Customer Retention Rate (CRR): A metric used to measure the percentage of existing customers who continue to do business with a company over a specific period of time. It is an indicator of customer loyalty and satisfaction.
Calculation: CRR is calculated using the formula: CRR = ((E-N)/S) x 100, where E is the number of customers at the end of the period, N is the number of new customers acquired during the period, and S is the number of customers at the start of the period.
Importance: A high customer retention rate suggests that a company is successful in maintaining its customer base, reducing churn, and fostering long-term relationships. It often leads to increased profitability, as retaining existing customers is generally more cost-effective than acquiring new ones.
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