Customer Retention Rate: How to Measure & Improve Retention for Long-Term Growth

Customer retention rate is one of the most critical metrics for ecommerce success. It measures the percentage of customers who continue to buy from your brand over time, helping businesses understand customer loyalty, repeat purchase behavior, and long-term profitability. At Sticky Digital, we specialize in retention marketing strategies that help brands increase their customer retention rate through email marketing, SMS campaigns, loyalty programs, and subscription optimization.

What is Customer Retention Rate?

Customer retention rate (CRR) is the percentage of customers a business retains over a given period. A high retention rate means that customers are loyal, engaged, and returning for repeat purchases, while a low retention rate indicates potential issues like poor customer experience or lack of engagement.

How to Calculate Customer Retention Rate

The formula for customer retention rate is:

📌 CRR = ((E - N) / S) × 100

Where:

• E = Total customers at the end of a period
• N = New customers acquired during the period
• S = Total customers at the start of the period

For example, if a Shopify store starts with 1,000 customers, gains 300 new customers, and ends with 1,100 customers, the retention rate would be:

📌 CRR = ((1,100 - 300) / 1,000) × 100 = 80%

Why Customer Retention Rate Matters

• Higher Profitability – Retaining existing customers is 5X cheaper than acquiring new ones.
• Increased Customer Lifetime Value (CLV) – Loyal customers spend more and purchase more frequently.
• Stronger Brand Loyalty – High retention leads to word-of-mouth marketing and organic growth.

How to Improve Customer Retention Rate

1. Optimize Email & SMS Marketing for Retention

Using Klaviyo, Attentive, and Postscript, we create:
✔ Automated post-purchase emails to increase engagement.
✔ Winback SMS campaigns to re-engage lapsed customers.
✔ Personalized email flows to strengthen brand relationships.

2. Implement a Loyalty & Rewards Program

Programs like Smile.io, LoyaltyLion, and Yotpo Loyalty boost retention by:
✔ Encouraging repeat purchases with points & rewards.
✔ Offering VIP tiers for high-value customers.
✔ Running exclusive offers to enhance brand loyalty.

3. Reduce Churn with Subscription Optimization

For Shopify subscription brands using Recharge, Stay Ai, and Skio, we:
✔ Optimize cancellation flows to retain subscribers.
✔ Offer pause or skip options to reduce churn.
✔ Personalize subscription discounts & rewards to increase LTV.

4. Enhance Customer Experience & Personalization

✔ Use AI-driven product recommendations to keep customers engaged.
✔ Improve post-purchase experience with follow-up emails & SMS.
✔ Create customer feedback loops to refine retention strategies.

Boost Your Customer Retention Rate with Sticky Digital

At Sticky Digital, we specialize in data-driven retention strategies to increase repeat purchases, enhance loyalty, and maximize CLV.

📩 Want to improve your customer retention rate? Get a free audit.