How to measure Customer
Retention?
It has been
found that customer retention
has more impact on profits than
market share, economies of scale
and other variables that are
considered to provide
competitive advantage to a firm.
In fact, it has been found that
companies, which reduced
customer defections by 5 per
cent, could boost profits from
25 per cent to 85 per cent.
See more Customer
Retention Facts...Click Here
Steps to Improve Customer
retention
Step1:
Define What Customer retention means to
your business, market, or industry:
Frequency of purchase, Inquiries,
Turn-around-time requirements on
service, notification of success are a
few of them.
Tip:
The definition of customer retention
that is in terms of percentage share of
customer savings, borrowings, spending,
or purchases is more useful than just
absolute numbers of customers.
Step2:
Measuring Customer retention :
Without measuring customer retention it
cannot be managed.
Tip:
Technology solutions can be used to
measure and monitor the customer
retention. It can be by the number of
times a customer logs into their
self-service site, or could be the
number of Quotes generated for the
customer.
Step3:
Identify why your customer defect? Most
popular reasons are mis-aligned Price,
Product, Service, market, Technology,
organizational
Step4:
Monitor the defects, analyze data and
fix pertinent issues
Step5:
Start with step1. This is an ongoing
process
SedTec can help you with solutions that
will enhance customer retention
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