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?

Author: Frank Days

Share This Post On