Glossary
Customer Retention
Customer retention is how well a business keeps its existing customers coming back or staying subscribed over time.
Formula
Retention rate = (customers at end of period − new customers) ÷ customers at start × 100
Example
A gym starts the month with 300 members, gains 30 and ends with 312. Retention = (312 − 30) ÷ 300 = 94%.
How to read it
Small retention gains compound. Keeping a few more customers each month adds up to a large amount over a year.
Why it matters
Keeping a customer usually costs far less than finding a new one, and every extra month they stay adds to their lifetime value.
Common mistakes
- Only noticing a customer is slipping when they cancel.
- Treating every lapsed customer the same.
- Spending everything on new customers and nothing on keeping them.
How to improve Customer retention
- Watch attendance or visit gaps, not just cancellations.
- Check in personally when a customer starts slipping.
- Remind customers when they're due for their next visit.
- Run win-back messages for customers who have lapsed.
Related: AI fleet for retention
Related terms
Churn RateChurn rate is the percentage of customers or members who leave in a given period.Win-Back CampaignA win-back campaign is a series of messages aimed at customers who have stopped buying or visiting, to bring them back.Customer Lifetime Value (LTV)Customer lifetime value, or LTV, is the total revenue you can expect from one customer over the whole time they stay with you.