It is often said in sports that “you’re only as good as your last game.” This can also be applied in the business world, “we’re only as good as our last customer.” Cliche? Yes, but when you get down to base-level with your customer’s experience this is a powerful lesson.
If you’re not retaining your customers, you’ll always be swimming against the tide and your marketing efforts will not be beneficial. Your customer retention rate is a huge factor in regards to the growth of your company.
The formula below is a great key to follow link.
Customer Retention Rate = ((CE-CN)/CS)) X 100
CE = number of customers at end of period
CN = number of new customers acquired during period
CS = number of customers at start of period
The author is saying that if you start the (week/month/year/other period you choose) with 200 customers. You lose 20 customers, but you gain 40 customers. At the end of the period you have 220 customers.
The example below actually shows a gain of customers regardless of how many lost.
220–40 = 180; 180/200 = .9; .9 x 100 = 90. Your retention rate for the period was 90 percent.
Attrition rates are obsolete as long as you’re replacing the customers. If you are not replacing them, then there are additional concerns–a double whammy. If you start the quarter with 100 members and at the end of the quarter you have 75, then your retention rate is 75% and your attrition rate would be 25%.
Customer retention and attrition rates serve as indicators of market or industry trends, good or poor customer service, good or poor product quality, or a number of other factors. Businesses also often use retention and attrition rates to determine customer loyalty. Again, established customers who continue to use your product or service are “retained” and would be represented in your customer retention rate. Customers who, for one reason or another, stop using your product or service are represented in your customer attrition rate.
How do you improve these numbers? You must obtain regular feedback from your retained and non-retained customers to determine areas of improvement for your business.
You need to get to know your customers. It is mandatory for every company that your databases and contact information for your customers be accurately maintained and up-to-date. If you have neglected your customer data, you must prioritize it’s recovery. The best way to achieve this is to contact a data service such as Data Ladder who can help you update every entry and expand upon them like adding their new address, social media accounts, and correcting any inaccuracies.
At the end of the day, it comes down to momentum and expanding upon your customer base. For every customer lost, it will cost you over $200 on average. Instead of swimming against the tide, turn things around and go with the flow. This can only be achieved by good customer experiences.
“You’re only as good as your last customer.” Well, let’s just say we can be as good as we want to be by prioritizing every customer and doing our best to retain them and to keep them satisfied enough to be loyal customers for a long time to come.