Customer retention is a company’s ability to turn first-time customers into repeat buyers and prevent them from switching to a competitor. It indicates the quality of a product or service and the degree of customer loyalty. Retention is best achieved by overcoming barriers to switching, maximizing the value of products and services, meeting customer expectations, and enriching the customer experience.
Customer retention helps facilitate the growth and stabilization of your customer base and company revenue. By increasing their customer retention rate (CRR), companies can increase profits by over 90%.  By consistently delivering value, companies fulfill their brand promises which elevate credibility, trust and brand sentiment.
Here are the four major benefits of customer retention:
The best customer retention strategy includes initiatives and processes designed to build lifetime value (LTV) of products and services to secure customer loyalty. It helps structure the fulfillment of brand promises through the consistent delivery of value.
An effective retention strategy can include the following seven features:
A sound customer retention strategy is bolstered by metrics that reflect the percentage of retained customers as well as current and future revenue. Here are the 3 most important and widely utilized metrics:
Customer experience (CX) and customer relationship management (CRM) systems are significant components of the customer retention process.
A CRM system unites multiple functions (e.g. project management, contact management, digital marketing) into a single data-driven platform. A “unified” CRM system automates communications and streamlines internal processes to enhance the overall CX. It may include “hyperpersonalization” features (e.g. targeted content, offers, alerts) that silo customer engagement within a specific context.
Overall, a unified CRM provides procedural consistency and reliable data that help increase customer retention and company revenue. 
A chatbot is an artificial intelligence-powered computer program that uses natural language processing (NLP) to decipher customer inquiries and provide automated responses. This stimulates informational exchange, which hyperpersonalizes the online CX while collecting user data. AI chatbots also suggest or prompt customer actions that lead them to their desired resources. These processes help customers achieve their site visitation and purchasing goals, and build brand reliability, trust and loyalty, which increases CRR.
The need for a personalized CX experience is growing exponentially in 2021, which has significantly increased the demand for AI-powered chatbot services. As a result, the retention-driven global chatbot market is expected to surge from USD 461 millions to USD 1.4 billion by 2026. 
Net Dollar Retention (NDR) is a churn metric that calculates the percentage of recurring revenue retained from existing customers over a period of time. Since NDR considers multiple factors (e.g. downgrades, cancellations, pause requests) that impact recurring revenue, it is the best indicator of customer retention success (versus Monthly Recurring Revenue (MRR) and Annual Run Rate (ARR)).
These five best practices are designed to drive NDR rates toward customer retention success. 
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 Forrester. Customer Recommendations Have Only A Small Business Impact For Big Brands (link resides outside IBM) November 18th, 2020
 IBM. What is Customer Care? June 10, 2021
 The Balance. What Is Customer Retention? (link resides outside IBM) April 6, 2021
 Forrester. The Five CRM Trends In 2021 That Will Shape Engagement, Relationships, And Revenue (link reside outside IBM) January 22, 2021
 Technology and Services Industry Association (TSIA). Best Practices for Driving Net Dollar Retention (NDR) through Customer Success (link resides outside IBM) May 27, 2021