Retention Rate

Retention rate means the percentage of customers or users who continue using a product or service over time. In simple terms, retention rate shows how well a company keeps its customers. Retention rate is important because strong retention can support recurring revenue, lower customer acquisition costs, and long-term growth. Investors often value companies more highly when customers stay longer. For example, if 90 out of 100 customers remain after one year, the retention rate is 90%. Retention rate is not the same as customer growth. Retention focuses on keeping existing customers, while customer growth includes adding new customers.