{"id":40836,"date":"2024-06-24T00:00:00","date_gmt":"2024-06-24T07:00:00","guid":{"rendered":"https:\/\/newrcblog.wpengine.com\/customer-retention-rate\/"},"modified":"2025-03-13T06:18:30","modified_gmt":"2025-03-13T13:18:30","slug":"customer-retention-rate","status":"publish","type":"post","link":"\/us\/en\/blog\/customer-retention-rate\/","title":{"rendered":"How to calculate and improve your customer retention rate"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">What is customer retention rate (CRR)? It\u2019s a measure of how well you keep your customers over time.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s an important indicator of the health of your business and a vital number to keep track of. It\u2019s tempting to put a lot of time and effort into finding new customers. But the reality is that, dollar for dollar, it\u2019s far cheaper to keep an existing customer happy (and keep selling to them) than to woo a new one.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Not only that, current customers often buy more things and even refer their friends and families\u2014at no cost to you. Having a high customer retention rate should be a key part of your business strategy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We won\u2019t just show you how to calculate your customer retention rate in this post. We\u2019ll also look at other useful strategies to give your CRR a boost if it needs a little love. If you want to, skip ahead to the section you\u2019re interested in:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#how-to\"><span style=\"font-weight: 400;\">How to calculate your customer retention rate in 4 steps<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#customer-retention\"><span style=\"font-weight: 400;\">Customer retention rate formula<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#good-crr\"><span style=\"font-weight: 400;\">What a \u201cgood\u201d CRR is<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#vs\"><span style=\"font-weight: 400;\">Customer retention rate vs. customer churn rate<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#10\"><span style=\"font-weight: 400;\">10 ways to improve your CRR<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"#other\"><span style=\"font-weight: 400;\">Other business metrics you may want to track<\/span><\/a><\/li>\n<\/ul>\n<h2 id=\"how-to\" style=\"padding-top: 20px;\"><strong>How do you calculate your customer retention rate?\u00a0<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Calculating your CRR is easy:\u00a0<\/span><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> Find out how many customers you have at the end of a given period (week, month, or quarter).\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Subtract the number of new customers you\u2019ve acquired over that time.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Divide by the number of customers you had at the beginning of that period.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> Then, multiply that by one hundred.<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">That\u2019s a bit of a mouthful so let\u2019s break it down into a formula:<\/span><\/p>\n<p><img decoding=\"async\" id=\"customer-retention\" class=\"aligncenter wp-image-43311 size-full\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/03\/customer-retention-rate.png\" alt=\"The customer retention rate formula; # of customers at the end of a period, minus # of customers acquired in that time, divided by # of customers at the beginning, times 100\" width=\"930\" height=\"700\" \/><\/p>\n<p><span style=\"font-weight: 400;\">And here\u2019s what this customer retention rate calculation formula looks like as a business scenario:\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">If you had 1,000 customers at the beginning of Q1 and ended the quarter with 1,200 customers, after having won 300 new ones over the span of Q1, your CRR would be 90%.<\/span><\/i><\/p>\n<p><img decoding=\"async\" class=\"wp-image-2033 size-full aligncenter\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/07\/CRR-formula.png\" alt=\"Customer retention rate formula\" width=\"743\" height=\"74\" \/><\/p>\n<p><span style=\"font-weight: 400;\">(Note that this means that the business lost 100 customers over that span. Hey, it happens.)\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Pretty straightforward, right?<\/span><\/p>\n<p><a href=\"https:\/\/www.ringcentral.com\/remote-readiness\"><img decoding=\"async\" class=\"alignnone size-full wp-image-45676\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/12\/Banner-Image-for-Blog-Promo.png\" alt=\"Remote Readiness CTA\" width=\"695\" height=\"247\" \/><\/a><\/p>\n<p><a name=\"What a good CRR is\"><\/a><\/p>\n<h2 id=\"good-crr\" style=\"padding-top: 20px;\">What\u2019s a \u201cgood\u201d customer retention rate?<\/h2>\n<p><span style=\"font-weight: 400;\">That\u2019s a big question that doesn\u2019t have a clear answer. For instance, a software as a service (SaaS) company that uses a monthly subscription model is going to have a much different retention rate than an accounting firm that does 90% of their business during one month of the year.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you have an accounting firm and you\u2019re good at your job, you might have a pretty high CRR. On the other hand, if you own a retail store, you might not have as many repeat customers in comparison.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For most industries, CRR sits between <\/span><a href=\"https:\/\/explodingtopics.com\/blog\/customer-retention-rates\"><span style=\"font-weight: 400;\">50% and 84%<\/span><\/a><span style=\"font-weight: 400;\">. The media and professional services customer retention rate is at the top end of that scale. IT and software businesses, like SaaS companies, would expect a good customer retention rate to hover at around 75%.<\/span><\/p>\n<p><a href=\"https:\/\/www.ringcentral.com\/customer-communications-trends-report\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"wp-image-43085 size-large aligncenter\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/02\/losing-customers-1024x711.png\" alt=\"loss in customer retention rate because of customer service\" width=\"1024\" height=\"711\" \/><\/a><\/p>\n<div class=\"tip\">\n<p class=\"tip-heading\"><b>\ud83d\udca1 Pro-tip:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If you have happy customers, it\u2019s a great opportunity to <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/writing-a-case-study\/\"><span style=\"font-weight: 400;\">write case studies<\/span><\/a><span style=\"font-weight: 400;\"> about them. It can show other potential customers how to use your product, how great your customer service is, and so on.<\/span><\/p>\n<\/div>\n<p><span style=\"font-weight: 400;\">Keep in mind that these numbers are <a href=\"https:\/\/www.omnicalculator.com\/math\/average\">broad average calculations<\/a> that can change drastically when you drill down into their respective subcategories. While it\u2019s tempting to benchmark your client retention rate against the average for your industry, don\u2019t put too much stock in it. Just focus on improving your baseline number.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If possible, retroactively calculate your CRR as far back as you can and see what happens to the numbers. Are they going up, down, or staying the same? How does each quarter look? What about year-over-year business? If the rate is trending down over time, that could be a red flag that needs to be addressed.<\/span><\/p>\n<h2 id=\"vs\"><span style=\"font-weight: 400;\">Customer retention rate vs. customer churn rate<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Customer retention rate shouldn\u2019t be confused with customer churn rate, but the two are closely linked. In fact, they\u2019re two sides of the same coin.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While your business\u2019s CRR tells you how long a customer stays a customer, your churn rate tells you the rate at which customers stop doing business with you. In other words, it tells you how fast you lose them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Tactics to reduce churn include identifying pain points, addressing customer complaints promptly, and continuously improving products or services.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Analyzing both CRR and churn rate can help you create strategies that foster long-term relationships and ensure customer loyalty.<\/span><\/p>\n<h2 id=\"10\" style=\"padding-top: 20px;\"><strong>10 ways to improve your customer retention rate<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The reasons why customers leave are endless. It may be as simple as the fact that they don\u2019t need what you offer anymore. But it could also be an issue that\u2019s making a larger negative impact on your business\u2014and you may not even be aware of it.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s change that. Here are some things to consider when wondering how to improve your customer retention rate:\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">1. Make it easy for customers to reach you\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Think of the last time you had a less-than-stellar <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-experience\/\"><span style=\"font-weight: 400;\">customer experience<\/span><\/a><span style=\"font-weight: 400;\"> with a company. Do you still do business with that company? Probably not.<\/span><a href=\"https:\/\/www.ringcentral.com\/customer-communications-trends-report\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"wp-image-43071 size-large aligncenter\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/02\/annoyances-about-calling-companies-1024x536.jpg\" alt=\"annoyances about calling customer service lines and impact on customer retention rate\" width=\"1024\" height=\"536\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s not rocket science: Make it easy for customers to get in touch.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A reliable <\/span><a href=\"https:\/\/www.ringcentral.com\/lp\/small-business-phone-service.html\"><span style=\"font-weight: 400;\">business phone service<\/span><\/a><span style=\"font-weight: 400;\"> with <\/span><a href=\"https:\/\/www.ringcentral.com\/office\/features\/answering-rules\/overview.html\"><span style=\"font-weight: 400;\">effective call routing<\/span><\/a><span style=\"font-weight: 400;\"> will streamline and simplify the way your customers contact you. Plus, make sure your inbound calls are being forwarded (when it makes sense to\u2014like during travel, or any time you need to make yourself available).<\/span><\/p>\n<figure id=\"attachment_2026\" aria-describedby=\"caption-attachment-2026\" style=\"width: 376px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"wp-image-2026 size-full\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/07\/image5-9.png\" alt=\"RingCentral call handling and forwarding\" width=\"376\" height=\"813\" \/><figcaption id=\"caption-attachment-2026\" class=\"wp-caption-text\">For example, phone systems like RingCentral let you route calls to your personal number and your colleagues when you can\u2019t pick up.<\/figcaption><\/figure>\n<h3 style=\"color: #434343; padding-top: 20px;\"><span style=\"font-weight: 400;\">2. Check your online presence<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">What\u2019s the state of your website and social channels? Are they informative and updated often? Automating transactions and capturing leads? Or are they just there, waiting for the day you\u2019ll have a moment to spare to get to them?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your online channels are often the first place customers go for information or help. Make sure you\u2019re easy to find and give people different ways to get a hold of you.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Just setting up social media profiles on a bunch of different apps isn\u2019t enough. You also have to respond to these messages\u2014and not make your customers wait for a reply. <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/online-customer-service\/\"><span style=\"font-weight: 400;\">Online customer service<\/span><\/a><span style=\"font-weight: 400;\"> isn\u2019t easy, but if you have the right tools, it can be done (even if you have a team of one handling it).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, RingCentral\u2019s omnichannel <\/span><a href=\"https:\/\/www.ringcentral.com\/contact-center.html\"><span style=\"font-weight: 400;\">contact center<\/span><\/a><span style=\"font-weight: 400;\"> solution, RingCX, lets you see and respond to all your social media, live-chat, and email messages all in one place, so you don\u2019t have to toggle between windows and tabs all day:<\/span><\/p>\n<p><iframe sandbox=\"allow-scripts allow-same-origin allow-presentation\" title=\"RingCX | Create effortless customer experiences\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/fjy9kgSehhw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen sandbox=\"allow-same-origin allow-scripts allow-presentation\"><\/iframe><\/p>\n<h3><span style=\"font-weight: 400;\">3. Get back to customers quickly enough<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Just like not being able to reach a human, having your voicemail, email, or social media message ignored\u2014or acknowledged at a snail\u2019s pace\u2014is just as frustrating.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.ringcentral.com\/customer-communications-trends-report.html\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter wp-image-6227 size-large\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/07\/how-many-times-call-a-company-1024x536.jpg\" alt=\"impact of answering inbound calls on customer retention rate\" width=\"840\" height=\"440\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Establish a hard rule about how quickly you return voicemails (<\/span><a href=\"https:\/\/www.ringcentral.com\/office\/features\/visual-voicemail\/overview.html\"><span style=\"font-weight: 400;\">Visual Voicemail<\/span><\/a><span style=\"font-weight: 400;\"> can save you time by allowing you to read instead of listen to messages, and it helps you prioritize which ones you need to respond to first). If you\u00a0<em>really<\/em>\u00a0want to keep right on top of customer calls, you might need a <a href=\"https:\/\/www.ringcentral.com\/how-does-virtual-phone-number-work.html\">virtual phone number<\/a>.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And don\u2019t forget to set aside time every day to check your email or respond to comments on social media. All of these actions together help you answer customer questions quickly, solve their problems, and keep them as customers longer.<\/span><\/p>\n<div class=\"tip\">\n<p class=\"tip-heading\"><b>\ud83d\udca1 Pro-tip:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Dig through your <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-experience-analytics\/\"><span style=\"font-weight: 400;\">customer experience analytics<\/span><\/a><span style=\"font-weight: 400;\"> and make sure to track metrics like your average handle time and <a href=\"https:\/\/www.ringcentral.com\/first-call-resolution.html\">first call resolution<\/a> standard to see if you\u2019re getting back to your customers and prospects in a timely enough manner.<\/span><\/p>\n<\/div>\n<h3><span style=\"font-weight: 400;\">4. Pay attention to your onboarding\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If your product or service comes with a learning curve, how steep is it? More importantly, is there something you can do to make things easier for a new customer?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The first few interactions they have with your product will have a massive impact on their decision to keep using it or to look for another solution. Find out what makes customers want to stick with your product, then give them resources to make the experience easy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, some companies send onboarding or welcome emails to new customers to help them get started.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">5. Price your product or services correctly\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Finding the best deal is just part of human nature. It\u2019s often the biggest deciding factor in a purchase decision.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Are you pricing your product or service fairly? Is the cost in-line with the rest of your industry? If your price is higher, are you providing more value? And is that value being clearly communicated? Consider running a price sensitivity test to determine what the \u201cright\u201d price should be. Ensuring customers feel they\u2019re getting value for money will help boost that customer retention rate.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">6. Use a loyalty program<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">They\u2019ve been around forever because they work. Is there something you could do to inspire more loyalty and increase your customer retention rate?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Think buy-X-get-one-free programs or discounts on annual subscriptions. If you\u2019re feeling generous, the odd surprise \u201cgift\u201d can <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-appreciation-ideas\/\"><span style=\"font-weight: 400;\">keep your customers happy<\/span><\/a><span style=\"font-weight: 400;\"> and inspire reciprocity (in the form of continued business).<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">7. Zoom in on your competition<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Keeping your customers from going to your competition is a big part of running a business. This begins with understanding what you do well and focusing on it. But it also involves understanding what your competition is doing to win customers at your expense.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Is their product better? Cheaper? Easier to use? Investigate from all sides. Buy their product. Go through their onboarding process. Call their help line. Sign up for their newsletter. You\u2019re going to learn a lot\u2014and it might even reveal things you can start doing yourself.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">8. Look at your product.<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Are your customers getting stuck with your product? Something that doesn\u2019t make sense or isn\u2019t clearly explained? Maybe you\u2019re experiencing downtime that you don\u2019t know about? Your product is the first place you should check for ways to improve\u2014if it doesn\u2019t work, nothing else matters. <\/span><\/p>\n<div class=\"tip\">\n<p class=\"tip-heading\"><b>\ud83d\udca1 Pro-tip:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">To help your customers get to know your product and learn how to use it on their own without needing your constant guidance, create a <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/create-knowledge-base\/\"><span style=\"font-weight: 400;\">knowledge base<\/span><\/a><span style=\"font-weight: 400;\"> that they can explore in their own time.<\/span><\/p>\n<\/div>\n<h3><span style=\"font-weight: 400;\">9. Keep track of what others are saying\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A bad <\/span><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-review-examples\/\"><span style=\"font-weight: 400;\">customer review<\/span><\/a><span style=\"font-weight: 400;\"> or two isn\u2019t something to worry about. But three (or more)?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There may be a good reason for them. Look for trends\u2014both good and bad\u2014in the reviews people leave for you. If possible, ask old customers about their experiences and find out why they left. They\u2019ll give you an honest answer if you\u2019re asking in earnest. <\/span><\/p>\n<h3><span style=\"font-weight: 400;\">10. Devise a plan of attack<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">You\u2019ve identified a handful of issues that could be keeping your CRR lower than it should be. Now, create a plan to address these issues.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Look for the easy wins first: updating your business address and hours in Google Maps, focusing on responding to your customers\u2019 questions more quickly, and <a href=\"https:\/\/www.freshworks.com\/knowledge-base\/faq\/software\/\">creating an FAQ page<\/a> so that your customers can self-service.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You\u2019d be surprised at how much of an impact small improvements make in reducing churn\u2014especially at scale. Then, start addressing the bigger tasks. Commit to a schedule to make sure it gets done. Consider hiring someone to do it if it\u2019s not your area of expertise. And conduct audits regularly.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s also important to be strategic about changes you make. Resist knee-jerk decisions and focus on sustained, manageable improvement and optimization.<\/span><\/p>\n<h2 id=\"other\"><span style=\"font-weight: 400;\">Other key retention metrics to track<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Your CRR is a great place to start and a crucial metric to track for most businesses. But it may not be telling you the whole story. Here are a few other important metrics that you may want to start tracking:<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Lifetime Value (LTV)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">What is the average value of every customer over the course of their lifecycle? This metric helps SaaS, media, and financial companies better understand their customers\u2019 needs and the value of their product, and predict future earnings.<\/span><\/p>\n<h3 class=\"heading h3\"><img decoding=\"async\" class=\"aligncenter wp-image-43072 size-full\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/02\/customer-lifetime-value-formula-e1605035681486.png\" alt=\"Customer lifetime value = average purchase value minus average purchase frequency, multiplied by average customer lifespan\" width=\"900\" height=\"506\" \/><span style=\"font-weight: 400;\">Product Return Rate (PRR)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">How often are products being returned? Ecommerce businesses use this metric as an indicator for the quality of products and customer service they offer.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Churn rate<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">We covered churn rate earlier in this article, but put simply it\u2019s the rate at which you\u2019re losing customers or users (You want this to be low).<\/span><\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-43312 size-full\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/04\/churn-rate.png\" alt=\"customers at start of period minus customers at end of period, divided by customers at start of period \" width=\"930\" height=\"700\" \/><\/p>\n<h3 style=\"color: #434343; padding-top: 20px;\"><span style=\"font-weight: 400;\">Time Between Purchase (TBP)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">How frequently are your customers purchasing your products? This metric can tell ecommerce businesses with frequent repeat customers how much demand there is for their products, how much value they provide, and how good their customer service is. <\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Shopping Cart Abandonment rate (SCA)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Your customer has found what they need, placed it in the cart, made it all the way to the payment screen with a credit card in hand and\u2026 poof, they bounce.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This indicates a point of friction when customers have already said yes\u2014they want to give you their money, but for some reason, they can\u2019t. For example, a confirmation screen isn\u2019t loading or the transaction isn\u2019t completing. Find out why and fix it ASAP. <\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Net Promoter Score (NPS)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">NPS isn\u2019t an exact science and can\u2019t be calculated by just using existing sales or usage numbers. But it gives you a good idea of how your customers feel about you and how likely they are to recommend you to a friend. Conducting an NPS survey can be a big task, but worth it if you have the resources to do it. <\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Knowing how to calculate customer retention rate is just the first step<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Every business loses customers, and sometimes, it\u2019s out of your control.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Tracking your CRR can give you valuable insights about how to fix what\u2019s in your control. Things like providing excellent customer service, making your product easy to use, and ensuring it\u2019s simple to buy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The calculation only takes a moment, so be diligent about it. Addressing issues as you discover them will keep more of your customers happy and coming back.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Frequently asked questions<\/span><\/h2>\n<h3><span style=\"font-weight: 400;\">What are the best tools to use to measure customer retention rate?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The best tools for measuring customer retention rate\u2014and the reasons behind it\u2014include comprehensive web analytics platforms and CRM systems with detailed reporting and behavioral analytics.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can also use customer support systems with integrated analytics, and <a href=\"https:\/\/www.maxio.com\/subscription-management\">subscription management software<\/a>. These tools offer cohort analysis, user behavior tracking, customer journey mapping, and retention insights.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Why is customer retention important?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Customer retention is crucial because it reduces acquisition costs, increases customer lifetime value, and boosts profitability.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Loyal customers are more likely to make repeat purchases, refer others, and provide valuable feedback. This supports sustained business growth and delivers a strong competitive advantage. Retaining customers often costs less than acquiring new ones.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is customer retention rate (CRR)? It\u2019s a measure of how well you keep your customers over time. It\u2019s an important indicator of the health of your business and a vital number to keep track of. It\u2019s tempting to put a lot of time and effort into finding new customers. But the reality is that, &#8230;<\/p>\n","protected":false},"author":29,"featured_media":56710,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17901],"tags":[818,17937,17938,17939],"class_list":["post-40836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-leadership","tag-customer-retention","tag-customer-retention-rate","tag-how-to-calculate-customer-retention-rate","tag-retention-rate"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.3 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How To Measure and Improve Your Customer Retention Rate<\/title>\n<meta name=\"description\" content=\"Learn how to calculate and improve your customer retention rate with RingCentral&#039;s contact center solutions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-retention-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to calculate and improve your customer retention rate\" \/>\n<meta property=\"og:description\" content=\"Learn how to calculate and improve your customer retention rate with RingCentral&#039;s contact center solutions.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/customer-retention-rate\/\" \/>\n<meta property=\"og:site_name\" content=\"RingCentral Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ringcentral\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-24T07:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-13T13:18:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/wp-content\/uploads\/2020\/07\/GettyImages-1215890708-1-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2048\" \/>\n\t<meta property=\"og:image:height\" content=\"1366\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"RingCentral Team\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ringcentral\" \/>\n<meta name=\"twitter:site\" content=\"@ringcentral\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"RingCentral Team\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"13 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/customer-retention-rate\/#article\",\"isPartOf\":{\"@id\":\"\/us\/en\/blog\/customer-retention-rate\/\"},\"author\":{\"name\":\"RingCentral Team\",\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/#\/schema\/person\/65a168321317ffd562e0d77745f1b358\"},\"headline\":\"How to calculate and improve your customer retention rate\",\"datePublished\":\"2024-06-24T07:00:00+00:00\",\"dateModified\":\"2025-03-13T13:18:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"\/us\/en\/blog\/customer-retention-rate\/\"},\"wordCount\":2511,\"publisher\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/newrcblog.wpengine.com\/us\/en\/blog\/customer-retention-rate\/#primaryimage\"},\"thumbnailUrl\":\"\/us\/en\/blog\/wp-content\/uploads\/2020\/07\/GettyImages-1215890708-1-scaled.jpg\",\"keywords\":[\"customer retention\",\"customer retention rate\",\"how to calculate customer retention rate\",\"retention rate\"],\"articleSection\":[\"Business &amp; 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