Smart Ways to Calculate Customer Retention Rate
Do you know the ways to calculate customer retention rate? Customer retention rate is important to every business online.
If you want to know the ways to calculate customer retention rate, you can continue reading this article. You can boost your business when you understand this strategy.
Customer retention happens when a customer buys more from you. The customer retention rate can be seen in comparison.
It compares the number of customers you have retained to your total number of customers during a certain period.
To improve this strategy, you have to make use of social media, customer loyalty programs, incentives, and customer feedback surveys.
The ways to calculate customer retention rate
Marketing often deals with bringing customers to your business. However, the strategy to keep this customer is what makes the difference.
What is customer retention?
Customer retention happens when your customer buys from you once and start coming back to make more purchase from your business.
To understand this process, you should have ways to calculate the customer retention rates in your business. Many businesses are not aware of these customers and end up losing them.
With a customer retention practice, you can help these customers better with their needs and support them too with marketing campaigns directed toward them.
What are the ways to calculate customer retention rate?
A business’s customer retention rate can be defined as the percentage of the customers who are no longer your first-time customers. How do you calculate this rate?
You should get the following:
- The total number of customers at the start of the period, signified by the variable S
- The total number of customers at the end of this period, signified by the variable E
- The total number of new customers acquired during this period, signified by the variable N
You should know that in the ways to calculate customer retention rate, the N stands for the number of customers your businesses gained
Simple ways to calculate customer retention rate
You can make use of the customer retention rate (CRR) formula:
CRR = [(E – N)/S]
While calculating the customer retention rate, the decimal becomes the value. To convert the decimal to a percentage is by multiplying it by 100.
The customer retention rate is the ratio between the number of customers kept during a given period and the total number of customers at the start of that period.
Ways to improve your customer retention rate
The ways to calculate customer retention rate is done with the above formula and can be used by every business.
The following are some of the ways to improve your customer retention rate:
Customer loyalty programs
With customer loyalty programs it becomes easier to improve your customer retention rate. You do not have to be a corporation or big company before you make use of this strategy.
We have different ways to calculate customer retention rate, especially with the customer loyalty programs.
You can start by registering your customer in your loyalty programs. This improves your customer retention rate.
This is one of the ways to calculate customer retention rate.
Customer feedback surveys
You can make use of customer feedback surveys as one of the ways to calculate customer retention rate. How does this work to your advantage?
You give them a feedback surveys to fill in and get their responses to your products and services. With this feedback survey, you can access your customers.
Social media is among the best ways to calculate customer retention rate. With social media, you can achieve more.
You can easily retain your customers and offer them better value for everything they buy from your business..
With incentives, you can convert your first-time buyers into customers. When they become customers, you can easily calculate your customer retention rate.
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