Retention rate

This article is about the measure of customers or participants retained. For the financial measure of profits reinvested in a corporation, see retention ratio.

Retention rate is a statistical measurement of the proportion of people that remain involved with a group from one time period to another.

The concept is used in many contexts, including marketing, investment, education, employee management, research, and clinical trials. The exact definition depends on the context. As a general rule, high retention corresponds to a positive outcome.

In marketing, retention rate count customers and their activity irrespective transactions they make.[1]

"Retention rate is the ratio of the number of retained customers to the number at risk". In contractual situations, it makes sense to talk about the number of customers currently under contract and the percentage retained when the contract period runs out." This term should not be confused with growth (decline) in customer counts; retention refers only to existing customers in contractual situations. "In non-contractual situations (such as catalog sales), it makes less sense to talk about the current number of customers, but instead to count the number of customers of a specified recency."

In a survey of nearly 200 senior marketing managers, 63 percent responded that they found the "retention rate" metric very useful.[2]

  1. ^ Search Engine Spot (29 October 2020). "CTR – Customer Lifetime Value". searchenginespot.com. Retrieved 2021-01-20.
  2. ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0137058292. Content from this book used in this article has been licensed under Creative Commons Attribution Share Alike 3.0 and Gnu Free Documentation License and be modified and reused. The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in Marketing Metrics as part of its ongoing Common Language in Marketing Project.