Customer retention definition
Customer retention refers to the process of retaining existing customers and encouraging them to continue doing business with a company. The objective is to build long-term relationships with customers, providing them with excellent service, and offering them incentives to remain loyal to the brand.
Why you should care about customer retention
It is strategic for businesses because it is more cost-effective to retain existing customers than to acquire new ones (with a ratio of one to five in terms of costs). Repeat customers tend to spend more and are more likely to refer new customers to the business. By prioritizing customer retention, businesses can strengthen their customer relationships, increase customer loyalty, and ultimately drive long-term growth and profitability.
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