Let’s talk a little about customer retention definition. We’ve talked about related issues in the past, such as reducing churn rates and the lifetime value of customers but, what exactly differentiates customer retention from these topics. Is it more important as a result of its differentiation, and what are some things that can be done to ensure it in the long run?
When talking about customer retention definition, let’s first point out that it includes issues like churn rates and lifetime values, but those are more specifically applied to unique industries, where customer retention is a global, industry-independent topic and issue in and of itself.
By definition, customer retention is the maintaining of repeated, continued customers, not just a customer base. Individual customers, in customer retention, continue to patronize a company’s product or service for long periods of time. This is the most challenging thing to ensure in business, as gaining new customers is fairly dependable with proper marketing and appeal to the right demographics.
So, why is this such a challenge, compared to customer acquisition? Well, customer acquisition, as said a moment ago, is all about piquing the curiosity of people. That plus novelty will ensure a customer base gain for a length of time if not long term. But, when novelty wears off or economic pressure causes people to cut corners in their lives, customer retention becomes a bit more difficult.
There are many ways in which customer retention can be helped, though never guaranteed. First and foremost, price points and incentives are important and interrelated. Good prices are going to ensure that customers do not lose interest in a product or service due to financial requirements, at least not as easily at any rate.
Incentives will encourage them to be long term customers due to knowing they will be rewarded for such. (Credit card companies and airlines have used incentivizing for eons to great success, recall).
Customer service is also key to customer retention, as poor customer service and resolution will quickly turn customers off. Issues are inevitable, but when they happen, and they are a pain to resolve, customers will see a company as hassle and not worth the trouble in the future.
Keeping up with technology and relatability is important too, as companies seen as “old and stuffy” or behind the times in relevance will lose customers who try to maintain a contemporary attitude especially in times that change as fast as the ones we live in today.
Customer retention is tricky, and there are a ton of things one can do to be proactive about it, but when it comes to losses in a company, these tend to be the source of it. Gains of new customers will not hold much weight if there is no retention of customers who are already acquired. Customer retention definition is in fact what separates a long-term viable company, product or service from one that is but a passing fad. This involves a little more sociology and psychology alongside basic business science, as you can now so obviously see.