Glossary · CRM & retentionTOFU

Retention rate

The short answer

Retention rate is the percentage of customers who continue buying from you, or using your product, over a given period. For subscriptions, it's the share still subscribed. For eCommerce, it's often expressed as repeat purchase rate — the share of customers who buy again within a window.

Retention is where profit lives for most businesses: the second order is usually far cheaper to win than the first.

Measure by cohort

Group customers by the month they first bought and track what share return in month two, three, six and twelve. Cohort curves show whether retention is improving — something a single blended rate hides.

Levers

  • Post-purchase experience — delivery, packaging, onboarding
  • Lifecycle messaging — email, WhatsApp, SMS
  • Replenishment reminders timed to real usage
  • Loyalty and referral programmes
  • Product quality — the biggest lever of all

In practice

For D2C brands, the most revealing number is often the 90-day repeat purchase rate by acquisition channel. Customers acquired through discounts or broad cold audiences frequently repeat at lower rates than those who came through search or referrals — which should change how acquisition budgets are split.

Cohort retention example

Acquisition monthCustomersRepeat by day 9090-day retention
June1,00022022%
July1,20030025%
August1,50040527%

Rising cohort retention suggests onboarding, product and CRM improvements are working. See CRM marketing.

Retention in practice

Of 1,000 customers acquired in January, 300 buy again within six months: six-month repeat rate is 30%.

How to improve retention

  • Post-purchase journeys
  • Loyalty programmes
  • Great service
  • Personalised offers

Retention in India

Indian D2C and app businesses often see steep early drop-off; post-purchase journeys on WhatsApp and timely reminders help retain customers.

Frequently asked questions

What's a good retention rate?

It depends heavily on category and purchase frequency. Compare cohorts over time.

Is retention rate the same as repeat purchase rate?

They're closely related. Repeat purchase rate is the eCommerce version — the share of customers who buy again within a defined window.

What affects retention most?

Product quality, delivery experience, onboarding, communication and value for money.

How is retention different from churn?

Retention measures who stays; churn measures who leaves. They are complementary. See churn rate.

How is retention measured for subscriptions?

As the share of subscribers who remain active over a period.

What's a good repeat purchase rate?

It varies by category and purchase frequency; compare cohorts over time.

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