Glossary

Retention Rate

By
Jademi Jude
00
Minutes read
June 27, 2025

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Retention Rate Definition

Retention rate tracks the percentage of users or customers who continue to use a product, service, or app after a specific period. High retention rates indicate strong customer loyalty and satisfaction, making it a key performance metric.

How Retention Rate Works

  • Total customers at the start of a period are recorded.

  • Customers retained by the end of the period are counted.

  • Retention rate = (Retained customers ÷ Starting customers) × 100%.

  • It’s monitored regularly to assess brand or product stickiness.

Example of Retention Rate

A mobile gaming app tracks how many users return to play within 30 days of installation to gauge retention.

Why Retention Rate Matters in Advertising

  • Indicates customer satisfaction and brand loyalty

  • Reduces acquisition costs by maximizing existing users

  • Supports long-term business growth and profitability

  • Essential for sustainable, high-performing marketing strategies

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