Retention is a shop's ability to keep the customers it already has. The retention rate is the share of customers from the start of a period who are still buying at the end of it, leaving out anyone new who arrived in between. If a shop starts the year with 200 regulars and 170 of those same people are still coming in December, its yearly retention is 85 percent, however many new regulars it found along the way.
For an independent shop, retention is usually worth more than growth. Winning a new regular takes months of good service and some luck. Keeping an existing one mostly takes not giving them a reason to leave: consistent quality, staff who remember them, prices that move rarely and are explained when they do, and a small thank you for the habit.
In practice
A deli counts 200 regulars in January, people the staff would recognise who come at least twice a month. By June, 168 of those same people are still coming. Six-month retention is 168 divided by 200, or 84 percent. Thirty-two regulars have drifted off, some for reasons the shop cannot touch, such as moving away.
Now suppose the deli could hold retention at 90 percent instead. That is 180 of the 200 still coming in June, twelve more than before. If a regular at this deli spends about $900 a year, those twelve people are worth $10,800 a year in sales, which is more than many small marketing efforts ever bring in.
What moves retention is mostly ordinary: the same good loaf every week, the same friendly greeting, a card that is easy to fill and a reward that is easy to collect. Retention problems tend to show up first as a rise in lapsed members, and it pays to look at the list before the drift becomes a flood.