What is 'customer retention'?

Customer retention refers to the strategies and actions that businesses implement to maintain and enhance relationships with their existing customers. This encompasses a variety of practices designed to keep customers engaged, satisfied, and loyal to a brand over time. The goal is to encourage repeat purchases and create a sense of loyalty, ultimately leading to higher customer lifetime value and profitability for the business.

Effective customer retention strategies often include personalized communication, loyalty programs, exceptional customer service, and consistent engagement through various channels. By focusing on retaining customers, businesses can minimize churn and cultivate a dedicated customer base that advocates for the brand, further driving their growth.

In contrast, attracting new customers often involves different strategies, and although customer service improvement can play a role in retention, it is just one aspect of a broader retention strategy. Temporary sales boosts may also address immediate revenue needs but do not contribute to long-term customer loyalty.