Customer retention rate is crucial for businesses because it directly impacts a company's profitability. Retaining existing customers is often less expensive than acquiring new ones, making it a cost-effective strategy. A high retention rate usually signifies customer satisfaction, which can lead to increased customer lifetime value as satisfied customers are more likely to make repeat purchases and spend more. Moreover, satisfied customers often become brand advocates, providing valuable word-of-mouth marketing. A focus on improving customer retention rate can also lead to valuable insights about your products or services, helping you make necessary improvements. Therefore, monitoring and aiming to increase the customer retention rate is an important aspect of strategic business growth.