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9 Customer Retention KPIs You Need to Track

9 Customer Retention KPIs You Need to Track

Customer retention is the key to any successful business. By keeping your customers coming back, you can increase your profits, grow your market share, and build a loyal customer base. There are a number of key customer retention metrics for measuring customer retention, including customer churn rate, customer lifetime value, and net promoter score. By delving into the realm of customer retention KPIs, you gain insights that go beyond mere numbers, revealing the health of your customer relationships and the efficacy of your retention strategies. In this article, we will uncover the nine essential customer retention KPIs that serve as the compass to steer your business toward lasting success and cultivate a devoted customer base.

Top 9 Customer Retention KPIs

  1. Customer churn rate: This is the percentage of customers who stop doing business with you within a given period of time. It is a measure of how many customers you are losing. A high customer churn rate can be a sign of a problem with your business, such as poor customer service or a lack of innovation.
  2. Customer lifetime value (CLV): This is the average amount of money that a customer spends with your business over their lifetime. It is a measure of the value of your customers. A high CLV means that your customers are spending a lot of money with you, which is good for your business.
  3. Net promoter score (NPS): This is a measure of customer loyalty. It is calculated by asking customers how likely they are to recommend your business to a friend or colleague on a scale of 0 to 10. A high NPS means that your customers are very likely to recommend your business, which is good for your business.
  4. Repeat purchase rate: This is the percentage of customers who make repeat purchases from your business. It is a measure of how often your customers are coming back to you. A high repeat purchase rate means that your customers are satisfied with your products or services and are likely to continue doing business with you.
  5. Customer satisfaction score (CSAT): This is a measure of how satisfied customers are with your products or services. It is calculated by asking customers to rate their satisfaction on a scale of 1 to 5. A high CSAT score means that your customers are satisfied with your products or services.
  6. Customer effort score (CES): This is a measure of how easy it is for customers to do business with you. It is calculated by asking customers how much effort they had to put in to get what they wanted. A low CES score means that your customers found it easy to do business with you.
  7. Social media engagement: This is a measure of how active your customers are on social media. It is a measure of how engaged your customers are with your brand. A high social media engagement means that your customers are interested in what you have to say and are likely to be loyal to your brand.
  8. Customer feedback: This is the feedback that customers give you about your products or services. It can be collected through surveys, focus groups, or customer reviews. Customer feedback can be used to improve your products or services and make your customers happier.
  9. Customer churn analysis: This is the analysis of why customers stop doing business with you. It can be done by looking at the reasons that customers give for churning, as well as by analyzing your customer data to identify patterns. Customer churn analysis can help you identify areas where you can improve your business to prevent customers from churning.

How to Use Customer Retention KPIs

  1. Choose the right KPIs: Not all customer retention KPIs are created equal. Some KPIs are more important than others, depending on your business. For example, if you sell high-ticket items, customer lifetime value (CLV) is a very important KPI. If you sell low-ticket items, customer churn rate may be more important.
  2. Track your KPIs over time: It's important to track your KPIs over time so you can see how they are performing. This will help you identify trends and areas where you can improve.
  3. Compare your KPIs to industry benchmarks: There are industry benchmarks for most customer retention KPIs. By comparing your KPIs to these benchmarks, you can see how you are doing compared to other businesses in your industry.
  4. Set goals for your KPIs: Once you know how your KPIs are performing, you can set goals for them. This will help you focus your efforts on improving your customer retention.
  5. Use your KPIs to identify areas where you can improve: By tracking your KPIs, you can identify areas where you can improve your customer retention using an customer retention software. For example, if your customer churn rate is high, you may need to improve your customer service.
  6. Take action to improve your KPIs: Once you have identified areas where you can improve, you need to take action. This may involve making changes to your products or services, your marketing strategy, or your customer service.
  7. Be patient: It takes time to improve your customer retention by implementing customer retention management software. Don't expect to see results overnight. Just keep tracking your KPIs and making improvements, and you will eventually see results.

Here are some additional tips:

  • Involve your team: Get your team involved in tracking and improving your customer retention KPIs. This will help them understand the importance of customer retention model and make them more motivated to help you improve your KPIs.
  • Use data analytics: Data analytics can be a powerful tool for understanding KPIs for customer retention. By using data analytics, you can identify trends and patterns that may not be obvious.
  • Be proactive: Don't wait for customers to churn before you take action. Proactively reach out to customers who are at risk of churning and offer them incentives to stay.
  • Personalize your communications: Customers appreciate being treated like individuals. Personalize your communications with customers to make them feel special.
  • Make it easy for customers to do business with you: Make it as easy as possible for customers to do business with you. This includes having a clear and easy-to-use website, offering multiple ways to contact customer service, and having a quick and efficient returns policy.

How to Improve Customer Retention using AI?

Personalization: AI can be used to personalize customer experiences, such as by recommending products or services that are likely to be of interest to each individual customer. This can help to make customers feel valued and appreciated, which can lead to increased loyalty.

Predictive analytics: AI can be used to predict which customers are at risk of churning, so that businesses can take action to prevent them from leaving. This could involve offering discounts, providing special offers, or simply reaching out to customers to see if there is anything that the business can do to improve their experience by going through customer retention analytics.

Automated customer service: AI can be used to automate customer service tasks, such as answering FAQs or resolving simple issues. This can free up human customer service representatives to focus on more complex tasks, such as providing personalized support to customers.

Chatbots: AI chatbots can be used to provide 24/7 customer support, even when human customer service representatives are not available. Chatbots can also be used to collect customer feedback, which can be used to improve products and services.

customer retention software

Manifest AI is a platform that uses AI to help businesses improve their customer retention. Manifest AI can be used to:

  • Personalize customer experiences
  • Predict which customers are at risk of churning
  • Automate customer service tasks
  • Create chatbots
  • Collect customer feedback
  • Solves customer queries related to their purchase by providing multilingual support

By using Manifest AI, businesses can improve their customer retention and grow their bottom line on a affordable customer retention cost.


As you navigate the intricate landscape of customer retention, remember that success goes beyond the acquisition of new customers. It thrives in the loyalty and satisfaction of those who have chosen your brand. The nine customer retention KPIs we've explored offer more than mere data—they are the pulse of your customer relationships. By tracking these indicators, you unveil a roadmap to refine your ecommerce growth strategies, strengthen your bonds, and ultimately create an ecosystem where customers not only stay, but thrive. In an era where every interaction counts, these KPIs empower you to sculpt experiences that resonate, fostering a brand that customers willingly call their own.

Check below the most frequent asked question related to customer retention

What is a customer retention KPI formula?

Customer Retention Rate (CRR) formula: [(E-N)/S] x 100, where E = number of customers at the end of a period, N = number of new customers acquired during the period, and S = number of customers at the start of the period. High CRR signifies strong customer loyalty and retention.

How to improve customer retention rate?

Improve customer retention through excellent service, loyalty programs, personalized communication, feedback, and consistent quality.

What is the relationship between customer retention and clv?

Customer retention and Customer Lifetime Value (CLV) are closely linked. Retaining customers over a longer period increases their CLV as they continue to generate revenue. CLV, in turn, helps prioritize retention efforts, as customers with higher CLVs are more valuable. Focusing on customer retention strategies can lead to increased CLV, making it a vital metric for long-term business success.