Definition: Customer Retention

What is customer retention?

Customer retention is a company's endeavour to persuade existing customers to make repeat purchases and to maintain active, loyal relationships over a longer period of time. Rather than constantly seeking new customers, customer retention focuses on creating long-term value through positive experiences.

Organisations actively solicit qualitative and quantitative feedback from customers through multiple channels to gain a holistic understanding of the overall experiences over time, allowing them to analyse renewal rates that show whether existing customers recognise the value and loyalty of the offerings in remaining engaged as well as customer churn to honestly examine potential issues that could cause some long-time customers to leave.

These insights from regular feedback, repeat business metrics, and churn analysis provide organisations with an understanding of emerging needs or areas for improvement to thoughtfully adjust strategies and operations as required to continually enhance the customer experience and offering as industry and consumer trends evolve.