Calculating customer retention cost is relatively simple. Start by identifying all the expenses associated with keeping a customer engaged and coming back for more. This may include marketing costs, product upgrades or special discounts and offers. Once you have identified these costs, add them together to get your total retention cost. It's important to consider both short-term and long-term expenses when calculating customer retention cost in order to gain a full picture of what it takes to keep customers around. By properly tracking this data, businesses can better understand their customers’ behaviors and make informed decisions about how to spend their resources wisely.