Customer retention
Customer retention keeps existing customer relationships over a relevant period. It can reflect service, value, convenience, trust or switching barriers, so retention is not identical to satisfaction. Measures need a defined cohort, activity criterion and period. New customers should be distinguished from the original cohort when assessing how many existing relationships were retained.
Worked example
Of 100 customers active at the start, 85 meet the stated retained-customer criterion at the end. Cohort retention is 85%; twenty new customers acquired during the period are not added to that numerator.
Common mistake
Do not infer satisfaction solely from continued purchasing or make a retention percentage meaningless by mixing different cohorts and periods.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |