How To Calculate Customer Retention Cost in Blackbaud | Arithmix

Customer retention cost is a crucial metric for any business looking to grow and succeed in the long term. It helps you understand how much it costs to keep your existing customers happy and engaged, and how much you need to invest in retaining them. In this article, we'll explore what customer retention cost is, when it's valuable to calculate it, and how you can calculate it in Blackbaud.

What Is Customer Retention Cost?

Customer retention cost is the amount of money you need to spend to keep your existing customers coming back to your business. This includes all the costs associated with customer service, marketing, and other activities that are designed to keep your customers engaged and loyal. It's important to note that customer retention cost is not the same as customer acquisition cost, which is the amount of money you need to spend to acquire new customers.

Calculating customer retention cost can help you understand how much you need to invest in your existing customer base to keep them engaged and loyal. It can also help you identify areas where you can improve your customer retention efforts and reduce your overall costs.

When Is It Valuable To Calculate Customer Retention Cost?

Calculating customer retention cost is valuable for any business that wants to grow and succeed in the long term. It's especially important for businesses that rely heavily on repeat customers, such as subscription-based services, e-commerce businesses, and SaaS companies.

By understanding your customer retention cost, you can make informed decisions about how much you need to invest in customer retention efforts, such as loyalty programs, customer service, and marketing campaigns. You can also identify areas where you can reduce costs and improve your overall customer retention strategy.

How to Calculate Customer Retention Cost in Blackbaud

Calculating customer retention cost in Blackbaud is a straightforward process. Here are the steps you need to follow:

1. Identify the time period you want to analyze. This could be a month, a quarter, or a year.
2. Determine the total revenue you generated from your existing customers during that time period.
3. Calculate the total cost of customer retention efforts during that time period. This includes all the costs associated with customer service, marketing, and other activities that are designed to keep your customers engaged and loyal.
4. Divide the total cost of customer retention efforts by the total revenue generated from your existing customers during that time period. This will give you your customer retention cost as a percentage of revenue.

Once you have calculated your customer retention cost, you can use this information to make informed decisions about how much you need to invest in customer retention efforts and identify areas where you can reduce costs and improve your overall customer retention strategy.

In conclusion, calculating customer retention cost is a valuable metric for any business looking to grow and succeed in the long term. By understanding your customer retention cost, you can make informed decisions about how much you need to invest in customer retention efforts and identify areas where you can reduce costs and improve your overall customer retention strategy. With Blackbaud, calculating customer retention cost is a straightforward process that can help you take your business to the next level.

How Do You Calculate Customer Retention Cost in Blackbaud

Blackbaud itself isn’t naturally geared towards letting you calculate complex metrics like Customer Retention Cost. As an alternative, teams typically use products like Arithmix to import data from Blackbaud and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Blackbaud, combine it with data from other systems, and create calculations like Customer Retention Cost.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Customer Retention Cost in Arithmix

Calculating metrics like Customer Retention Cost is simple in Arithmix. Once you've created your free account, you’ll be able to import your Blackbaud data, and use it to create natural language formulas for metrics like Customer Retention Cost.

Arithmix is designed to give you the power to build any calculations you want on top of your Blackbaud data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.