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Effective ways to measure customer retention


Small, medium-sized and big businesses face the challenge of customer retention. The scalability and success of every business depend on its customers. The importance of customer retention thus cannot be overemphasized.

In small business financing and starting up a small business, one must consider effective methods for measuring customer retention. This is an important element of customer service and business growth.

Customer retention can be influenced by the tiniest details as much as the bigger factors. As is commonly known, a satisfied customer will always come and sometimes with two or more referrals.

Below are some of the effective methods of measuring customer retention suggested by Fone Store.


Client referral and success is directly proportional to customer retention. Customers are constantly in need of service providers that meet all the needs. When they find them, they spread the word to friends and families unsolicited. That is definitely the best kind of advertisement any business needs.

Client success can be directly measured through sales and repeat sales. This gives an idea of how well a product or service is doing. Client success and retention can also be measured from customer feedback which can be done through email questionnaires. A happy customer will readily fill a questionnaire.

The net promoter score of a business is also an indication of the customer satisfaction and ultimately the customer retention. Net promoter score tools calculate customer satisfaction by comparing the clients with lower satisfaction score to those with a higher satisfaction score. In financing small businesses, provision should be made for net promoter score measurement.


The net churn of business shows the growth and revenue generation of the business. In effectively measuring customer retention, the net churn gives an idea of how happy the customers are with the services and products.

The ratio of cancellation to successful service delivery and product upgrades can also be gotten from the net churn measurement.

Customer upselling and repurchase ratio are also indicators of customer retention. Repurchase ratio measures the number of times a customer has made repeated purchases of a particular product while the upselling ratio measures how many purchases a customer has made, over a period, of different products and services.


It is common knowledge that businesses that deliver higher quality of products and service retain their customers easily. Customer retention can be measured through the quality of staff as well as the quality of products and services.

A business that makes dedicated efforts to maintain and increase quality deliveries is already one step ahead in customer retention. These efforts also include training team members and members of staff on the best customer relationship management techniques.

Customer retention is key for business growth and development especially with the competitive nature of the 21st-century business sphere. The retention of customers requires efforts from every department of a business. It is also important to note that clients do not seek unachievable demands, the simplest change can keep a customer and yield better revenues.

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