Customer retention is a true measure of your ongoing ability to meet your customers' needs.
I love Chip Conley's Customer Pyramid model.
Here's my summary:
Imagine a pyramid with three levels of customer needs you can meet.
Base Level: "Meets Expectations": you meet your customer's base needs. These customers are not loyal and you're treated as a commodity.
Mid Level: "Meets Desires": you understand and deliver on the unique preferences of each customer. These customers are loyal because you create customer intimacy.
Top Level: "Meets Unrecognized Needs": you deliver transformative experiences your customers haven't imagined. These customers become your evangelists.
If retention is an issue for your business, your standards for meeting your customers’ needs may be too low.
Where in your business are you only meeting expectations?
What changes do you need to make?