Customer Retention

\ˈkəs-tə-mər\ \ri-ˈten(t)-shən\

Customer retention rates measure how many customers a company holds onto over a given period of time.

Definition

Customer retention is a metric that refers to the number of customers that continue to engage with a brand following their first interaction. Retention is usually measured over a period of time—for instance, how many new customers in a given cohort or group continued to engage two months later?—and can be expressed in raw numbers (your brand retained 300 customers for one year) or percentages (your brand had a six-month customer retention rate of 20%). Customer retention is an especially significant concern on mobile, due to the high cost of acquiring each new customer and the low retention rates seen by most apps, leading many brands to use personalized outreach and other tools to boost their retention rates.

“The whole marketing team started getting nervous when our three-month customer retention rate dropped below 25%.”