Customer Retention Cost (CRC) is the average expense a company incurs to retain an existing customer over a given period. It includes all costs spent on loyalty programs, customer success, account management, support, training, communication, and retention marketing campaigns.
CRC is calculated by dividing the total retention-related costs by the number of active customers retained during a given time period.
Decide the timeframe (monthly, quarterly, annually)
Identify retention-related costs
Calculate total retention spend by adding up all costs
Count the number of customers who stayed during the period
Divide total retention spend by the number of retained customers
CRC = Total Retention Costs ÷ Number of Customers Retained
There is no fixed benchmark for Customer Retention Cost; aim to lower it over time.
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CAC measures the cost to acquire new customers, while CRC measures the cost to retain existing customers.
Not necessarily. A reasonable CRC that leads to higher CLV and lower churn is more valuable than cutting retention costs.
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