The Definition of Customer Retention and Its Role in Business Marketing


Jul 2, 2020 • 3 min read


As a business that is engaged with customers, your business needs to have one most effective marketing strategy. That strategy is customer retention and it is time to do it seriously. Customer retention is not only intended to maintain customers in the long term that they will purchase your product more often. The more important thing is to maintain the loyal customers rather than look for new customers.

Customer retention is quite the opposite of customer acquisition where you make serious efforts on gaining new customers. It takes more than acquisition to grow your business stably. And without the ability to create engagement with customers and retain them, sooner or later your business will suffer a setback.

Therefore, customer retention is very important. If you want to know the important things in your business and why they become important, you can make a difference that will have a big effect on your business.

Nevertheless, it is important to remember that customer retention does not happen in one night. That is why many people are not so sure about the results of retention strategy. In fact, it takes a long time to see the results, 6 months at the very least.

Why Applying Customer Retention?

According to study results on Harvard Business Review, increasing customer retention rate of 5% can increase profit of 25% to 95%. Well, it is quite a significant change and something to think about.

Customer retention usually needs less marketing cost than acquisition strategy. Besides, customers that are successfully maintained will be happy to recommend your products to other people. Not only that, those customers usually have higher lifetime value than customers from conventional channels.

It is important to remember that the main purpose of customer retention is to increase profit. But there are also other benefits that you can get from customer retention, such as customer satisfaction, loyalty, and brand perception.

So, if you are wondering why customer retention is important, then the answer is because retention is the form of infestation that you do that involves your customers where it can increase your profit. Which business that doesn’t want those benefits?

Applying Customer Retention Strategy to Achieve Goals

After you understand about the definition of retention, now is the time to think of ways to make it happen. Basically, there are three methods that you can use, strategies, tactics, and tools. Those three approaches are the simple way to realize effective retention.

  • Retention strategies

Retention strategies are the plans to achieve all goals of maintaining customers. For instance like increasing customer experience and optimizing referral marketing.

  • Retention tactics

Retention tactics are the action to realize the purpose of retaining customers. For example, you can do customer follow up two weeks after the last time they purchase your products.

  • Retention tools

Retention tools are systems that you use to run the function of customer retention. Using a live chat feature to communicate with your customers in a loyalty program is one way to do that.

Through the application of the right customer retention strategy, you can achieve company goals and retain more of your current customers. Combining retention tactics and tools are also helpful in your business marketing strategy  so that you can achieve the success that you want.

Tada can help you realize the tools of customer retention through customer retention programs that are proven by many clients. The simple and easy system surface, your brand and your customers will experience the fun of loyalty programs.

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Clara Alverina

I'm marketing enthusiastic and inherently understands that the customer is the single most valuable asset an organization can have, and driven by the unrelenting pursuit of customer-retention focus, engagement and customer experience.