How do you improve customer retention?
By Ahmed Fawzi
Published 2026-10-05 ยท Updated 2026-10-05
Why does customer retention matter so much?
Customer retention is the share of customers who keep buying from you over time. Losing customers is called churn.
Harvard Business Review reports that acquiring a new customer is 5 to 25 times more expensive than keeping an existing one (HBR, 2014). The same article cites Bain & Company's Fred Reichheld: increasing retention rates by 5% increases profits by 25% to 95%.
One honest note. Reichheld's original Bain brief makes the claim for financial services, saying a 5% increase in retention produces more than a 25% increase in profit. The wider 25% to 95% range comes from his research across industries, as summarized by HBR. Treat it as direction, not a promise for your business.
Reforge's Brian Balfour shows the effect clearly. In his model, a company with 85% monthly retention overtakes one with 65% retention, even while acquiring half as many users (Reforge).
How do you calculate customer retention rate?
Retention rate = ((E minus N) divided by S) x 100
- S = customers at the start of the period
- E = customers at the end of the period
- N = new customers gained during the period
Example: you start March with 2,000 customers, gain 500 new ones and end with 2,100. Retention = ((2,100 minus 500) / 2,000) x 100 = 80%.
For apps, teams usually track Day 1, Day 7 and Day 30 retention: the share of new users still active that many days after install.
What is a cohort and how do you read one?
A cohort is a group of users who share something, such as the month they first bought (Google Analytics Help). A cohort chart shows what share of each group comes back in month 1, 2, 3 and so on.
Read it in two ways:
- Down the columns: are newer cohorts retaining better than older ones? If yes, your changes are working.
- Along the curve: does it flatten? A curve that flattens means you have a loyal core. A curve that keeps falling to zero means a product or fit problem that marketing cannot fix alone.
GA4 has a built in cohort exploration. Apps can use the retention reports in AppsFlyer or Adjust.
8 ways to improve customer retention
- Fix onboarding. Get people to first value in one session: a first order, first transfer, first booking. Remove every step that is not needed.
- Send a welcome journey. Three to five messages in the first week that teach one useful thing each.
- Use WhatsApp for high value moments. Order updates, delivery times and reorder reminders get read. WhatsApp's policy requires opt in permission before you message people (WhatsApp Business Messaging Policy).
- Trigger push and email on behaviour, not dates. Abandoned cart, price drop, back in stock, payday reminders.
- Build a simple loyalty reward. Points, cashback or a free delivery tier. Keep the rules short enough to explain in one line.
- Personalize offers. Segment by what people bought and how often. A monthly buyer and a Ramadan only buyer need different messages.
- Run win back campaigns. Target customers inactive for 60, 90 or 180 days with a clear reason to return.
- Ask for feedback and act on it. Short surveys after delivery show the problems that make people leave.
Seasons matter here. In Egypt and the Gulf, Ramadan, Eid and White Friday are natural moments for loyalty and win back campaigns.
Proof: bringing inactive users back
For a leading Egyptian fintech app, OneKind ran a reactivation programme in 2024. 30% of users who had been inactive for 6+ months came back and made a transaction. The target was 40%, so we missed it, but it still turned a dead user base into active customers.
The work used CRM journeys on platforms like Insider, combined with retargeting ads and need based messaging.
How we approach retention at OneKind
- Measure first: build cohort charts by month, channel and country.
- Find the drop: day 1, week 1 or month 2. Each needs a different fix.
- Define the activation moment that predicts long term retention.
- Build the core journeys: welcome, abandoned action, reorder, win back.
- Pick channels per market. WhatsApp is central in Egypt and Saudi Arabia; email still works well for many UAE audiences.
- Test one message change at a time against a control group that gets nothing.
- Report retention monthly next to acquisition cost, so the team sees the full picture.
Typical CRM tool cost and setup time: from about $20 a month for email tools like Klaviyo on small lists, to around $4,000 for Insider and $7,400 for Braze. Setup with us takes about 5 weeks.
Related guides
App retention: how to keep users after install
Sources
Harvard Business Review, The Value of Keeping the Right Customers (Amy Gallo, 2014)
Bain & Company, Prescription for Cutting Costs (Fred Reichheld)
Reforge, Why Retention Is the Silent Killer (Brian Balfour)
Google Analytics Help, Cohort exploration
WhatsApp Business Messaging Policy
RetentionLab, Repeat purchase rate benchmarks
FAQ
What is a good customer retention rate?
It depends a lot on industry and buying frequency. Compare against your own past cohorts first, then against peers in your category. As a reference, Klaviyo and Shopify data put the median repeat purchase rate for online brands at about 27%, from 16% to 24% in fashion to 32% to 44% in food and drink. We found no public benchmark for Egypt.
What is the difference between retention and loyalty?
Retention measures whether customers come back. Loyalty is the reason they choose you even when a competitor is cheaper or closer.
Is it really 5 times cheaper to keep a customer?
HBR reports acquiring a customer costs 5 to 25 times more than retaining one. The exact ratio varies by business, so measure your own CAC and retention costs.
What is churn rate?
Churn rate is the share of customers who stop buying in a period. It is roughly 100% minus your retention rate for that period.
Which channel is best for retention in Egypt?
WhatsApp usually gets the most attention, with push for apps and email for receipts and longer content. Always get opt in first.
Want more customers to come back and buy again? See our growth marketing service