Understanding the Customer Retention Model

And at last, we come to the final customer retention model discussion in this series except possibly a look at software if I wind up deciding there’s enough worth saying there (there’s no dedicated software in that field). But, this is actually important, so I’m not going to complain.

What is a Customer Retention Model:

You can define this in a couple ways, but they’re pretty cut and clean choices. The overarching model of business philosophy, for defining this, is a focus on primary revenue being from retained “loyal” customers. With this being the focal source of revenue, all strategies and plans everywhere within the business are geared to this sort of goal.

This is not the most common definition, because in fact most businesses follow this model logically, so it needs called out far less often.

The other definition is the set of tactics you apply in order to garner loyalty in customers. That’s what we’re going to talk about today. And we’re going to learn this in the hands-on way, by formulating a simple and low-risk model of this in the new century. This will be fun.

B2B and B2C:

We’re not going to worry about which, because while it’s usually easier in B2B … the distinction is moot here mostly.

Service VS Consumables:

Again, services offer you more ground to launch off of with this, and fails harder when it doesn’t work out, but the distinction is moot in this context.

Constant Presence:

I’ve said recently that humans are very much “out of sight, out of mind”. It’s why, as avid readers of web journalism might have noticed, topics get repeated over time, with or without news to share about them. It is done because there is such an overload of everything in this global civilization, that without repetition, everything gets buried and forgotten.

Such is also the case in business. You must market casually on a regular basis. This is not need creation marketing (though a hint of that is always a good idea), this is staying in the spotlight. Customers who like you will remember “hey I like these guys”, and use you when needed.

Loyalty is Rewarded:

This isn’t just about incentives, it’s about actually showing customers that you acknowledge their integral nature in you mattering at all, and in showing gratitude for their patronage.

It’s the most expensive thing to do, rewarding or giving discounts or the like, and it’s the oldest. And it works. Let’s be reasonable, but use this.

Web Presence:

Okay, and here is our low energy high yield tool, unique to these and future times. We have the internet, and a social metaculture over which to interact and to perceive one another. Social networks, content marketing blogs, and other such things are very helpful. I’m not going to go into extreme depths with this, because the benefits of this are pretty obvious.

Now, we have a functional, solid and modern model, and I think in the process of designing this, we’ve come to appreciate the importance of customer retention. If not, then you probably shouldn’t be in business to begin with really, because this is like, the driving principal.


Matthew is the Lead Author & Editor of CXperience Blog. Matthew established the CXperience blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Customer Experience.