A customer retention rate tells you what percentage of customers purchase a product from you more than once. This metric is especially important for sellers in categories which lend themselves to repeat purchases.
In simple terms, if your customer retention rate is 50%, it means that half of the people that bought your product once will return to buy it again.
When compared to customer acquisition cost, this metric can be used to determine whether you're spending too much to acquire new customers and not enough to keep existing customers.
Not sure what your current retention rate is?
Use the figure from order one in your category as a guideline.
We've got a bunch of useful articles about Customer Retention, Cohort Analysis, and the power of understanding your Customer Lifetime Value on Amazon. Check it out!