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What is customer retention?

Customer retention is the collection of activities a business uses to increase the number of repeat customers and to increase the profitability of each existing customer.
Customer retention strategies enable you to both provide and extract more value from your existing customer base. You want to ensure the customers you worked so hard to acquire stay with you, have a great customer experience, and continue to get value from your products.
In short, acquisition creates a foundation of customers while your retention strategy is how you build customer relationships and maximize revenue for each one. But how much time and resources should you devote to your retention program? The answer to that depends on your store.

When to focus on customer retention

Whether you should focus more on customer acquisition or retention is heavily influenced by where your store is in its lifecycle. A store that started yesterday is vastly different than one that’s been up and running for many years.
Take a look at the timeline below for general guidance on your store’s potential investment levels.
1. Just starting: When you’ve just started your store there is one thing you should be focused on: getting customers. At this point your acquisition efforts should completely trump retention. Focus on strategies and tactics that will help you grow your customer base.
2. Gaining traction: You now have customers and you are getting sporadic sales. At this stage you can begin to introduce retention elements to encourage each customer to buy more. My recommendation would be to start with retention email campaigns that focus on encouraging a past customer to purchase from you again.
3. Consistent: You aren’t quite an ecommerce juggernaut, but sales are growing. This is the point where you should begin to think about mixing in more retention with your acquisition efforts. You can look at starting a referral and/or a loyalty program as well as getting more serious with marketing automation.
4. Established: You are now an established ecommerce store. A common problem for retailers of this size is finding ways to continue to grow. Acquisition may be leading to a lot of one time purchases, but a retention strategy can get customers to buy more often which increases their lifetime value. At this stage, you should be serious and deliberate about your retention efforts.
5. Well-established: At this stage your store has made it past the initial gauntlet. You’ve achieved many early successes and you have a lot of processes and automations in place. Now is the time to focus heavily on retention.
SkillIndiaMart Strategies to boost customer retention

• Use customer accounts
• Improve your customer service
• Start a customer loyalty program
• Send engaging emails to customers
• Offer a discount or credit to return

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