Customer Retention Rate

Definition of Customer Retention Rate

The percentage of customers who continue to do business with a company over a specific period.

Explanation of Customer Retention Rate

Customer retention rate is a metric that measures the percentage of customers who continue to do business with a company over a specific period. It is an important indicator of customer loyalty and satisfaction. A high retention rate signifies that customers are happy with the product or service and are likely to make repeat purchases. To calculate the retention rate, businesses track the number of customers at the start and end of a period, subtracting any new customers acquired during that time. Improving customer retention rate involves strategies such as providing excellent customer service, offering loyalty programs, and continuously enhancing products and services. A high retention rate is crucial for long-term business success and profitability.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.