Definition of Customer Retention
The ability of a company to retain its customers over a period of time.
Explanation of Customer Retention
Customer retention refers to the strategies and actions a business takes to keep existing customers engaged and loyal. High customer retention rates indicate that a company is successful in maintaining strong relationships and providing value over time. Retaining customers is often more cost-effective than acquiring new ones, as loyal customers tend to make repeat purchases and generate positive word-of-mouth. Effective retention strategies include providing excellent customer service, offering loyalty programs, personalizing communication, and consistently meeting or exceeding customer expectations. By focusing on retention, businesses can increase customer lifetime value (CLV), improve profitability, and achieve sustainable growth.