Customer Retention
According to a study by Reichheld and Schefter [2000], it takes two to three years to recoup the cost of acquiring new customers. E-commerce businesses must identify profitable types of customers, attract them, and then retain them. Simply attracting visitors, counting clicks, and analyzing the most popular products is not enough.
Personalization and ease-of-use features make customers' lives easier, and communities and transparency build loyalty and trust. These are not quick fixes; they take major commitments on both the business and IT sides of an organization. As Baveja [2000] noted, “e-retailers must treat customers as assets, not transactions.”
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