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Why you need to know: If your business lets old customers leave as you bring in new ones, then you are not building a stable company. Your goal should be to increase both new and repeat customers.
Where to find this answer: Track individual customer revenue year to year, and monitor how it changes.
This will depend on the type of industry or product.
1. Normally, people go the same dentist or lawyer every time for a fairly long period of time.
2. On the other hand, the young generation would like to have snacks or dinner in different branded outlets by rotation but they like all.
3. In consumer goods market, people prefer same brand of butter or cheese or bread as long as it is available in the super market. However, the people will swiftly change to other brands which provide better taste or value.
4. So, if a customer buys an item for fairly long period of time (say one year) he/she should be included in figure. And above 60% of customers like this would be good customer retention rate
Thanks ... we deal with different investors from many countries that we must to retention our clents by introduced many services and satisfites thier wonts by good , quality services
Customer retention ratio depends upon many factor and it increase/decline when customer satisfaction is not fulfilled.
Customer retention ratio will be high when the product/services offered by the company is as per the requirements of the customer. But it will decline when the company does not or reduces their concentration form customers to something else (price,compromise on quality, etc)
Eg: A cloth manufacturing company was manufacturing 100% cotton shirts which were very much liked by the customer. But later company started compromising on the quality by dding polyester, because of this change by the management the customer were not satisfied and hence company started seeing decline in customer retention ratio.
Confidential information, sorry not help with my answer. :)
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