A store calculates how many of last year’s buyers returned to purchase again this year. That measure reflects customer retention. Keeping existing customers is usually cheaper than acquiring new ones.

Retention programs include loyalty rewards, personalized offers, excellent service, and consistent product quality. Follow-up after purchase, easy returns, and recognition of frequent buyers all reinforce the relationship. Churn occurs when customers stop buying; analyzing why they leave helps prevent further loss.

High retention stabilizes revenue and creates advocates who recommend the retailer to others. It also provides a base of known buyers who can be invited to new products or locations. Retailers that track cohort behavior over time can see whether their retention efforts are actually working.

• Ability to keep customers buying repeatedly
• Generally more cost-effective than acquisition
• Supported by loyalty programs and service quality
• Measured through repeat purchase rates