Customer retention rate for all customers over the past three reporting periods

This measure calculates customer retention rate for all customers over the past three years. Customer retention rate is defined as the number of customers who were active three years ago and are still active, divided by the number of customers who were active three years ago. This Process Efficiency measure is intended to help companies minimize waste and refine resource consumption related to the function "Manage Customer Service".

Benchmark Data


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Measure Category:
Process Efficiency
Measure Id:
Total Sample Size:
3,846 All Companies
Key Performance

Compute this Measure

Units for this measure are percent.

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Customer retention rate over the past three years

Key Terms

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Process efficiency

Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.


The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (7.2.1)

  • 6.1 - Develop customer care/customer service strategy (10378) - Defining a plan that removes customer obstacles by gathering operational insight and competitive insight, as well as improving soft skills and forward resolution for employees. Develop customer segmentation. Define rules and regulations for customer service. Establish service levels for customers.
    • 6.1.1 - Define customer service requirements across the enterprise (20086) - Defining a set of behaviors, skills, and policies needed to provide customer service effectively across the enterprise.
    • 6.1.2 - Define customer service experience (20087) - Communicating to the customer service resources what is expected when engaging the customer. Relate service level expectations to the workforce. Ensure positive customer experience.
    • 6.1.3 - Define and manage customer service channel strategy (20088) - Establishing and refining procedures for customer service and technical support.
    • 6.1.4 - Define customer service policies and procedures (10382) - Outlining the framework of policies and methods for developing customer service strategy. Establish the rules and regulations that serve as a guideline for the customer service strategy. Take into account customer needs and behavior.
    • 6.1.5 - Establish target service level for each customer segment (10383) - Determining and implementing levels for customer services. Benchmark certain customer service practices, and base customer level services on those benchmarks. Create a service level agreement, which is a negotiated agreement designed to create a common understanding about services, priorities, and responsibilities.
    • 6.1.6 - Define warranty offering (20089) - Determining the exact terms and conditions under which specific warranties apply to certain goods or services.
      • - Determine and document warranty policies (16893) - Establishing warranty policies to assure customers that the company will guarantee its warranties that it issues.
      • - Create and manage warranty rules/claim codes for products (16890) - Establishing and maintaining claims processing and routing rules. Establish and maintain claims processing and routing rules for product warranties, coverage lists, repair, fault, trouble codes, repair time setup, and warranty policy registration. This also includes rolling out the codes and rules, and the improvements/updates to these rules and codes via systematic updates.
      • - Agree on warranty responsibilities with suppliers (20090) - Negotiating with manufacturers and dealers the obligations of each party in upholding warranties.
      • - Define warranty related offerings for customers (20091) - Informing customers about warranties that apply to promoted products or services.
      • - Communicate warranty policies and offerings (12673) - Communicating rules and updates via training manuals for new products and training resources.
    • 6.1.7 - Develop recall strategy (20092) - Establishing procedures to handle recalls of defective products.
  • 6.2 - Plan and manage customer service contacts (10379) - Planning and administering work force operations for customer service provision by taking care of customer services requests/inquiries, as well as the complaints.
    • 6.2.1 - Plan and manage customer service work force (10387) - Creating and administering the work force deployed for the customer service process. Forecast the customer work force needs to correctly schedule the work force. Track the utility of the work force deployed. Examine the interactions between the customer and customer service representatives to achieve high quality.
      • - Forecast volume of customer service contacts (10390) - Projecting the total work force required to service customer service inquiries in order to effectively predict the volume of vendor contracts required. Estimate the number of the customer service contracts in an agreed-upon time frame in order to strategically maintain the work force necessitated for customer inquires. Analyze historical data around customer service contracts, the universe of customer inquiries, frequency of inquiries, servicing capability (per head) of the employees, etc.
      • - Schedule customer service work force (10391) - Deploying the work force to manage customer service contracts. Create a systematic summary of the operations and service required, as well as the specific amount of work force that is to be deployed to the customer service operations. Ensure work force is directly proportional to the estimated forecast of customer service contracts.
      • - Track work force utilization (10392) - Tracking the utilization of work force deployed for managing customer service operations. Monitor the utility of the work force deployed for managing customer service operations in order to evaluate its efficiency and cost effectiveness. Calculate the overall labor effectiveness, which measures the utility, performance, and quality of the work force.
      • - Monitor and evaluate quality of customer interactions with customer service representatives (10393) - Tracking and determining the quality of interactions between the customer and customer representatives. Use electronic devices to record and effectively assess customer representatives' interactions.
    • 6.2.2 - Manage customer service problems, requests, and inquiries (10388) - Handling the requests and inquiries from customers that seek information regarding the organization's products/services. Obtain the customer requests online and by phone. Direct these requests to higher-level representatives. Approve requests, and respond to customers.
      • - Receive customer problems, requests, and inquiries (10394) - Receiving requests for information from customers over multiple channels. Receive various requests and inquiries from customers regarding products/services. Accept these inquiries through channels such as email, telephone, online forms, text messages, social media, and in person. Supply dedicated equipment, systems, and personnel.
      • - Analyze problems, requests, and inquiries (13482) - Analyzing various requests and inquiries from customers regarding products/services. Provide answers and offerings to satisfy the customer's needs.
      • - Resolve customer problems, requests, and inquiries (10395) - Routing customer inquiries in order to service them with the most apposite response. Direct customer inquires to the best suited personnel or system. Have a system or procedure capable of efficiently channeling these requests.
      • - Respond to customer problems, requests, and inquiries (10396) - Responding to customer requests by email, conversation, interactive voice response, mail, etc. with the most appropriate reply. Instill a robust process to locate the right information for a solution to a customer's problem.
      • - Identify and capture upsell/cross-sell opportunities (16928) - Utilizing customer inquiries as opportunities to either provide a comparable service to the one in question, offer additional complimentary service, or suggest a service that is better than what was initially offered.
      • - Deliver opportunity to sales team (16937) - Providing possible sales leads to the sales team in an effort to garner more business opportunities.
    • 6.2.3 - Manage customer complaints (10389) - Obtaining customer complaints online or by phone. Direct these complaints to higher-level representatives as appropriate. Resolve them. Respond to customers.
      • - Receive customer complaints (10397) - Receiving any complaints or grievances from customers for the organization's products/services. Receive objections, complaints, and criticism from customers regarding products/services through email, telephone, online forms, text messages, social media, in person, etc. Dedicate equipment, systems, and personnel.
      • - Route customer complaints (10398) - Routing any complaints or grievances received from customers in order to address them in the most appropriate manner. Direct complaints to the best suited personnel or system. Implement a system or procedure capable of efficiently channeling the various objections, complaints, and criticism from customers over the offerings provided by the organization.
      • - Resolve customer complaints (10399) - Resolving any customer complaints that are deemed to be sound and reasonable. Redress any objections, grievances, and complaints received from customers regarding the offerings provided by the organization. Identify the legitimate complaints, where the situation needs to be appropriately corrected. Deploy personnel who can rectify the issue within a stipulated time frame.
      • - Respond to customer complaints (10400) - Responding to customer complaints including all activities necessitated to service any objections, complaints, or grievances with the most appropriate reply. Source the right information to formulate a response that eases the discomfort being experienced by the customer. (Closely coordinate with Resolve customer complaints [10399].)
      • - Analyze customer complaints and response/redressal (19072) - Analyzing complaint logs to provide input for continuous service improvement and customer profiling.
    • 6.2.4 - Process returns (20094) - Acquiring returns and identify if the returns are scraped or salvaged.
      • - Authorize return (10364) - Approving and carrying forward the requests by the customers to return the product. This is part of the process of returning a product in order to receive a refund, replacement, or repair during the product's warranty period.
      • - Process return and record reason (20095) - Notating the reason for the return of the product.
    • 6.2.5 - Report incidents and risks to regulatory bodies (12840) - Notifying all stakeholders, legal, and industry regulatory bodies of the incidents and risks related to a return or recall, if needed.
  • 6.3 - Service products after sales (12658) - Assigning post-sales policies and paying claims on purchased products. This is a process that is an administrative function focused on creating rules (claim codes). This group ensures that claims are valid and are processed quickly. As well as to quickly determine responsibility for claim settlement.
    • 6.3.1 - Register products (20605) - Filing product registrations.
    • 6.3.2 - Process warranty claims (12669) - Identifying, investigating, and processes warranty claims. This process includes: receipt and validation of a warranty claim; definition and diagnosis /root cause analysis of an issue and recommendation for corrective action; the determination of responsibility for settlement of the claim; the transaction being approved or denied; and the originator being notified and payment authorized. In the case of a recurring event, further investigation (definition and diagnosis or root cause analysis) is performed, and a recommendation for corrective action is made and implemented in production/design. It ends when the claim is closed.
      • - Receive warranty claim (20096) - Receiving incoming warranty claims. Route claim to correct department. Document claim.
      • - Validate warranty claim (12671) - Ensuring that the claim falls within the parameters of the warranty in question. After validation is made, the claim must be investigated.
      • - Investigate warranty issues (20097) - Executing investigational and analysis of warranty claims. This involves notification and definition of a warranty issue, includes the scheduling of a field service agent to perform further investigation; the request and receipt of defective parts; and diagnosis/root cause analysis. This concludes with the receipt of the result and recommendation for corrective action.
        • - Define issue (20098) - Defining the issue of the claim. The warranty team will look into the issue and understand whether it is covered by the claim code or if more detail is required. Field service will be scheduled to further qualify the definition of the issue and to collect more evidence.
        • - Schedule field service (12677) - Scheduling additional investigative field service. This is performed for high priority claims or claims that require additional investigation. Field service engineers will gather additional information, perform further investigation, and qualify the definition of the issue.
        • - Request and receive defective part (12678) - Requesting receipt of a defective part for further investigation.
        • - Investigate issue/perform root cause analysis (20099) - Investigating claims by an appropriate functional representative. Once the issue has been clearly defined and diagnosed and a recommendation for corrective action is determined, it will be provided to the warranty management team.
        • - Receive investigation result/recommendation for corrective action (20100) - Receiving investigative results to assess claim approval or denial. The warranty team will assess the results of the investigation and the recommendations for corrective action.
      • - Determine responsible party (20101) - Identifying responsible party for a claim. There is no negotiation with the supplier at this point. There can be multiple warranties applicable to the same part: a new part warranty, a new product warranty (for the product the part is installed on), and a supplier warranty from the company that last repaired the part. The information required for this decision would be the output of Receive component/part and analyze fault [19728]."
      • - Manage pre-authorizations (20102) - Authorizing claims prior to submittal.
      • - Approve or reject warranty claim (12668) - Following Defining issue [20098], an approval or rejection with be made against the warranty claim. If it is deemed that the claim falls within the warranty parameters, the claim will be approved. If the claim is deemed to fall outside warranty parameters, the claim with be rejected.
      • - Notify originator of approve/reject decision (20103) - Contacting the originator of whether the warranty claim has been approved or rejected.
      • - Authorize payment (20104) - Allowing for a payment to be made to the claimant.
      • - Close claim (20105) - Archiving and closing the warranty claim after a final decision has been made to either approve or reject.
      • - Reconcile warranty transaction disposition (12667) - Assuring that the warranty transaction has been completed.
    • 6.3.3 - Manage supplier recovery (20106) - Managing the recovery of costs from suppliers for individual claims.
      • - Create supplier recovery claims (20107) - Raising a supplier recovery claim. This is based off the decision made in Receive investigation result/recommendation for corrective action [20100].
      • - Negotiate recoveries with suppliers (20108) - Arranging the returns of recalled products to suppliers.
    • 6.3.4 - Service products (10218) - Validating specific service requirements for individual customers. Determine and schedule resource to fulfill these requirements. Provide service to specific individual customers. Ensure the quality of service delivery.
      • - Confirm specific service requirements for individual customer (10320) - Acquiring or soliciting information about specific service requirements for individual customers through the customer service function. Obtain information about customer specific requests, process these requests, and create customer profiles to generate a service order.
        • - Process customer request (10324) - Soliciting or acquiring information using various sources such as databases, customer interactions, and customer request forms. Hand them further up the hierarchy to deal with them. Categorize the user's request, determining if the request is supportable and prioritizing the request.
        • - Create customer profile (10325) - Documenting the individual customer service requirements solicited, along with personal information of the customers, in order to generate customized profiles that hasten the delivery process.
        • - Generate service order (10326) - Designing a short-term agreement between the service provider and customer. One-time services are ordered by the service recipient and resource-related billing is performed upon completion. Use the service order to document service and customer service work.
      • - Identify and schedule resources to meet service requirements (10321) - Determining and scheduling the resources required to fulfill customer service requirements. Create a detailed schedule about the service orders and development of these service orders.
        • - Create resourcing plan and schedule (10327) - Developing a plan for sourcing and deploying the resources required to fulfill customer service needs. Document a detailed summary of all types of resources (equipment, finance, personnel, time, etc.) required to complete customer service requests and procure these resources. Identify and assess various sources in order to effectively create a resourcing plan.
        • - Create service order fulfillment schedule (10328) - Designing a detailed summary of customer service order requirements, along with information concerning the timing and duration for these services. Categorize the customer needs. Monitor the services delivered.
      • - Provide service to specific customers (10322) - Dispatching resources for managing and fulfilling daily service requirements. Manage the progress of order fulfillment. Complete order blocks.
        • - Organize daily service order fulfillment schedule (10330) - Laying out a daily plan of specific service orders that need to be fulfilled. Document and systematically order these activities to ensure high effectiveness and efficiency.
        • - Execute product repair (10331) - Dispatching and delivering the resources needed for the specific service requirements from the source/warehouse. Manage the dispatch, transportation, and delivery of the services.
        • - Manage service order fulfillment (10332) - Handling and managing orders fulfilled, along with the orders are not or partially fulfilled to track the order fulfillment progress. Use electronic devices such as trackers and GPS in order track and ensure delivery of the orders.
      • - Ensure quality of service (10323) - Guaranteeing the quality of service provided to customers. Identify the successful and unsuccessful orders along with the service failures. Collect customer feedback. Process the feedback to ensure the quality of service in the future.
        • - Identify completed service orders for feedback (10334) - Determining the service orders that have been successfully delivered. Identify the service orders completed and delivered to the customer. Leverage communication systems to ensure coordination with the customers in order to avoid mishaps.
        • - Identify incomplete service orders and service failures (10335) - Determining orders which have not been completed or delivered. Identify the service orders that are partially or entirely incomplete, as well as the orders that have not been delivered to the customer. Use techniques such as project trackers to recognize the progress of the service orders.
        • - Solicit customer feedback on services delivered (10336) - Obtaining and procuring customer reviews or feedback on the services delivered. Design a customer feedback form, or communicate with the customer through the phone or online.
        • - Process customer feedback on services delivered (10337) - Assessing and incorporating customer reviews/feedback into the service plan to ensure high quality of service.
  • 6.4 - Manage product recalls and regulatory audits (20110) - Removing defective products from the distribution chain. Participate in audits from watchdog agencies.
    • 6.4.1 - Initiate recall (20111) - Commencing the removal process of defective products.
    • 6.4.2 - Assess the likelihood and consequences of occurrence of any hazards (20112) - Performing risk analysis. Identify all dangers, evaluate how probable they are, and what kinds of negative results or or adverse side effect they carry.
    • 6.4.3 - Manage recall related communications (20113) - Handling communications that are related to product recalls.
    • 6.4.4 - Submit regulatory reports (20114) - Creating and delivering reports to regulatory agencies to provide details about handling product recalls.
    • 6.4.5 - Monitor and audit recall effectiveness (20115) - Analyzing the effectiveness of product recalls.
    • 6.4.6 - Manage recall termination (20116) - Ending product recalls, communicating to the public and filing reports.
  • 6.5 - Evaluate customer service operations and customer satisfaction (20595) - Calculating and assessing the operational activities of the customer service function. Evaluation is achieved through the customer requests/inquiries handling process, the customer complaint handling process, and product and services quality. Examine activities to ensure high levels of customer service.
    • 6.5.1 - Measure customer satisfaction with customer problems, requests, and inquiries handling (10401) - Calculating satisfaction levels of customers by effectively evaluating the process of handling requests/inquiries of customers. Effectively calculate the performance of customer-requests/inquiries handling and resolution. Obtain information regarding requests/inquiries handling and resolution through customer feedback. Use it to explore new ideas and opportunities for enhanced customer requests/inquiries handling and resolution process.
      • - Solicit customer feedback on customer service experience (11687) - Creating an avenue for which the customer can provide feedback on their experience with how their inquiry, problem, or request was handled.
      • - Analyze customer service data and identify improvement opportunities (11688) - Reviewing customer service feedback to identify areas in which improvements can be made. Engage with management to discuss issues.
      • - Provide customer feedback to product management on customer service experience (18126) - Handing over data to management to analyze common issues in regards to customer service.
    • 6.5.2 - Measure customer satisfaction with customer- complaint handling and resolution (10402) - Measuring the satisfaction level of customers as pertains to how their complaints are handled and resolved. This process element requires the organization to estimate the customers level of fulfillment with the process reconciling their complaints and towards the objective of ensuring customer retention. The feedback received can be used to develop concepts for new opportunities to boost the level of customer satisfaction.
      • - Solicit customer feedback on complaint handling and resolution (11236) - Requesting customer feedback on the process of handling and resolving customer complaints. Obtain information about the effectiveness and performance of the customer complaint handling process from the customers through various means (e.g., online and by phone).
      • - Analyze customer complaint data and identify improvement opportunities (11237) - Examining the information obtained through handling and resolving complaints for development/improvement opportunities. Categorize the customer complaints data on the basis of speed, accuracy, courtesy, price, product choice, availability, hours, location, etc. Determine complaint patterns in order to diagnose areas needing enhancement.
      • - Identify common customer complaints (11689) - Determining complaint patterns in order to identify common issues. Document common problems for correction.
    • 6.5.3 - Measure customer satisfaction with products and services (10403) - Calculating satisfaction levels of customers with products/services. Obtain customer feedback on products/services, as well as the effectiveness of the advertising campaigns. Examine this information to reach meaningful conclusions, which could then be used to enhance the customer service operations.
      • - Gather and solicit post-sale customer feedback on products and services (11238) - Obtaining customer feedback/review on the quality and utility derived from the products/services after the sale is complete. Use techniques such as surveys, feedback boxes, and user activity and usability tests.
      • - Solicit post-sale customer feedback on ad effectiveness (11239) - Assessing the influence of advertisements on purchasing behavior. Use techniques such as surveys and product recognition tests, questionnaires or feedback flyers, and toll-free numbers in order to encourage customer interaction after the sale.
      • - Solicit customer feedback on cross-channel experience (20117) - Engaging with the customer to understand their cross-channel experience. Find out what channels were effective and what areas need improvement.
      • - Analyze product and service satisfaction data and identify improvement opportunities (11240) - Assessing the information collected on customer satisfaction levels with products/services in order to determine areas for improvement. Examine the data and information extracted from the customer feedback and reviews to measure the satisfaction levels of the customers. Identify opportunities that could enhance the customer satisfaction levels and the overall customer service strategy.
      • - Provide feedback and insights to appropriate teams (product design/development, marketing, manufacturing) (11241) - Providing feedback from customers on products/services to the product management team. Analyze information collected through Gather and solicit post-sale customer feedback on products/services [11238]. Share with the product management team for consideration while improving existing offerings or developing new products/services.
    • 6.5.4 - Evaluate and manage warranty performance (12672) - Assessing the cost and effectiveness of warranties.
      • - Measure customer satisfaction with warranty handling and resolution (20118) - Evaluating how satisfied customers are with how product warranties are managed and resolved.
      • - Monitor and report on warranty management metrics (12676) - Comparing warranties by using using applicable metrics to see how they are handled and resolved. Develop and submit reports that summarize significant conclusions.
      • - Identify improvement opportunities (20119) - Determining how warranties and warranty management can be made better and more efficient.
      • - Identify opportunities to eliminate warranty waste (12674) - Finding ways to phase out unused or seldom used warranties.
      • - Investigate fraudulent claims (20120) - Reviewing and assessing claims that contain deliberately incorrect information or that have been submitted with the goal to deceive the system.
    • 6.5.5 - Evaluate recall performance (20121) - Reviewing customer service feedback to identify areas in which improvements can be made. Engage with management to discuss issues.