Description: The retention rate is a key indicator in business management that measures the percentage of customers who continue to do business with a company over a specific period. This indicator is fundamental for assessing customer loyalty and the effectiveness of retention strategies implemented by the organization. A high retention rate suggests that customers are satisfied with the products or services offered, which can translate into increased long-term revenue. Conversely, a low retention rate may indicate issues with service quality, competition, or a lack of perceived value by the customer. The retention rate is calculated by dividing the number of customers who remain with the company at the end of a given period by the number of customers at the beginning of that same period, multiplied by 100 to obtain a percentage. This indicator helps companies understand their customer base and is crucial for strategic planning, as retaining an existing customer is often more cost-effective than acquiring a new one. In an increasingly competitive business environment, the retention rate has become a focal point for companies seeking to maximize their profitability and long-term sustainability.
