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Customer Retention

What Is Customer Retention?

An indicator that shows how many of your clients are happy enough to keep buying from you.

Why Is Customer Retention Important?

Customer satisfaction and retention are key to a business’s long-term success. Here’s why:

  • It’s cheaper to keep current clients happy than to go out and find new ones;
  • Those who stick around buy more and more often;
  • Happy users tell friends about you, which helps spread the word;
  • Keeping people content over time shows that you are committed to high standards.

What Are The Types Of Customer Retention?

Users retention is done:

  • Actively — staying in touch with users and adding special perks or incentives to make sure they’re satisfied.
  • Passively — making sure you are so good that clients stick around without you having to do much extra.

How To Measure Customer Retention?

The customer retention rate formula is:

((CE-CN)/CS)) x 100


CE = how many clients you have at the end of the analyzed period
CN = how many clients you have acquired
CS = your client base at the beginning

How To Increase Customer Retention Rate?

eCommerce-oriented tactics to increase CR:

  • Recommend products based on customer’s purchase history and browsing behavior;
  • Simplify the checkout process to reduce cart abandonment;
  • Provide free and fast shipping options;
  • Implement a loyalty program;
  • Send targeted and personalized email marketing campaigns;
  • Provide excellent support;
  • Offer competitive pricing and promotions;
  • Use retargeting ads.

How Can Product Data Help Increase Customer Retention?

  • Helps to identify the hot items and categories retained customers keep coming back for;
  • Enables implementing personalization in product recommendations and promotions;
  • Identifies product issues or defects for quick resolution;
  • Allows optimizing product descriptions and images to increase engagement;
  • Supports data-driven decision-making for inventory management and pricing strategies.

Retention Rate FAQ

What is a good customer retention rate?

When setting KPI customer retention has to comply with, remember СR rate really depends on the industry and the competition, so it’s hard to give a one-size-fits-all answer. Generally speaking, if you’re keeping more than 60% of your users coming back for more, you’re doing something right.

What are tools for improving customer retention?

For starters, you might try offering loyalty programs or personalized communication to make them feel extra special. Customer retention examples, for keeping everyone engaged, may include staying in touch via email or social media with regular updates and interesting content. But before you do any of that, you’ve got to have a way of measuring customer retention, so you know what’s working and what’s not. Because as they say, you can’t improve what you can’t count!

Why is customer retention essential?

When it comes to growing a company, there are two main ways to do it: bring in new clients with fancy marketing and advertising campaigns, or focus on keeping the existing users happy, so they keep coming back for more. That’s where CR comes in, and it’s a lot more cost- and time-effective than constantly chasing new buyers. Plus, when you build a loyal base, they tend to buy more from you and tell their friends how awesome you are. And you know what that means – more revenue and profitability for you!

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