What is Retention Rate?
Retention rate shows what percentage of customers return and reorder within a given period. The 3-month e-commerce average is 20-30% — top brands reach 40%+.
Formula
Example
If you had 200 new customers in January and 50 reordered within 3 months, the 3-month retention rate = (50 / 200) × 100 = 25%.
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Related Terms
Churn Rate
Churn rate shows what percentage of customers you lose in a given period. The e-commerce average after first purchase is 20-30% — dropping to 10-15% after the second purchase.
LTV (Customer Lifetime Value)
LTV shows the total value a customer generates over their entire relationship. A healthy LTV:CAC ratio is at least 3:1.
Email Automation
Email automation is the automatic sending of pre-configured emails triggered by specific events — cart abandonment, purchase, birthday. The highest-ROI marketing channel.
Cohort Analysis
Cohort analysis groups customers by their first purchase date and tracks behavior over time. It is the gold standard for measuring LTV, retention, and campaign effectiveness.