30 Dec The Importance of Client Retention
Client retention is one of the most important overlooked aspects of heritage organizations. It can be demonstrated mathematically that retaining an existing client is far more valuable than winning a new client. You must track your retention rate.
The formula is easy, but most heritage organizations don’t do it correctly. Retention rate = clients at risk retained / clients at risk. What’s a client at risk? If you have finished all the work for a client in a given year (or another time period), they are at risk. If they hire you again the next year, then they are retained. If they don’t, they are lost.
If, in 2016, you finished work (all jobs and tasks) for 17 clients. These are now your at-risk clients for 2016. In 2017, you received new work from 5 of these 17 clients. Your 2017 retention rate would be 5/17 or 29.4 percent.
If you run a heritage attraction, like a museum or park, all of your prior month’s visitors are at-risk. Say that in December 2017 you had 1,136 visitors. If, in January 2018, 493 of these same visitors came back to revisit, your visitor retention rate for January would be 493/1,136 or 43.4 percent. The challenge for heritage attractions is that many don’t have a way of tracking individual visitors. They only have aggregate visitor counts. Of course, in our modern marketing era of tracking, there are ways of measuring the visitation of specific individuals.
Regardless of the type of heritage organization you operate, knowing your retention rate is one of the most important metrics you can track. Need more help with this? Download our FREE white paper that will walk you through the process.