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Calculating customer defection and customer retention rates

Learn how calculating customer defection rates and customer retention can vary by organization or industry in this expert tip.

What is the best way for marketers to calculate customer retention and customer defection rates?
There are no hard and fast rules on calculating customer defection and customer retention. Some companies have long-term arrangements with customers, who have to provide advance notice of their intended departure. Also, some industries have limited alternative supplier availability, making the retained customer actually 'trapped.' Some other industries such as retail would always need to identify levels of customer loyalty and risk -- and the contributors to both -- through targeted research, because the level of alternative supplier availability is high.
This was last published in April 2007

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