Metrics that impact Retention Rate
Posted: Sat Feb 01, 2025 9:16 am
It is related to RR as follows. Only a client who is satisfied with the quality and service can return to the company for services or products. If this indicator exceeds 80%, then most respondents will recommend the company to their friends and acquaintances and will return more than once themselves. Consequently, the predicted RR will also be at a fairly high level.
To determine NPS, the company launches a call to old customers, who are asked to answer standard survey questions, such as "How likely are you to recommend us to your friends?" The proposed answers are reflected in the form of a scale from one to ten, where 1 means I definitely will not recommend, and 10 means I will definitely recommend. A neutral rating is considered to be 7.
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Repeat Purchase Rate – frequency of repeat purchases
This indicator reflects the number algeria email list of those clients in percentage terms who made more than one purchase in this company or used the services two or more times. It is very similar to the Retention Rate, but their main difference from each other is that they are calculated to analyze different situational moments when doing business.
Repeat Purchase Rate (RPR) Retention Rate (RR)
This indicator is important specifically for enterprises engaged in retail trade without automatic renewal of a purchase or service. In this case, the client independently performs the necessary actions for a repeat purchase. Relevant for calculation in SaaS and other subscription services, where the subscription or subscription is renewed automatically for the client. In this scenario, in order to refuse a repeat purchase, a person must perform certain actions.
It is noteworthy that the indicator directly depends on the industry in which the business is developing. For example, in a car dealership this indicator will be significantly lower than in a bakery.
The average figures for a successful company range from 20 to 40%.
Lifetime Value – the lifetime value of a client
An indicator that reflects the company's profit from interaction with the buyer throughout the entire acquaintance. Compared to RR, LVT shows which customers need to be retained. In other words, it shows the most important and favorite customers for the company.
Lifetime Value
Source: unsplash.com
When analyzing this indicator, you can easily compare the following amounts: how much money the organization spends on attracting new customers and retaining old ones with how much profit these customers bring in the end. The optimal value is three to one. In this case, the client brings the company three times more profit than the organization spent resources on marketing and advertising.
There are situations in which the average LVT indicator in a business is far from ideal, but the entrepreneur still remains in the black and receives high profits from interactions with regular customers.
To determine NPS, the company launches a call to old customers, who are asked to answer standard survey questions, such as "How likely are you to recommend us to your friends?" The proposed answers are reflected in the form of a scale from one to ten, where 1 means I definitely will not recommend, and 10 means I will definitely recommend. A neutral rating is considered to be 7.
Read also!
"Marketing Tips: How to Show That Your Product is the Best"
Read more
Repeat Purchase Rate – frequency of repeat purchases
This indicator reflects the number algeria email list of those clients in percentage terms who made more than one purchase in this company or used the services two or more times. It is very similar to the Retention Rate, but their main difference from each other is that they are calculated to analyze different situational moments when doing business.
Repeat Purchase Rate (RPR) Retention Rate (RR)
This indicator is important specifically for enterprises engaged in retail trade without automatic renewal of a purchase or service. In this case, the client independently performs the necessary actions for a repeat purchase. Relevant for calculation in SaaS and other subscription services, where the subscription or subscription is renewed automatically for the client. In this scenario, in order to refuse a repeat purchase, a person must perform certain actions.
It is noteworthy that the indicator directly depends on the industry in which the business is developing. For example, in a car dealership this indicator will be significantly lower than in a bakery.
The average figures for a successful company range from 20 to 40%.
Lifetime Value – the lifetime value of a client
An indicator that reflects the company's profit from interaction with the buyer throughout the entire acquaintance. Compared to RR, LVT shows which customers need to be retained. In other words, it shows the most important and favorite customers for the company.
Lifetime Value
Source: unsplash.com
When analyzing this indicator, you can easily compare the following amounts: how much money the organization spends on attracting new customers and retaining old ones with how much profit these customers bring in the end. The optimal value is three to one. In this case, the client brings the company three times more profit than the organization spent resources on marketing and advertising.
There are situations in which the average LVT indicator in a business is far from ideal, but the entrepreneur still remains in the black and receives high profits from interactions with regular customers.