As a business owner, you have a lot on your plate. For this reason, customer attrition rate may be something you are overlooking.
Customer attrition is nothing more than the loss of clients or customers, and is also known as customer turnover, customer churn, and customer defection.
Now that you know the definition of customer attrition, it is time to answer a very important question: why does it matter?
There are many reasons why you need to track your customer attrition rate, month in and month out. Here are three benefits of doing so:
- You are able to keep a beat on how much business you are losing
- When you know how much business you are losing you can determine how many new sales you have to make to keep up with these losses
- When you know your customer attrition rate you will also know your customer retention rate
It goes without saying that the lower your customer attrition the more business you are keeping in the pipeline. Subsequently, your sales and revenue are going to remain high.
Think about it this way: if you can keep your customer attrition to a minimum, while constantly bringing on new business, it is only natural that your revenue is going to increase.
Tracking customer attrition may sound like a challenging task, but with an organized approach it can be done quite simply.
Your strategy for tracking attrition will be based primarily on your business type. For example, it is easier for public relations firms to track this metric than retail stores. However, there are ways around any challenge that may come your way.
For a service based business, such as a public relations firm, all you need is a list of active clients. From there, you will track clients that leave your firm while also adding new ones as contracts are secured.
Now do you see why it is so important to track customer attrition? This really does matter to the future success of your business.