What is Retention Rate?

Retention rate is the percentage of customers or users who continue to engage with a product or service over a specified period. It measures customer loyalty and satisfaction, indicating how well a business retains its existing customers or users rather than losing them to competitors.

For example, if a company starts with 100 customers at the beginning of the month and retains 80 by the end, the retention rate is 80%. A high retention rate suggests that customers find value in the product or service and are more likely to make repeat purchases. Monitoring retention rate is crucial for businesses to identify areas for improvement in customer experience and to develop strategies for keeping customers engaged long-term.