Customer retention rates measure the percentage of customers a business retains over a specific period. This metric helps companies understand how well they keep their existing customers engaged and satisfied. A higher retention rate indicates that customers are happy with the products or services, leading to repeat business and increased profitability. To calculate the retention rate, businesses typically divide the number of customers at the end of a period by the number of customers at the beginning, then multiply by 100. Improving customer retention can be achieved through strategies like enhancing customer service, offering loyalty programs, and personalizing communication.