Customer retention rate calculator
How many of last year's customers hired you again? Enter three numbers to see your retention rate and what it is worth.
How to calculate customer retention rate in 3 steps
Count the customers you served in a period. A year suits most home service companies. Count households, not jobs.
Count how many of them hired you again in the next period. Leave out new customers, because they did not exist at the start.
Divide the second number by the first, then multiply by 100. If you served 400 customers and 80 came back, your retention rate is 80 ÷ 400 × 100, which is 20 percent.
The formula
Customer retention rate = (customers who came back ÷ customers at the start) × 100
The longer textbook version, ((customers at the end − new customers) ÷ customers at the start) × 100, gives the same answer when you count the returning customers directly.
5 ways to bring more customers back
- Ask for a review after every job, so the customer remembers your name.
- Give customers a reason to refer a friend, with a reward for them and an offer for the friend.
- Leave something in the home with your number on it, such as a fridge magnet.
- Remind customers when the next visit is due, such as a tune-up or a yearly check.
- Follow up on every referral quickly, so the friend becomes a customer too.