Calculate customer retention rate to measure business success
Customer retention rate is a key metric that measures the percentage of customers retained over a given period. It's crucial for businesses to understand their customer retention rate as it directly impacts their revenue and growth.
A high customer retention rate indicates that a company is successful in maintaining a strong relationship with its customers, while a low rate may suggest issues with customer satisfaction or service quality.
To calculate customer retention rate, you need to know the number of customers at the start and end of a period, as well as the number of new customers acquired during that period.
| Period | Customers at Start | Customers at End | New Customers | Retention Rate |
|---|---|---|---|---|
| Q1 | 1000 | 900 | 200 | 70% |