're never left wondering what to send this week. Change the words until they sound like you.
1. The thank-you: within a day of buying
Send it from a person, and don't include an offer. Give them an easy way to tell you if something's wrong, because a problem you hear about is one you can fix.
Thanks for coming in, Maria. If anything about your color isn't quite right, just reply and I'll fix it.
If you ship orders, a handwritten note in the box does the same job.
2. The helper: once they've had time to use it
This one catches problems before they turn into goodbyes. Send one useful tip and ask one question.
Your grinder should have arrived last week. Here's a tip: start on setting 4 and go finer if the coffee tastes weak. How's it going so far?
If you sell software or courses, this is the most important message of the five. Ask: "Did you get set up? What's stuck?"
3. The reminder: a few days before their come-back time
Be specific, and make it easy to say yes with one reply.
Maria, it's been six weeks since your last cut. I have Thursday at 4 or Saturday at 10. Want either one?
A shop can say: "That bag of dog food should last about another week. Want me to send another?"
4. The check-in: at about twice their come-back time
They've gone quiet. Don't sell yet. Just open the door.
We haven't seen you in a while, Maria. Is everything OK? If we got something wrong, I'd really like to know. If you've just been busy, you can book here whenever you're ready.
5. The last try: a few weeks after that
This is the only message with an offer in it. That way, your regulars don't learn to wait for discounts.
Maria, I'd love to have you back. Come in this month and I'll take 15% off. Either way, this is my last nudge.
Then keep your word. Stop the reminders for that person.
Sending them
With a small list, do this by hand and set reminders in your calendar. It takes minutes, and it reads like a real person because it is one. When copying and pasting starts eating more than an hour a week, set the same messages up in your email tool.
A quick word on the rules, since nobody enjoys finding out later. In the US, marketing emails must follow the CAN-SPAM rules, even a single one you send to a former customer. You need an honest subject line, a clear sign that it's an ad, your postal address and an easy way to opt out. Marketing texts need a written yes from the customer first. That's what the yes or no column in your sheet is for. Other countries have their own rules, so check yours.
Step 6: Add a reward, if it fits
A reward comes last. It can give someone a reason to pick you over the shop next door. But it can't build customer loyalty on its own. It won't make up for a late delivery or a rude phone call.
The right reward depends on how often people buy:
| How often they buy | What fits | Example |
|---|---|---|
| Every week or month | A stamp card | Tenth car wash free |
| Every few months | Store credit | $5 off after your third order |
| Once or twice a year | Early access | First pick of summer slots |
| On a monthly fee | A thank-you for staying | A free extra session at one year |
| Hardly ever | A referral reward | $50 off for you and your friend |
Three rules will save you from an expensive mistake:
- Explain it in one sentence. If you can't say it at the register, it's too complicated. Nobody wants to need a chart to buy a coffee.
- Work out the cost first. Treat the reward like an ad. If the tenth wash is free, your real price is 10% lower for those customers. Make sure you can live with that.
- Give people a head start. Hand out a ten-stamp card with two stamps already on it. A goal feels closer once you've begun.
Also check who gets your best deal. If first-time buyers get 20% off and loyal customers get nothing, your oldest customer is paying more than a stranger from Instagram. Sooner or later, they'll notice.
Step 7: Protect your 30 minutes
A retention program only works if it keeps running, and it will be the first thing to go when you're busy. So put it in your calendar. If you have a team, give it to one named person.
Every Monday, 30 minutes:
- Sort your sheet by date of last purchase.
- Send the reminder to anyone nearly due.
- Send the check-in to anyone at twice their come-back time.
- Read the replies. Write down every reason someone gives for leaving.
- Send one personal note to someone in your top 10.
Once a month: update your come-back rate. Don't judge a new month's group too early. Give it at least one full come-back time first.
You don't have to chase everybody. Someone who only buys at your lowest price, or who costs you more in refunds than they spend, can drift away with your blessing.
Once people are coming back, you can start asking what else they need. Good upselling techniques feel like helpful advice, so save them for customers who are already happy.
The easiest customer to keep
People are easiest to keep when they bought the right thing the first time. Someone with the wrong size, the wrong package or the wrong plan is halfway out the door before your thank-you arrives.
That's where our own product fits, so take this with a pinch of salt. Possible is an AI that asks each visitor the right question at the right moment, remembers the answers and guides them to a sale, sign-up or booking. Here's more on our AI sales assistant for online stores. It's free to start. It won't write your thank-you notes or do your Monday half hour, so the steps above are still yours.
Your first 30 days
- Day 1: Start your list with your last 50 customers. Ask every new customer if you can send a reminder.
- Day 2: Work out your come-back rate and your come-back time.
- Day 3: Send the "what made you stop coming?" note to 20 people.
- Week 2: Read the answers and fix the one that comes up most.
- Week 3: Write your five messages. Send the thank-you and the reminder first.
- Week 4: Add the check-in and the last try. Send personal notes to your top 10.
- After that: Do your Monday half hour. Think about a reward once the messages are running.
Questions about customer retention programs
What is a customer retention program?
It's a repeating plan for keeping the customers you already have. It tracks who bought and when, contacts them at the right moments and fixes the reasons they leave. It can include rewards, but it doesn't have to.
What's the difference between a retention program and a loyalty program?
A loyalty program is one possible part of a retention program. It rewards people for buying again. A retention program also covers service, reminders, asking why people left and winning them back.
What are the best customer retention strategies?
Fix whatever is making people leave. Then stay in touch at the right moments, make it easy to buy again and thank people who stay. Rewards and referrals come after that. The best strategy for you is the one that fixes the reason your own customers give.
What are the three Rs of customer retention?
They're retention, related sales and referrals. In plain words, keep the customers you have, sell them more of what they need and ask them to tell their friends.
What are the 8 Cs of customer retention?
They're consistency, convenience, communication, customer-centricity (putting the customer first), confidence, competence (being good at what you do), community and care. It's a handy checklist for service teams. If you're small, start with convenience and communication: make it easy to come back, and remind people to.
What are some examples of customer loyalty programs?
A coffee shop's stamp card, points you can spend on your next order and store credit after every purchase are all common. So are early access for regulars and a reward for sending a friend. It can be as small as a diner sending its regulars a monthly free coffee.
How do you calculate customer retention rate?
Take the customers you had at the end of a month or year and subtract the new ones you gained. Divide that by the customers you had at the start, then multiply by 100. If you started with 100, ended with 110 and 30 were new, that's 80 divided by 100, or 80%. So 80 of your original 100 stayed. This works best when people pay you regularly. If customers buy now and then, use the come-back rate from Step 2.
What is a good customer retention rate?
The best target is to beat your own number from last year. Rates vary too much between types of business to compare. Customer service company Zendesk says subscription businesses usually keep 75 to 90 out of every 100 customers. Shops run lower, because nobody signs a contract to buy socks.
Do I need software to run a customer retention program?
Not at first. A spreadsheet and a calendar will carry you through your first few hundred customers. Buy a tool when doing it by hand takes more than an hour a week, and you'll already know which messages are worth automating.
How long does a retention program take to work?
Fixing a common complaint can help right away. To see it in your come-back rate, you have to wait at least one full come-back time. If people return every six weeks, you'll see a change in about two months. If they return once a year, judge it on replies and bookings while you wait.