Customer retention is a company's ability to keep clients over time. Most companies measure only acquisition, even though, for services and repeat sales, it is retention that decides profit – acquiring a new customer is usually considerably more expensive than keeping an existing one, and a client's departure means the loss of their entire future value, not just a single invoice. Measure churn over consistent periods and supplement it with reasons for leaving found out through direct conversation, not guesswork. It is often a surprise: most commonly, people do not leave because of price or the quality of the work, but because of the feeling that nobody is taking care of them, and because of reporting on results that is hard to understand. Effective measures are therefore cheap – a regular review with the client, an understandable report, and a proactive flag of a problem before the client notices it themselves.
See also: Customer onboarding, NPS – Net Promoter Score, Referral programme.
