In addition, customer loyalty is a Current customers provide significant competitive advantage:
The probability of selling to a current customer is 60-70% and to a new customer only 5-20%;
Retaining current customers is 5 times cheaper than attracting new ones;
Loyal customers spend 67% more than new customers.
This data confirms the evidence that repeat customers are the key to the stability and success of your business. But how do you make sure that customers stay with you and don’t go to your competitors?
The answer is: by improving the customer experience. If 61% of customers will leave for a competitor after just one bad experience, that’s a 22% increase from the previous year . If it’s two bad experiences, 76% of customers will leave. (Zendesk, 2022)
Formula to calculate customer retention rate
Customer Retention Rate (CRR) determines the number of loyal customers you have, i.e. it helps you analyze customer churn over a certain period of time.
To calculate your customer retention rate, define the time period you want to measure: month, quarter, year, or dataset another time period.
Then you should take:
The above is constitut in the formula:
CRR = (number of customers at the end of the period – number of new customers for the period) / (number of customers at the beginning of the period) * 100%
For example, if you start a track the content’s performance month with 50 customers, you acquir 30 new ones during this time, but lost 10, then you end the month with 70 customers.
The customer retention rate will be: CRR = ((70 – 30) / 50) * 100% = 80%
Measuring CRR month-over-month america email list and year-over-year reveals trends. For example, if the rate is increasing, you should try to identify effective campaigns, cohort behavior, and service patterns that may have been the basis for this trend.