Do you calculate client retention rate?
As a Customer Advocate, you fight every day to strengthen and grow your customer relationships in a rapidly evolving landscape. More than ever, customers are mobile and powered by choice. Consequently, a satisfied customer no longer guarantees that you will have their business, as businesses seek to continuously reduce costs and increase profitability. Today, you must calculate client retention rate and sell continuously as “churn” take center stage in our business lexicon.
Every year we spend millions to generate revenue from new sales. We work tirelessly to chart out our investments like an offensive coordinator in football. Yet, after the sale we spend virtually nothing to calculate client retention rate and protect our investment . This loss or diminished client retention rate is a constant drain on your business. But, it doesn’t need to be that way.
From the moment you close the deal, the clock is ticking, and you need to think constantly about the things you need to do to maintain or increase the client retention rate. Make sure you track the following things when you calculate your client retention rate:
- Net Promoter Score. Net Promoter Score (NPS) is a relationship survey that scores and tracks what is described as “the ultimate question”: would your customers recommend you to others? If you do just one thing, this is it.
- Transactional surveys. Understand the individual touch points along the customer journey. Transactional surveys provide immediate and empirical evidence of those many points and ways in which you interact with your customer.
- Customer Communities. The power of social media is undeniable, but without a plan, the positive impact is left to chance. Whether it is a webinar, email, website, blog, forum, networking or purely social websites, have a plan to actively engage your customers to engineer a positive experience.
- User Adoption. Track overall customer user adoption to understand trends on product adoption and product user activity. This allows Account Representatives and Customer Success Managers to view user adoption at the individual account level, to take the temperature of a customer prior to calling on them for renewals, to sell more, or to ask them to be a reference or participate in a marketing event.
- Retention & Renewal (Churn). The gold standard of retention metrics is Monthly Recurring Revenue (MRR). MRR is your annuity business, and it should be tracked as a key performance indicator. Along with MRR, measure your renewal rate. Set a target renewal rate (i.e. 92%) and track with regularity and depth.
- Churn and down-sell analytics. Analyze customers that have stopped doing business with you, or that buy less, to understand trends and improve business processes for the desired customer experience. Organize, track key information, manage and access current and historical customer data.
With Gainsight, your business can leverage customer intelligence and automation to calculate client retention rates, reduce unexpected churn and identify upsell opportunities.
