Final answer:
Customer retention is the process that businesses use to reduce customer defections by implementing strategies such as loyalty programs or improved customer service. It helps maintain a stable customer base and is more cost-effective than acquiring new customers.
Step-by-step explanation:
The action a selling organization undertakes to reduce customer defections is also known as retention. Retention efforts are crucial for a business as they help maintain a stable customer base and contribute to sustainable revenue streams. Companies implement various strategies under the umbrella of customer retention, such as improving product quality, offering excellent customer service, implementing loyalty programs, and engaging in regular communication with customers. Effective retention strategies can significantly reduce the costs associated with acquiring new customers while leveraging the value of existing customer relationships.