What is customer retention?

Customer retention refers to the strategies and actions taken by a business to keep its existing customers engaged, satisfied, and loyal to the brand over time. This concept is crucial in retailing because it is often more cost-effective to retain a current customer than to attract a new one. By focusing on customer retention, businesses can build strong relationships, foster brand loyalty, and encourage repeat purchases. This can involve various tactics, such as personalized communication, excellent customer service, loyalty programs, and consistently meeting or exceeding customer expectations.

In contrast, attracting new customers is a different approach that emphasizes acquiring new clients rather than maintaining relationships with existing ones. The total number of visits to a store doesn't directly measure the effectiveness of retaining those customers or their satisfaction levels. Similarly, selling to other businesses relates to business-to-business (B2B) transactions, which is a different focus compared to customer retention in a retail context.