We are delighted to announce that we have been awarded a Silver award for 2018 by the Bournemouth Chamber of Trade & Commerce Corporate Social Responsibility Accreditation Scheme. We were awarded the Silver award at the Chamber’s BH Banter event on Monday evening in recognition of our voluntary support for charities and SMEs in Bournemouth.
You too could sign up and be recognised by the scheme that is designed for businesses to encourage their support for charities, employees and local businesses. Find out more by visiting the Chamber’s CSR blog.
Success is the result of good judgement, which is the result of experience, experience is often the result of bad judgement. – Tony Robbins
Do you know what you spend on gaining new customers compared to keeping the customers that you already have? How effective are you at keeping your current customers? With all of the time, resources, and money put into acquiring customers it is important to know that your efforts aren’t wasted when customers don’t remain loyal.
Your customer retention rate is a great way to measure how successfully you are maintaining customer relationships. On a more granular level, you also need to know which types of customer you are remaining loyal and at which point in the relationship a customer leaves, so that you can make the necessary adjustments.
According to a recent study by social media marketing software provider, Flowtown, they found that maintaining existing customers costs six to seven times less than acquiring new customers. A study by Bain and Company reported that increasing your customer retention rates by just five percent led to an increase in profits between 25 and 95 percent.
Calculating your customer retention rates
The first thing you need to do to calculate your retention rate is identify the specific period of time you’re focusing on. Perhaps you’re looking at the last year or maybe the last six months.
Next, you need to know how many customers you had at the end of that period of time. If you’re calculating a current retention rate at the end of the period during which you’d like to measure, it might be as easy as determining how many customers you currently have. This number is represented by CE in the formula.
You also need to know how many new customers were acquired during the period of interest, so that you don’t include them as retained customers in your final retention measurement. This number is represented by CN in the formula. Now you’re ready to do your first calculation: subtract your CN number (new customers acquired during the period) from your CE number (number of customers at the end of the period).
The final number you need to know is how many customers you had at the start of your period of interest. This number is CS in the formula. For your next calculation, you will take the solution to Step 3 (CE-CN) and divide it by how many customers you had at the start of your period (CS). This covers the first part of the equation: ((CE-CN)/CS)
Finally, you want to turn that number into a percentage by multiplying it by 100. Your final number is your customer retention rate for your period of interest. ((CE-CN)/CS)) x 100.
Based on an article by on the socious community blog.
Sounds simple but identify your customers who drive the most profit for your business. Rank them and understand how impactful they are as individuals or as a segment for your business.
Ranking these customers from highest to lowest by Profit or Life Time Value lets you see which individuals or groups drive an outsized portion of your business results. When you can look at a single list and see your main customers you have the power to identify the unique characteristics of this group and work hard to attract more. Is it who they are, where they live, or what they buy?
Knowing that answer can be more valuable than just making the sale. By focusing your customer service, marketing, promotions, and sales offers, you can build the long-term value with these customers and find more existing and new customers who share the same characteristics.
Do you have a good balance of returning vs new customers? How well you are maintaining your customer relationships over time? How much do new customers compared to your returning customer spend with you?
The returning vs new customer metric can help you to compare the value an average new customer brings to your business vs a returning customer over the lifetime of your relationship. It’s worth considering with this metric the costs associated of attracting new customers compared to that of existing customers.
Use this metric to monitor the split over time or see how the business generated between the two groups varies over time. It can be an early indication of longer term customers views towards your organisation and their likely purchase intentions. For a product that supports repeat customers more so than one-time buyers, this can be the difference between struggling and thriving business.