Customer retention

Customer retention measures the proportion of customers who continue to purchase from a seller. This is an important measure for many sellers, since it is much less expensive to retain existing customers than to attract new ones. Further, a low customer retention rate implies the existence of low-quality customer service or a poor product line that is driving away customers. The concept is especially important when a business is selling high-priced products several times over the life of the customer, which may result in a massive lifetime sales opportunity – if customers can be retained.