Definition
Customer retention is a business's ability to keep customers using and paying for its product over time, and the practices that improve it. It's measured with retention rate and, for usage, with cohort retention.
Why it matters
Keeping a customer usually costs less than winning a new one, and long-lasting customers raise lifetime value. Small improvements in retention compound.
What drives it
- Reaching value quickly after signing up.
- A repeated habit around the core action.
- More people in the account using the product.
- Fast help when something goes wrong.
See SaaS customer retention for how to measure and improve it.