Something about retention

For everything you do as a vendor, from contracting to delivery to ongoing customer management, it’s important to make sure your customers want to stay with you.
In many ways, this is the kind of culture that needs to be fostered in all parts of your managed business.
With a strong foundation of customer retention and upsell, you can greatly reduce the risk of your managed business and continue to sell new customers and meet their expectations for future success.
In addition to customer satisfaction metrics, it is important to track several other key indicators of customer management.
One is related to retention.
You want to express your revenue retention rate as a percentage.
When you start a certain amount of business in a given year, what percentage of
This is the baseline for the metric.
In other words, if you had $20 million in revenue in the previous year.
From your set of accounts at that point, let’s say your business had $20 million in annual revenue the previous year.
The following year, let’s say you generated a total of $19 million in revenue from those accounts.
Then you would have achieved a 95% revenue retention rate.
Rather than calculating your renewals based on the number of customers, you want to choose this method.
Revenue retention is four times as important in retaining $20,000 customers per month as it is in retaining $5,000 customers per month.
And what kind of revenue retention should you be looking for?
The goal is above 90%; if you’re in the 94-96% range, you’re doing very well; in the low 90s is fine, but you need to watch carefully.
Anything below 90% is a big problem.
Service contracts are usually for two to three years, but they should last for a generation.

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