Customer Retention Rate: Calculate and Boost CRR with NetHunt CRM

Originally published January 24, 2025, updated February 05, 2025

Learn how to boost customer retention rate with the NetHunt CRM.

Sales teams are all about winning deals. Every conversion is a cause for celebration. So it’s no wonder no one pays attention when the customer leaves after paying the bills. After all, you can always get more clients. But at some point, you can lose more customers than you gain, draining your profit and making your business model unsustainable.

Of course, getting to that point takes a lot of time and mistakes. Better yet, you can prevent such problems by improving customer service with an effective CRM tool like NetHunt CRM.

But first things first, let’s go over the definition and how to calculate the customer retention rate.

What is customer retention in CRM?

Customer retention rate (CRR) shows how many customers remain with you after a certain period. It’s the opposite metric of customer churn.

What formula is used to determine a company's customer retention rate? It’s simple:

CRR=(CE-CN)/CS *100

• CE is the number of customers at the end of the reporting period (month or year)
• CN is the number of new customers you’ve gained within this period
• CS is the number of your customers at the beginning of the reporting period

If math isn’t your strongest suit, let’s look at an example using this customer retention rate formula. Suppose at the start of 2024, you had 500 customers. That’s your CS. On December 31, 2024, you have 600 customers, that’s your CE. And in 12 months, you gained 200 new customers. That’s your CN. If we now put these numbers into our formula, we’ll get the customer retention rate (CRR):

CRR=(600-200)/500*100=80%.

This number shows that only eight out of ten customers remained with you throughout the year. As you lost 100 existing clients, your churn rate is 20%.

Is that good or bad? Ideally, you want your customer base to grow without losing a single client. That’s why all businesses hope for a CRR of 100%. But it’s unrealistic.

In the worst-case scenario, if your churn rate is 100% and your retention rate is 0%, you’ll lose every customer you spend so much time converting. This will lead to huge operational costs and is not sustainable in the long run.

If you’re looking for a benchmark, anything above 85% is pretty good. And if you manage a customer retention rate over 90%, you’re doing great!

Why are customer retention rates important?

So what if you lose customers as long as you get more new ones to replace them? Retaining customers means your product and services are good, and your relationship and image are strong. Besides, a high retention rate raises your revenue because:

• Getting new customers is too expensive; keeping existing ones is cheaper. Even if you try to keep your customer acquisition costs low, marketing and sales efforts cost much more than ensuring a good customer experience for the clients who already know you and your product.
• Returning customers bring in more revenue. Their lifetime value is higher because they are more likely to buy again or purchase additional services and extras. Their conversion rate is over 60%, while it’s rarely above 5% for new leads.
• Satisfied customers become brand ambassadors. If they are happy with your product and service, they’ll refer others even without extra incentives. And these types of referrals will also have a higher-than-average conversion rate.

Ready to reap all these benefits? Consider using NetHunt CRM for customer retention!

How CRM helps in customer retention: NetHunt CRM

Customer is the keyword here. Customer retention is a function of the customer relationship, which you can enhance with a customer relationship management (CRM) system.

So, how does CRM help retain customers? NetHunt CRM takes over every stage of your client relationship, from collecting their details through web forms or social media to scheduling calls and follow-up emails. Let us introduce you to the NetHunt CRM features guaranteed to increase customer retention rate.

Centralized customer data management

You can only make your clients happy if you understand them. And the more customers you have, the harder it gets. NetHunt CRM helps you manage thousands (or millions) of client entries and enriches them with communication timelines and other available data to give you a 360-degree view of their needs.

Besides, NetHunt is all about eliminating routine tasks and minimizing human error. New entries will automatically appear in your database, along with all relevant and required details. As a bonus, you won’t have to clean up duplicates.

Automated follow-ups

Why should you bother with the customer once you get their money? If you want them to return for more, you must support a working relationship even after winning the deal.

With NetHunt CRM customer retention tools, you’ll never forget a follow-up. Our automated workflows let you establish complex routines before and after you close the deal.

For instance, you can send a confirmation email immediately after purchase and schedule an educational newsletter to arrive in your customers’ inbox daily to introduce them to your product features or to teach them how to use it properly. The goal is not to overwhelm the client with messages but to keep in touch to show you care.

Segmented and personalized campaigns

Personalization isn’t just a buzzword in CRM and customer retention. It’s what customers expect, thanks to Amazon, Netflix, and social media, which tailor recommendations to their preferences. They’ll appreciate personalization and helpful info instead of stock email marketing and sales pitches.

With NetHunt CRM, you can use contact details and tags to segment your customer database. Use their location, age, position, or activity to tailor your narratives and communication. You can save as many views as you want and run A/B testing to identify the most effective messages for each target group. They’ll reward your efforts with brand loyalty and referrals.

Customer support tracking

With NetHunt CRM, you can monitor and manage customer support tickets. Assess how quickly the client queries are addressed and evaluate their satisfaction with the support experience. Moreover, NetHunt CRM enables seamless collaboration between marketing, sales, and support teams, meaning they can align their efforts to generate and capture more leads while delivering quality CX.

Ultra-customizable pipelines

Marketing and lead nurturing pipelines drive conversions. But to boost customer retention you need to work out extra pipelines for different customer journey stages. For example, an onboarding pipeline can take a new customer from first purchase to mastering your product and become an ambassador.

An upselling pipeline will prompt a client to purchase add-ons or extras. It’s also a good idea to set up a separate pipeline to convince customers to return after they cancel their trial period or let their membership run out.

With customer retention CRM like NetHunt, you can customize and establish multiple pipelines to visualize the status of all existing deals, identify the weaknesses that lower customer retention, and adjust your processes accordingly.

Multiple native integrations

NetHunt CRM integrations are a win-win. Thanks to direct integrations with LinkedIn, Instagram, Telegram, and WhatsApp, all your chats will be automatically saved and visible in the customer timeline.

This complete history of communication is invaluable for delivering outstanding customer service, improving response time, and support ticket resolution.

No more switching between tabs or missing messages — they’ll all be connected to your contact entries in one tab. So every member of your team will have full access to chat history and provide top experience.

CRM retention strategies and mistakes to avoid

If our customer retention formula returns poor results, don’t make rash decisions. First, you need to understand what went wrong. Start with the factors that affect the CRR most, such as:

• Insufficient personalization. Your clients receive dozens of messages and ignore most of them because they are either useless or untimely. To ensure most of your emails hit home, segment your user base and develop unique training or marketing email campaigns for each segment. Moreover, if you notice individual customers falling through the cracks, analyzing their cases and crafting personal messages may turn their cases around.
• Low customer engagement. If you leave clients to deal with their new purchases alone, they’ll feel annoyed and abandoned. While you shouldn’t shower them with half a dozen emails per day, keeping in touch is critical for building long-term relationships. Besides, automated drip campaigns make it easy.
• Poor customer service. There’s nothing clients hate more than waiting for hours before getting a canned response. To make them happy, shorten the response time and customize answers to their unique queries. NetHunt CRM can route all communications through a single platform and store all contact data and interaction history.
• Sporadic CX decision-making. If you wait for customers to start leaving, you’re too late. Ideally, you should have an ongoing customer feedback analysis routine. Regular reports and reviews of customer retention in CRM should highlight the biggest issues to help you address them before customer churn affects the bottom line.
• Over-automating communication. Over-relying on automated messages can make interactions feel impersonal and turn clients away. To develop stronger customer connections, balance automated messages with human communication.
• Ignoring negative feedback. Ignoring complaints or negative reviews harms customer loyalty and brand reputation. Use NetHunt CRM to gain valuable insights into customer issues. Addressing them promptly shows your commitment to customer satisfaction.

Worst of all, clients may regret buying because they don’t see the value in your product. But even this problem stems from poor communication and relationship management. Resolving it should start with customer retention through CRM.

Boost customer retention: Best practices

We’ve covered many aspects of customer retention, but there are always ways to improve it further with a CRM strategy for customer retention, such as:

• Collect customer feedback. It’s the best way to improve your product and service. You cannot address every complaint, but you can uncover and resolve the biggest issues. Your client will appreciate the effort and will stay with you longer. Besides, with NetHunt CRM, you don’t have to compel customers to fill out complex forms. They can send you emails or texts you’ll store and analyze in your CRM database.
• Proactive support. Instead of waiting for the clients to bring their concerns and issues to you, develop a customer success mindset and help clients get the most out of your product or service. For example, an educational email campaign upon purchase and personalized follow-ups addressing individual issues help prevent customer dissatisfaction and churn.
• Establish a loyalty program. Discounts, referral programs, exclusive access, and materials are all great incentives for customers to keep using your products. You can use a CRM to analyze their past purchases and feedback, segment them, and offer personalized offers best suited for different groups.
• Offer omnichannel support. Do not limit the customers to a single way to contact you. Let them reach your support team through any comfortable means, such as social media, email, or hotline. With CRM, your managers can pick up and continue conversations across multiple channels without missing a beat. And customers will appreciate it.

Of course, there are a dozen other CRM retention strategies, but these offer the highest returns in the shortest time, and you can implement all three with NetHunt CRM.

Conclusion

It’s easy to calculate the customer retention rate, but keeping it above 85% or 90% is hard. Still, high CRR is vital for long-term business success, as returning clients are more likely to convert and cost less than generating new leads. Besides, loyal customers translate into upsells, referrals, and a solid brand image.

Luckily, it’s easy to implement all your customer retention strategies in CRM. With NetHunt CRM, you can enhance customer experience, shorten the response time, and ensure timely personalized follow-ups. Moreover, data-driven decision-making will help you develop and implement a cohesive retention strategy.

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