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Key Performance Indicators (KPI) by Bernard Marr

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24

Customer turnover rate

Strategic perspective

Customer perspective

Key performance question this indicator helps to answer

How well are we retaining customers?

Why is this indicator important?

Empirically based research has long since proven that the cost of acquiring a new customer is significantly higher than the cost of retaining an existing one. Therefore organisations typically expend great efforts on ‘satisfying’ their existing customers so to increase their likelihood of loyalty and, amongst other benefits, remove expensive replacement costs (see also the customer satisfaction index KPI (on page 97).

Customer turnover (also known as customer churn, customer defection or customer attrition) is a popular KPI used to track the loss ...

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