Customer retention
Customer retention is a business's ability to keep the customers it already has. It is usually measured as the share of customers still buying after a set period, and for a local business it often matters more than winning new ones.
What customer retention is
The retention rate compares customers at the end of a period with those at the start, leaving out new ones gained in between. Start March with 500 regulars, end it with 425 of them still visiting, and retention is 85%. Keeping a regular usually costs less than finding a new one, which is why loyalty cards, reminders and good service all aim at this number. Businesses on Rewardly see 30% more repeat visits on average.
How it works for a café, salon or restaurant
- A café notices when a daily regular stops coming and gets in touch after a week.
- A salon reminds clients once their usual time since the last appointment has passed.
- A restaurant keeps guests returning with a birthday message and a dish of the month.
What to watch
Retention hides behind total sales: revenue can grow while regulars quietly leave and new visitors replace them. Track it per period and look at who left, not only how many. A small drop among your best customers costs more than a large drop among occasional ones.
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