Retention Rate

Retention rate measures the percentage of customers who continue using a product or service over a specified period. It's calculated as (Customers at End of Period ÷ Customers at Start of Period) × 100. High retention rates indicate customer satisfaction and product-market fit, while low rates signal issues with value proposition or user experience. Retention analysis segments customers by cohort to identify patterns and predict churn. Improvement strategies include personalized communication, loyalty programs, and continuous value delivery. Retention rate is often more cost-effective than acquisition, with loyal customers providing higher lifetime value and organic referrals.