31 Jul, 2023

TOP-5 Retention Rate Killers: What to Avoid in Web and App Development?

Did you know that it is up to 7 times cheaper to retain existing customers than acquire new ones? Sounds amazing, doesn’t it? However, most businesses focus on generating new leads rather than preventing loyal clients from brand switching. We’d like to highlight that both these processes are critical. Raising customer retention rate (CRR) lets you improve loyalty, reduce churn rate and increase cases of word-of-mouth marketing. So, what is CRR, and how to increase the retention rate? Learn in this article.

What Is CRR and How to Measure It?

First of all, let’s define what this term means. The retention rate is the percentage of loyal customers that stay with your company for a given period. It is one of the key metrics in many businesses that shows the company’s health. The higher the retention rate, the better brand’s performance is. It affects profits directly, as increasing CRR by 5% raises profits by 25%-95%.

How to determine the retention rate? There is a simple way to calculate the company’s ability to build long-term relations with consumers. The main elements of the CRR formula are:

  • Clients at the start — S
  • Clients acquired during the measurable period — N
  • End clients — E

CRR = ((E-N)/S) x 100%

Let’s look at the example of the customer retention rate formula in use. Say, you have an email marketing company. You had 20 clients (S) and, after launching an advertising campaign, acquired 30 more ones (N). At the end of the period, some of them canceled the subscription, and now you have 35 end customers (E). So, the CRR = ((35-30)/20) x 100% = 25%.


Most businesses calculate the customer retention rate regularly for a definite period. If your company is developing gradually, you can do this once a month or once a quarter. However, if you have a startup or fast-growing business, we recommend calculating CRR every week or even more often. 

Paying special attention to customer retention management is vital, as it affects your business’s long-term success. Moreover, there is often room for improvement. In the next section, we provide an average CRR for different industries, so that you can compare your performance with competitors and conclude on your future actions.

Average Customer Retention Rate By Industry: What Is Ideal CRR For Your Niche?

The customer retention rate greatly depends on the sphere in which you operate. Also, it is influenced by your company’s product line width, quality, and service. Here we’ll focus on the average customer retention rate by industry.

According to research by Zippia, the average CRR across all niches is about 75.5% in 2022. The highest retention rates have media and professional services — 84% each. The lowest CRR indicated in this report is in the hospitality, travel, and restaurant industries — 55%, while retail has a 63% retention rate.


What is a good customer retention rate? Below we provide the average CRR within different industries based on the information from Survey Sparrow dated 2021.

  • Insurance 84%
  • Retail 63%
  • Banking 75%
  • SaaS 35%
  • Hospitality 55%
  • Media 25%
  • Fintech 37%
  • Edtech 4%

To give you a clear picture of the market situation, we provide additional statistics from another research. The following data is taken from a ThinkImpact study published in 2022.


Average Customer Retention (%)
Media  84
Professional Services 84
Automotive and Transportation 83
Insurance 83
IT Services 81
Construction and Engineering  80
Financial Services 78
Telecommunications 78
Healthcare 77
IT and Software 77
Banking  75
Consumer Services 67
Manufacturing 67
Retail 63
Hospitality, Restaurants, Travel 55
Average 75.46

Now you know customer retention statistics and can estimate the success of your company in the market. Let’s further discover what influences customer experience negatively and how to fix this.

Customer Retention Rate Killers

Every year, businesses have millions of lost customers because they fail to provide a good experience. It sounds dissatisfying, but a well-defined retention strategy can help you earn dozens of money and skyrocket your company. Below, we provide the most widespread mistakes you should avoid.

  • Slow Page Loading

You may lose a huge percentage of visitors if your website loads slowly. Moreover, existing clients will also be irritated by the time they need to wait and, consequently, will decide to switch the company sooner or later. Be attentive to the loading speed while developing a website and optimizing it once you discover a problem. 

Some tips can help you fix the issue. Firstly, enable caching so that your browser won’t need to download all resources, as some of them are already stored in cash. Secondly, optimize the size of your images because if they are oversized, it will negatively influence the page loading. Thirdly, remove unnecessary plugins. When there are too many of them on your website, it gets slower and can discourage both current customers and new ones.

  • Too Many Ads

Remember that the experience you provide is the most important thing that affects user retention rate directly. Spam can frustrate even the most loyal clients and make them switch your brand to another one. Of course, you can place some ads on your website or application, but there are a few tips you need to consider. 

Firstly, there shouldn’t be too many promotions. It is the situation when less is better. Secondly, all ads you place should appeal to the target audience. It makes no sense to promote fast food delivery in the workout app. So, meeting customer preferences is the key to success. Finally, constantly trying to sell your products also influences CRR negatively. Don’t bother consumers with endless emails, SMS, and web push offering your products. Such messages can be in your advertising strategy, but avoid overusing them. 

  • Uncomfortable Interface

Many people leave online purchases due to the too complex interface. Moreover, if your existing customers struggle every time they want to buy something, sooner or later, they will decide to switch the company. On the other hand, a well-defined design can motivate visitors to buy something and push them to additional purchases.

To make your interface both stylish and compelling, you need to consider a range of factors. Pictures and videos, written content, typography, navigation, branding, and negative space are among the things you should pay attention to. The layout is also critical. If you want to make your website easy to read, you should place all the elements in a certain order. 

It may seem difficult to craft an up-to-date and attractive design that aligns with your company’s values and motivates people to stay longer on every page. However, we know the solution. Hiring a team of skillful experts is always the best decision, especially as LITSLINK provides a wide range of web development and app development solutions. Raise your web and mobile app user retention easily and without overspending.


  • Permanent Asking For Feedback

Customer feedback helps companies grow and become better. Although, when you bother clients too often, it will irritate them. Think about how you will use their feedback and place questionnaires and forms in your website map evenly. There are some tips on how to improve the retention rate by using consumers’ insights most effectively. 

Firstly, identify the approximate period between customer feedback surveys. It should be long enough so that the situation can change. Secondly, choose the format through which you will gain consumers’ reviews without annoying people across various channels. It can be emails or forms to fill out on your website, for instance. Finally, react to users’ feedback. It may sound obvious, but many brands forget about it. Show your actions to improve the company, and, as a result, people will want to stay with you longer.

  • No Announced Content

It is the last, but not the least. If you promise people to write about something or add a video of a certain feature – keep your promises. This will help you increase loyalty and build a strong reputation. Here are some insights on how to make your content appealing and persuasive.

The main point you should know is that everything you post should deliver something new to consumers. The content may be funny, helpful, supportive, or visually attractive. But it should resonate with people’s feelings and emotions. Also, it is essential to provide content that covers the needs and pains of your target audience. It will raise average customer retention rates, as they will get something really useful.

Now you know the worst mistakes that can harm your CRR. Continue reading to discover tips for customer retention that will help your company grow and develop on the market.

How To Improve Customer Retention?

Whether you want to raise your CRR and reach the average results in your industry or desire to retain more consumers to become even more successful, there are always development opportunities. Here we provide effective ways to improve retention and give tips on how to implement them in your workflows successfully.

  • Craft a smooth onboarding process

It especially concerns businesses that offer services by subscription. The initial education is vital to turn new clients into regular ones. In such a way, you can highlight all the features of your product, help users figure out the opportunities they have, and provide the best possible experience so that people stay loyal to your company and don’t switch it.

  • Create customer loyalty programs

When it comes to retention, rewarding regular clients is one of the best decisions. Offer bonuses and gifts to loyal clients, and provide discounts and special offers to give them a feeling that you appreciate them. We recommend deciding in advance on how your customer retention solution will work. You can calculate the number of orders or reward clients after a definite period they stay with you.


  • Build trust-based relations with consumers 

Reliability and mutual respect are critical when people make decisions about a purchase. To turn new clients into regular ones, you should always give only realistic promises. Meet customer expectations and even exceed them to provide excellent experiences and retain consumers. Be consistent and reliable so that people will perceive you as a trustworthy brand.

  • Offer unique solutions

Think about how you can stand out in the market. If you can satisfy clients’ needs in a way anyone else can’t, you will have a strong advantage. Research your buyers’ problems to solve them effectively, and they will return to you again and again. To improve CRR and generate new leads, we recommend emphasizing the competitive edges of your products and developing new solutions that can make the lives of your audience easier.

Use these insights to have a good retention rate and skyrocket your business on the market. Read the next section to learn some tips on how to bring your CRR to life if it dropped. 

Is It Possible To Revive Good Metrics After A Fall?

Do you know what distinguishes successful companies from the ones that broke up? Ability to overcome challenges. Different things can happen in the market, but if you want to keep going, do everything to fix the situation. Reviving a good CRR is also possible. Discover some tips on how to fix a situation after a failure. 

  • Analyze previous mistakes

Bad service, ill-conceived strategy, unrealistic promises, and negative experiences are among the main reasons for a bad CRR. Make use of the industry retention rates to understand the situation better. Then, identify customers that are likely to switch the company and use their feedback for improvement. Analyze churn rates at every touchpoint of the customer journey and find out leaks in the pipeline that you need to fix immediately. 

  • Focus on the needs of your target audience 

However, error correction is often not enough to regain consumers’ trust. In this case, a total rebranding is necessary. First of all, you should focus on your buyer personas’ pains and preferences. Look for new ways to satisfy them and bring value. Align your efforts with people’s requirements to offer the best solutions in the market. 

  • Identify brand values and how you will transmit them

Revise the basic points your company stands on. Do you share the values with the target audience? Do you convey them clearly? Do you do enough to mirror customer beliefs? There are some questions you need to answer before rebranding and optimizing the user retention rate. We recommend crafting a document where you write down business values and how to transmit them through your products and marketing.


  • Think about new branding 

Once you do the previous steps, you will be ready to build a new positioning and reach a good retention rate. Change the messaging of the products and show more clearly what problems they solve. You can use storytelling to engage people and highlight the changes in your company. Also, it may be necessary to develop a new style, visual language, tone of voice, and naming. Apply the results of the previous analysis to identify the touchpoints that need improvement.

  • Fix problems with client service

If you struggle with improving retention rates, poor experiences may be the main reason. Build a client-centric culture to give people a strong reason to stay with your brand. Explain to your employees that improving customer loyalty is their main goal. Such an approach should appeal to everything connected with your company: from an intuitive website interface to polite and positive managers.

Wrapping Up

Take advantage of the tips for customer retention you have discovered and raise CRR significantly. Remember that there are always ways to optimize the performance, so this metric needs constant attention and improvement. This will help you boost your company on the market and raise profits significantly.

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