Customer Retention Metrics
How do you track the success of customer or account management programs? Here are some examples I’ve seen:
- Customer retention rate = The percentage of customers who stay with you over the total number of customers. The downside is that this number ignores the fact that some customers are more important/valuable than others.
- Revenue retention rate = Percentage of total potential revenue retained. This metric misses the impact of account expansion but works better in environments with predictable customer contracts.
- Average customer revenue (revenue yield) = total revenue divided by the number of customers. This gives you a sense of how well you are growing your wallet share with customers.
- Repeat purchase rate: As the name implies, this reflects the percentage of business from existing customers.
- Net promoter score: The industry standard metric captures how likely a customer is to tell a friend about your business.
I’ve seen a range of approaches and find that more than one metric is often needed to tell the whole story.
Did I miss any other meaningful retention metrics?
