What is Customer Retention?
Definition and Meaning
What is customer retention? It’s a marketing term that describes a company’s ability to keep customers. Specifically, the term can refer to the various marketing strategies companies will use in an attempt to retain their buyers.
Companies will generally be focused on capitalizing on both customer loyalty and brand loyalty in pursuit of returning customers. They’ll also want to eliminate any customer defections, as this has a negative effect on revenue and sales.
Why is Customer Retention Important?
Businesses love returning customers, and for very good reason. These consistent buyers don’t only provide companies with the ability to track and plan for impending sales. Rather, companies won’t have to dish out as much money to “acquire” these customers (via strategies like promotions or giveaways). Instead, these businesses can trust that these buyers will continue to return, meaning they can better focus their efforts on acquiring new customers.
Furthermore, positive customer retention is an indication that consumers are happy with your services and/or products. In that case, there’s a good chance these individuals will refer their family and friends to your business.
How Does a Company Improve Customer Retention?
Now that we’ve answered the question of “what is customer retention,” it’s time to focus on how you can improve your individual rates. Since returning customers tend to spend more than their counterparts, it’s important that your business is doing everything in its power to improve and maintain customer retention.
For starters, you should be offering your customers high-quality products, as they’ll surely side with a competitor if they’re unhappy with their order. You’ll also want to deliver competitive pricing, especially when you consider how motivated many consumers are by money. A strong customer service team can go a long way in helping to improve your customer retention. You can strategically handle any complaints, and this will help to offset any qualms individuals may have with the company.
Finally, providing customers with an easy, stress-free buying experience is key. Assuming you’re operating in the e-commerce world, you’ll want your website to be intuitive and visually appealing. Make it easy for customers to get from ‘Point A’ to ‘Point B,’ and assure that they’re constantly provided with opportunities to complete their purchase.
What is Customer Retention, and Is It Important for My Spreadshop?
Of course! Customer retention is important for any business, regardless of the size. We understand the difficulties of getting customers to your Shop, and it’s ever harder to make a sale. If you’re focused on customer retention, you can rest easy knowing that you have a handful of buyers who will regularly make purchases.
While your efforts (and the money you devote to these efforts) will surely depend on the size of your business, it’s always worthwhile to improve your customer retention rates.
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