Customer Retention

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.

Usage

While “customer retention” clearly conveys its meaning, there is a lack of specificity to the term when used without context that can make it feel like jargon. Knowing how many customers your brand is holding onto is important for nearly every business, but because brands think about retention in a variety of ways across different verticals and brands, customer retention rates can sometimes seem like they’re whatever marketers want them to be. To keep customer retention from seeming like a meaningless buzzword when you use it, make sure to clearly convey how your brand is defining retention and why those definitions make sense for your business.