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Client Retention Rate

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What is Client Retention Rate?

Client Retention Rate (CRR) is a key performance indicator that measures the percentage of clients a business retains over a specific period. It’s a reflection of a company’s ability to satisfy its clients, ensuring they continue to use its services or products.

Prioritizing client retention becomes paramount, as it is notably less costly than acquiring new customers, simultaneously fostering an environment for sustainable growth and robust customer relationships. By optimizing your services, understanding, and catering to customer needs, you construct a formidable foundation for consistent business success.

Importance of Client Retention Rate

A higher rate shows good customer service and satisfaction, making a company stable and profitable. Keeping clients is cheaper than getting new ones. A high CRR indicates: Strong client relationships, High client satisfaction and Effective service delivery.

Moreover, loyal clients often provide valuable feedback, refer new clients, and contribute to stable revenue streams. In the context of Professional Service Automation (PSA), understanding and improving CRR can lead to more efficient service delivery and better resource allocation.

Client Retention Rate

Why Client Retention Rate is so important?

How to Calculate Client Retention Rate?


CRR = ((E−N)/S) x 100


E = Number of clients at the end of the period

N = Number of new clients acquired during the period

S = Number of clients at the start of the period


If a PSA firm starts the month with 100 clients, loses 5, but gains 10 new clients, the CRR is:


Client Retention Rate vs Other Metrics

While CRR focuses on the percentage of retained clients, other metrics like Customer Churn Rate (CCR) measure the percentage of clients lost. Understanding the difference between CRR and CCR is crucial for effective financial management.

Metric Definition Importance in PSA
Client Retention Rate Percentage of clients that continue to use a service over a specific period of time. Indicates client satisfaction and long-term relationship.
Client Acquisition Rate Number of new clients acquired over a specific period. Measures the effectiveness of marketing and sales efforts.
Client Churn Rate Percentage of clients that stop using a service over a specific period of time. Helps identify issues leading to client attrition.
Average Revenue Per Client Total revenue divided by the number of clients over a specific period. Indicates the value or profitability of each client.

How Client Retention Rate is Used?

PSA leverages CRR to cultivate long-term client relationships, ensuring sustainability and growth in competitive markets. This data helps businesses keep current clients and attract new ones by showing that they are reliable and knowledgeable.

CRR is used to:

  • Assess client satisfaction
  • Forecast revenue
  • Allocate resources effectively in PSA
  • Inform strategies for client relationship enhancement

For instance, a PSA firm with a high CRR might invest more in resource management tools to cater to its stable client base. Conversely, a low CRR might indicate the need for better project management or ticket management strategies.

Ready to Optimize Client Retention?

KEBS, a leading PSA software, offers tools to enhance client retention. Ensure optimal allocation of resources to meet client needs using tools like employee 360. Use features like the Gantt chart to streamline project timelines and deliver on promises.

Utilize ticket management software to address client concerns promptly. Offer transparent billing and efficient financial management to build trust.

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Ready to optimize your Client Retention Rate with KEBS? Contact us today or request a demo to see how KEBS can transform your client retention strategies.

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