It is profitable. If one new client costs the same money as retaining 5-6 existing ones, then it is more profitable to work in both directions. And understanding the Retention Rate helps to optimize and redirect expenses to marketing and advertising campaigns.
Satisfied customers try new products of the company because they trust them and are willing to spend more on them. Loyal users become brand advocates, recommending it to their circle of friends, bringing in new customers.
RR analysis helps to identify weaknesses of goods and services, and improve the product in time. As a result, customer satisfaction increases: they see that the company cares about them, that it listens to their opinion. In this case, people are more likely to come back again.
Working on user retention helps to better forecast future austria consumer email list revenues and plan strategic initiatives. This allows the business to be more resilient and prepared for changes in the market.
How to Calculate Retention Rate
The formula for calculating Retention Rate is simple:
Let's calculate the user retention rate:
Take the number of customers at the beginning of the billing period.
Calculate how much is left at the end of this period.
Subtract from the final number of clients all new ones that appeared during the month.
Divide the result by the number of customers at the beginning of the month and multiply by 100%.
Example
At the beginning of the year you had 100 clients, at the end there were 120. During this period, 30 new clients were attracted.
Let's count:
120 (clients at the end) - 30 (new) = 90 (remaining)
90 (remaining) ÷ 100 (clients since the beginning of the year) = 0.9
0.9 x 100 = 90%
Retention Rate for the year is 90%. This means that 90% of your clients have stayed with you.
- Board index
- All times are UTC
- Delete cookies
- Contact us