Top 3 Benefits of Tracking Customer Retention

If you’re using a recurring revenue model you better be tracking retention! Here are 3 reasons why.

Retention is the number of clients or customers you can retain year-after-year, month-after-month. This model is great to provide you predictable, steady business income.

So what happens when people cancel on you? Do you know how long you are retaining your customers or clients for, on average? If you don’t know off the top of your head, start calculating it now! You should be using this as another business health check to ensure your trending the right way. If your retention is growing then so is your business.

Let’s take a look at a quick example:

Let’s say you have 100 clients at the beginning of the month. Of those 100 customers, only 80 have decided to stay with your business. That gives you an 80% retention rate.

One thing you can also do is look at different cohorts. You can look at granular levels at Month 1, Month 2, Month 3, etc., and see specifically where your customers tend to drop off at. This is incredibly interesting because it gives you a ton more insight. Maybe your business has seasonality to it. Look at bookkeeping or accounting - around tax time is crazy as a lot of businesses need help. Directly after tax time, your retention rate will decrease because businesses may no longer see value in your services until the following year.

Using retention, you can look at your users in a much more granular way and look for trends you wouldn’t be able to see at a higher-level analysis. So PLEASE make sure this is one metric you are tracking!


0:00 - 0:27 Definition of customer Retention
0:27- 0:05 Benefit 1
0:06 - 0:50 Benefit 2
0:51 - 2:15 Benefit 3


#customerretention #KPI #Businesstips



#smallbusinesses #smallbusinessowners #smallbusinessmarketing #businessefficiency #businessautomation #businessstrategy #businessowner #businessadvice #businessgrowth #businessgoals #customerhappiness #lifetimevalue