Dependence on the maturity of the company

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The customer retention rate is the percentage of customers who remain loyal for a certain period. Simply put, if a business has attracted 200 customers at the beginning of the year and 197 of them remain by the end of the year, the CRR will be 97.5%. This is a fictitious example, and 97.5% is a good indicator. To achieve this, you need to offer your audience a truly high-quality and vp facility manager email list useful product, take care of good service, maintain loyalty and stimulate customer activity.

The indicator is also affected by the industry and competitive environment.

Average indicators


For clarity, here are some examples of average customer retention rates in different industries. The highest rate is in energy and utilities — 89%, followed by the software industry — 86%. And the lowest rate — 44% — is in wholesale trade. This is primarily due to the fact that consumers are faced with a wide choice. High competition, supply disruptions, a shortage of experienced specialists, and easy access to suppliers make customer loyalty a difficult task.




It is also worth noting that at the initial stages of a business, customer retention is usually low. As the company grows and optimizes the product to meet market needs, the retention rate increases.

For companies with annual revenues of $3 million to $8 million, it is 80.4%. When revenue reaches $15 million to $30 million, the retention rate increases to 84.2%.

Startups with revenues under $1 million have a wide range of customer retention rates. This is because few companies achieve sufficient product-market-customer fit in the early stages. As the product improves, demand increases, and the startup's revenue grows, this range narrows.

Why Calculate Customer Retention Rate
It is profitable. If one new client costs the same money as retaining 5-6 existing ones, then it is more profitable to work in both directions. And understanding the Retention Rate helps to optimize and redirect expenses to marketing and advertising campaigns.



Satisfied customers try new products of the company because they trust them and are willing to spend more on them. Loyal users become brand advocates, recommending it to their circle of friends, bringing in new customers.