Commerce Glossary

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What is Customer Retention?

cus - tom - er re - ten - tion
noun
Is the process through which a company or business works to engage with existing customers to persuade continued purchases of products and services from them. Customer retention starts with the first contact the company has with its customers, and extends throughout the whole lifecycle of the customer’s relationship with the company. The goal of customer retention is to help businesses retain as many customers as possible to increase brand loyalty. Customer retention is the key to a successful business, so improving it is very important in the long run. Going the extra mile for your customers will build stronger relationships with them and increase the long-term loyalty by understanding and fulfilling their needs. Implementing your customer service team to prevent issues before they occur, and setting customer expectations to ensure you deliver your services or products will increase customer’s trust, satisfaction, and lifecycle with the brand. Personalization is one of the most popular trends in eCommerce. Customers want to be approached individually, with solutions based specifically on their needs. Reminding customers of what they have achieved and setting milestones in their use of your products strengthens customer relationships, encourages them to keep learning, and paves the way for success stories.
How Does Customer Retention Work?

Customer retention is an effective strategy to grow an eCommerce business, as retaining buyers is more cost-effective than customer acquisition. Retention plays a pivotal role in every software and online services companies' growth. It directly impacts customer lifetime value (CLTV) and is a key barometer of the health of your subscriber base.

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