What is Customer Retention?
The ability of a business to keep existing customers coming back over time.
Customer retention measures your success at keeping customers over time, expressed as a retention rate (percentage of customers who return within a defined period). High retention means customers keep coming back; low retention means you're constantly replacing lost customers with new ones. Retention is driven by consistent quality, relationship building, and proactive issue resolution.
Why Customer Retention Matters for Local Businesses
Increasing retention by just 5% can increase profits by 25-95% (Harvard Business Review). Retained customers spend more per visit, refer friends, and leave reviews. For local businesses, retention is the foundation of sustainable growth — acquisition fills the top of the funnel, but retention determines whether that investment pays off.
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