Did you ever stop and consider that it's always cheaper tothan to acquire new ones? It's darnand companies can invest a lot of their revenue on marketing and sales efforts without realizing how impactful similar investments can be in retaining the customers you already have.
That's why it's critical for your business to keep an eye on whether you've sprung any leaks in your revenue bucket, losing some of those hard-won clients, and take action to fix them.
The best companies have customer retention rates of over 90 percent--which means they only lose less than 10 percent of their customers on an annual basis. When it comes to retention, any percentage that starts with a 9 is a good number. If you are good, you keep all your clients and grow them for retention rates over 100 percent. Businesses with retention rates of 50 to 60 percent, on the other hand, have sprung serious leaks in their revenue buckets. I worked with the leader of one software organization, for example, who found that his retention rate was just 68 percent. The company's customers just didn't stay around for long--which is a serious challenge in trying to grow a business.
