Customer retention refers to the ability of a business to retain its customers, usually over a specific period of time. High customer retention is when the customers of a business remain loyal to the brand or product.
Customer retention could be induced via a myriad of sources - an attractive price point, a competitive edge over other products in the market, promotions and discounts, loyalty rewards, or simply by lieu of business prowess. There are four stages of retention policy commonly followed by retailers and other business owners. They are as follows:
- Research - It is very important to start with conducting research on the target demographic(s) to identify key characteristics and behavior, in addition to pain points and customer needs.
- Development - Research is followed by development. This could include specific products, digital touchpoints or in-store infrastructure, and promotional offers.
- Evaluation - The evaluatory process following development refers to a general assessment of how the retention strategy can be strengthened, and whether additional components such as a rewards program or loyalty promo codes will drive the growth of repeat customers.
- Personalization - Embedding a personal touch into retail retention strategy to ensure that brand recognition is boosted.
To conclude, customer retention revolves around meaningful relationship building with existing and potential customers, and being able to convey complex value propositions via simple messages and awareness journeys.