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ShopifyDefinition
Customer retention is the share of a starting group of customers who are still buying from the store at the end of a set period. It measures whether the business keeps the buyers it already paid to win, which is the other half of the growth picture.
Customer retention = customers from the starting group still active at the end / all customers in the starting groupExample with made-up numbers: Made-up scenario: 2,000 customers were active at the start of the quarter. At the end of the quarter, 1,850 of them still count as active under the same rule, because 150 were lost. Customer retention = 1,850 / 2,000 = 92.5 percent.
How to use it
Retention is the other side of churn, under the same rules. If the store counts a customer as lost after 180 days without an order, retention is the share of the starting group that is still active under that rule. Use the same starting group, the same period and the same definition each time, or the trend will mean nothing.
Retention matters most when acquisition costs are high, because each kept customer helps repay the money already spent to win them. Track it by acquisition channel and by first product, but keep the store-wide number as the headline. A channel with strong first orders and weak retention needs a different plan from one with weak first orders.
