A low retention rate might indicate poor customer fit or dissatisfaction
Posted: Mon Dec 23, 2024 8:14 am
Customer acquisition cost (CAC)
Conversion rate
New leads
Average purchase value
Number of sale activities
Upsell and cross-sell rates
Sales cycle length
Lead response time
Employee satisfaction
1. Customer lifetime value
Customer lifetime value (CLV) is the total income a company brings in from a typical customer over the entirety of their time as a customer. It includes the value of initial purchases, renewals, upsells, cross-sells, and any other income.
CLV is crucial because it shows how much kuwait mobile number digits revenue a company can expect to earn over the long term and how much each customer is worth to the business. It can also shine a light on customer fit, customer retention efforts, and more.
CLV formula:
CLV = (average transaction size) x (average number of transactions) x (retention period)
2. Retention rate
Customer retention rate measures the likelihood your business will keep customers over a given period.
ith your product or customer support. Tracking the retention rate can help you catch these issues and make changes to retain more customers.
Customer retention rate formula:
Customer retention rate = (Customers at the end of a period) – (new customers gained) / customers at the beginning of a period
3. Churn rate
The churn rate is essentially the flip side of the retention rate and measures the rate at which a business loses customers.
Most of your revenue likely comes from existing customers, and it’s much more cost-effective to keep a current customer than gain a new one. So, while every business has some churn, tracking your retention or churn rate is essential.
Customer churn rate formula:
Conversion rate
New leads
Average purchase value
Number of sale activities
Upsell and cross-sell rates
Sales cycle length
Lead response time
Employee satisfaction
1. Customer lifetime value
Customer lifetime value (CLV) is the total income a company brings in from a typical customer over the entirety of their time as a customer. It includes the value of initial purchases, renewals, upsells, cross-sells, and any other income.
CLV is crucial because it shows how much kuwait mobile number digits revenue a company can expect to earn over the long term and how much each customer is worth to the business. It can also shine a light on customer fit, customer retention efforts, and more.
CLV formula:
CLV = (average transaction size) x (average number of transactions) x (retention period)
2. Retention rate
Customer retention rate measures the likelihood your business will keep customers over a given period.
ith your product or customer support. Tracking the retention rate can help you catch these issues and make changes to retain more customers.
Customer retention rate formula:
Customer retention rate = (Customers at the end of a period) – (new customers gained) / customers at the beginning of a period
3. Churn rate
The churn rate is essentially the flip side of the retention rate and measures the rate at which a business loses customers.
Most of your revenue likely comes from existing customers, and it’s much more cost-effective to keep a current customer than gain a new one. So, while every business has some churn, tracking your retention or churn rate is essential.
Customer churn rate formula: