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Customer Retention Rate
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What is customer retention rate
Customer Retention Rate tracks how many customers continue doing business with your company over a specific period. It reflects loyalty and long-term value.
Impact of customer retention rate in customer support
Retention is key to sustainable growth. It's more cost-effective to retain customers than acquire new ones, and support quality plays a critical role. Great experiences boost retention; bad support causes churn. Retention also reflects how well product, onboarding, and service align with customer needs.
Formula + Example/Use Case
Formula:
((Customers at end of period – New customers during period) ÷ Customers at start of period) × 100
Example:
If you start the quarter with 1,000 customers, gain 200 new ones, and end with 1,050, your retention rate = ((1,050 - 200) ÷ 1,000) × 100 = 85%. If 90% of customers who received proactive support renew, it shows support’s direct impact.
What affects customer retention rate
- Support experience quality: Polite, fast, and accurate service encourages customers to stay.
- Resolution effectiveness: Customers who get their issues fixed quickly are more likely to stick around.
- Proactive communication: Checking in post-resolution or anticipating issues improves trust.
- Product usability: A hard-to-use product leads to more support—and more churn if it’s unresolved.
How to Improve customer retention rate
- Follow up on important tickets: Show customers you care beyond the issue itself.
- Offer personalized tips: Help customers get more out of your product.
- Monitor churn signals: Intervene when usage or sentiment drops.
Benefits
- Increases customer lifetime value: Long-term customers spend more and refer others.
- Reduces acquisition pressure: You don’t need to replace as many customers each cycle.
- Shows holistic support impact: Reinforces how good service fuels growth.