GITNUX MARKETDATA REPORT 2023

Must-Know Retention Kpis [Latest Report]

Last Updated: October 31, 2023

Written & Summarized by: Jannik Lindner

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Highlights: The Most Important Retention Kpis

1. Retention Rate
2. Churn Rate
3. Repeat Purchase Rate
4. Customer Lifetime Value (CLV)
5. Average Revenue per User (ARPU)
6. Net Promoter Score (NPS)
7. Customer Satisfaction Score (CSAT)
8. Customer Effort Score (CES)
9. Reactivation Rate
10. Renewal Rate
11. Rate of Customer Referrals

Retention Kpis: Our Guide

Understanding the success of your business goes beyond just acquiring new customers; it’s about how well you hold onto them. In our latest report, we delve deep into the must-know retention Key Performance Indicators (KPIs) essential for measuring and enhancing customer loyalty. Stay ahead of the curve by learning how to analyze, interpret, and apply these vital metrics to improve your business’s growth and sustainability.

Retention Rate

The percentage of customers who continue to do business with a company over a specified period of time.

Churn Rate

The percentage of customers who stop using a product or service during a specified time period. This is the inverse of the retention rate and indicates customer dissatisfaction.

Repeat Purchase Rate

The percentage of customers who make more than one purchase within a specified time frame. A higher repeat purchase rate indicates high customer satisfaction and loyalty.

Customer Lifetime Value

The projected revenue that a customer will generate for a business over the entire duration of their relationship.

Average Revenue Per User

The average revenue generated by each user during a specific time period. A higher ARPU can result from a combination of customer retention and increased spending.

Net Promoter Score

Customer loyalty measured by NPS (Net Promoter Score), based on likelihood to recommend, indicates satisfaction and loyalty.

Customer Satisfaction Score

The average score that customers assign to a company based on their overall satisfaction with the product or service. A higher CSAT score indicates better customer retention and satisfaction.

Customer Effort Score

Customer Effort Score (CES) measures ease of interaction with a business, lower CES = smoother experience, better retention.

Internal Promotion Rate

The reactivation rate measures the return of inactive customers within a set timeframe, indicating successful customer re- engagement.

Renewal Rate

The percentage of customers who renew their subscription or contract at the end of their term. A higher renewal rate indicates better customer satisfaction and long-term retention.

Rate Of Customer Referrals

The percentage of new customers from customer referrals reflects customer satisfaction and business growth.

Frequently Asked Questions

What are Retention KPIs and why are they important for businesses?

Retention KPIs (Key Performance Indicators) are specific metrics used to measure the effectiveness of customer retention efforts in a business. They are essential for businesses as they help in identifying potential issues in customer satisfaction, fostering customer loyalty, reducing churn rate, and ultimately, increasing the company’s long-term revenue and growth.

What are some common Retention KPIs that businesses should track?

Some common Retention KPIs are Customer Retention Rate, Churn Rate, Repeat Purchase Ratio, Customer Lifetime Value, and Average Revenue Per User. Tracking these KPIs allows businesses to gauge the success of their retention strategies, make informed decisions, and optimize their efforts for better customer satisfaction and improved retention rates.

How do you calculate Customer Retention Rate (CRR)?

To calculate Customer Retention Rate (CRR), you need to consider the number of customers at the beginning of a period (Start), the number of customers at the end of the period (End), and the number of new customers acquired during the period (New). Use the following formula CRR = ((End – New) / Start) x 100. This provides the percentage of customers retained during the given period.

How can a business improve its Retention KPIs?

A business can improve its Retention KPIs by implementing strategies such as personalized marketing, customer feedback collection and analysis, excellent customer service, offering loyalty programs or incentives, and using data analysis to identify areas for improvement within the customer experience journey.

How often should businesses review and analyze their Retention KPIs?

The frequency of reviewing and analyzing Retention KPIs depends on the specific business and industry. However, it’s generally recommended to analyze these KPIs on a monthly or quarterly basis. This will allow businesses to stay informed about their customer retention performance and make adjustments to their strategies in a timely manner. Regular analysis also helps businesses to address potential issues before they become larger problems, contributing to higher customer satisfaction and retention rates.

How we write these articles

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly. See our Editorial Guidelines.

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