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4 ways to calculate customer retention

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It’s important to measure what you’re trying to manage. There have been multiple opinions on which SaaS Metrics are important but the bottomline is still the same: revenue – what brings in the recurring profits? One of the biggest challenges that SaaS companies face is churn and they are constantly finding and improving on ways to increase retention. About 90% of your revenue comes from existing customers (see “3 steps to accelerate revenue from existing customers” presentation).

These 5 measurements will help you calculate customer retention in a more detailed manner:
1. Percentage of users who renew with you after their first 90 days (or first year)

2. Percentage of customers who renew with you each month (or each year)

3. Revenues from existing customers this year as compared to last year

4. Percentage of active users who renew their service

Remember there’s no such thing as a lost customer,  there are just inactive customers.

Guy Nirpaz

Guy Nirpaz is a Silicon Valley-based Israeli entrepreneur and CEO of Totango, a Customer Success software platform. A pioneer in the Customer Success field, Guy established the Customer Success Summit and is a well-regarded industry speaker and community contributor. Guy loves people and technology and has dedicated his career to improving the way in which business is done through innovation. Fun Facts: Guy moonlights as the lead guitarist in a rock band based out of his garage in Palo Alto and used to command a tank well as having grown oranges.

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