What is customer retention?

Last updated 31 Oct 20261 min read

TL;DR

How many of your customers come back — usually measured as the repeat customer rate.

A regular who comes in three times a week is worth more than any marketing campaign. Customer retention measures how many customers come back, and the most practical way to measure it is the repeat customer rate.

The formula

Repeat customer rate = customers who ordered more than once ÷ all customers in the period × 100

A worked example

In a month, 600 customers you can identify ordered from you. 210 of them ordered more than once.

210 ÷ 600 = 35%.

Why it matters

Returning customers cost nothing to find again.
They tend to spend more over time, and they bring friends.
A falling repeat rate is an early warning — about quality, service or a competitor — before sales start to drop.

You can only measure who you know

Retention needs to recognise a customer when they come back. That means a loyalty account, an email on a QR-code order, or a phone number on a booking. Anonymous card and cash sales cannot be counted.

How to improve it

Give people a reason to be recognised — a loyalty reward, a receipt by email.
Follow up: a thank-you, a birthday offer, news of a new menu — only to people who agreed to hear from you.
Watch which first orders turn into second ones; that is your best product.

Common mistakes

Counting visits, not customers. Ten visits from one regular is one customer.
Too short a window. A monthly repeat rate suits a café; a clothing shop needs a longer one.
Messaging people who did not consent. It costs trust and breaks the rules.

Tracking it in DUMA

The Customer retention report shows new and returning customers and the repeat rate. Loyalty, customer records and marketing consent live in the same place, so you can follow up with the people who agreed to hear from you.

Questions and answers

What is a good repeat customer rate?

It depends heavily on what you sell and how often people need it. A neighbourhood café can see far higher repeat rates than a gift shop. Track your own trend.

Is retention the same as loyalty?

Retention is the measurement — did they come back. Loyalty programmes are one way to improve it.

How can I measure retention without a loyalty scheme?

Any way of recognising a returning customer works: an email on online orders, a phone number on bookings. Without one, retention cannot be measured.