The retention rate in products and marketing development describes the percentage of buyers who continue to pay for a product or service over a specific period of time.
A business may have a brief increase in sales and revenue if it launches major promotional, advertising, and sales initiatives to accompany the launch of its new product or service. Retention rate is one of the best indicators of how successfully a product offers value and addresses issues for its target audiences in the long term.
A business risks losing recurring consumers if it doesn’t prioritize client retention. It can show how well your business is performing and areas where customer service could be enhanced. Since existing customers already know you and trust you, they don’t require significant marketing or advertising to keep doing business with you, which leads to substantial customer retention and generate enormous revenues.
Since it demonstrates the user’s level of involvement, interest, and commitment, it is a crucial indicator for businesses. Customers who frequently use your application have a high retention rate, which suggests that your company has a low churn rate or the proportion of users that delete or stop using the app.
The criteria for defining a good retention rate vary depending on the factors that are most important to your organization as every company and industry is unique.