another word for running total for money

Then find the number of total customers at the end of the time period (E).

Next, collect the number of existing customers at the start of the time period (S).

To determine your retention rate, first identify the time frame you want to study.

How do you calculate customer retention rate?

Monitoring retention metrics is critical for a business to understand lifetime customer value and to quantify the efficacy of its marketing strategy and customer service program. In fact, if you think you can simply offset churn by acquiring new customers, you can wind up ignoring serious flaws in your business. After all, if you start with 10 customers, lose two, but then gain four, that doesn’t mean you have a 120-percent retention rate. You also have to account for new customers you took on so they don’t throw off your data. (We’ll get into the formula a little later.) For example, if your business starts the year with 10 customers and loses two of them, you have an 80-percent retention rate.īut bear in mind-there’s a little more to your customer retention rate than that. It’s expressed as a percentage of a company’s existing customers who remain loyal within that time frame. What is customer retention rate?Ĭustomer retention rate measures the number of customers a company retains over a given period of time. There are several other customer retention metrics you can use in conjunction with retention and churn rates to cultivate a loyal customer base. While the primary metrics for understanding customer loyalty are customer retention rate and churn rate, these measurements can’t tell you everything you need to know about how and why customers return or leave.

It can be daunting (or even depressing) to think about, but churn is a powerful way for a business to understand what’s working well and what needs to improve. So, it’s critical for companies to keep an eye on their customer retention rate.Ĭonsidering how important it is for companies to hold on to their customers, having a high degree of visibility into customer churn is equally essential.

Loyal customers also contribute to your business’ health by providing referrals, promoting your brand on social media, and giving feedback to improve your product or service. There’s a simple, economic reason why customer retention is so important: Keeping your existing customers is a lot less expensive than trying to win new ones. Any company that wants to succeed must keep a close eye on its customer retention metrics.

Another word for running total for money