How robust are your customer success and revenue retention programs? How do you know if you are improving or falling behind your revenue targets? If you’re not collecting the data and tracking the trends then you’re only guessing. The challenge is measuring the areas that move the needle. Here are 12 key customer retention metrics that keep your revenue retention initiatives on track and drive greater revenue growth.
Customer Renewal Opportunity Metrics
- Total Opportunity Amount – The total potential contract value that can be renewed in a given period.
- Adds Ratio – The proportion of renewals from unexpected sources.
Customer Retention Metrics
- In-Quarter Renewal Rate – The percentage of opportunity expiring in the current quarter.
- Final Renewal Rate – The percentage of the opportunity expiring in that quarter that is closed.
Sales Process Effectiveness Metrics
- Contact Days in Advance – The average number of days in advance of contract expiration that your sales team is contacting end users.
- Sales Cycle Length – How many days, on average, it takes for customers to renew their contract.
- Contracts Renewed Before Expiration – The percentage of contracts being renewed on or before expiration.
Revenue Lifecycle Performance Driver Metrics
- Resolution Rate – The percentage of opportunity where the sales cycle has been definitively completed.
- Close Rate – The percentage of customers who accept the value proposition and agree to renew.
- Conversion Rate – The difference between the booked value of closed contracts and their original estimated value.
Customer Success Feedback Metrics
- Conversion Reason Codes – A set of driving forces in the transaction value of a successful renewal.
- Cancellation Reason Codes – A set of reasons why customers decided not to renew their contracts agreement.
The true value of these customer retention metrics is no different than any other company metrics. They should be reported regularly and the trends tracked and published. You should also set company goals for each metric. Every company interested in maximizing their customer success need to be constantly striving to meet company targets.
To learn more about each metric you can download the whitepaper.