Retention rate is a measure of how well a company, organization, or service is able to retain its customers or members over a given period of time. It is typically expressed as a percentage and can be calculated by dividing the number of customers or members who remain with the company, organization, or service at the end of a certain period by the total number of customers or members it had at the beginning of that period. For example, if a company starts with 100 customers and ends with 80 customers after one year, its retention rate would be 80%.
Retention rate is an important metric for businesses and organizations, as it can provide valuable insights into customer satisfaction and loyalty. A high retention rate indicates that customers are happy with the company’s products or services and are likely to continue using them in the future. A low retention rate, on the other hand, may indicate that customers are dissatisfied with the company and are likely to switch to a competitor. Companies can use retention rate data to identify areas for improvement in order to increase customer satisfaction and reduce churn.
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