Customer retention

Customer retention is the act of creating customer loyalty that results in repeat purchases. It quantifies your brand’s level of brand loyalty, the act of customers favoring your brand above other brands with similar offerings. It’s also a fantastic way to build customer loyalty, the relationship between your brand and your customers.

Customer retention means that your customers are dedicated to your brand’s offerings, and it can contribute to your expansion: Rather than having a continuous churn of new customers, repeat customers speaks to their satisfaction with your brand.

It’s also a crucial step in the customer experience found near the end of the customer journey map, loosely following customer acquisition, the process of bringing your brand to new customers. For more established brands, cultivating customer retention and loyal customers may be even more important than attracting new customers.

Customer retention is important because it can be greatly influenced by customer satisfaction. Additionally, it reduces the amount of effort needed to continually reach new customers, which can improve your advertising efficiency and be an important part of your economic strategy.

A good customer retention strategy ensures that your customers are accurately educated about your brand and products, satisfied with their purchases and their customer experience, and encouraged to return to your brand for additional products or updates.

Customer retention is improved by reaching more returning customers, and there are many different ways you can do so. You should ensure your marketing strategy includes tools for converting new customers into repeat customers, by offering discounts on multiple purchases or prompting a sign-up for a newsletter with updates, for example.

Another important way to retain customers is to encourage customer engagement, which is the interaction of customers with brands via online shopping, social media, connected TV, and more. You can also retain customers through remarketing efforts. Remarketing refers to engaging audiences who have already interacted with your brand, to encourage them to take a desired action that may interest them, such as conversion.

The primary metrics for customer retention are customer retention rate, which includes new customers and existing customers, and customer retention cost. Other metrics related to reaching audiences to consider are purchase quantity purchase frequency, and lifetime value.

How you build your customer retention strategy will vary based on your overall goals, of course. However, there are three areas you should consider to help strengthen your strategy.