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This article is about the measure of customers or participants retained. For the financial measure of profits reinvested in a corporation, see retention ratio.
The term "retention rate" is used in a variety of fields, including marketing, investing, education, in the workplace and in clinical trials. Maintaining retention in each of these fields often results in a positive outcome for the overall organization or school, or pharmacological study. In marketing, retention rate is used lớn count customers and track customer activity irrespective of the number of transactions (or dollar value of those transactions) made by each customer.
"Retention rate is the ratio of the number of retained customers lớn the number at risk". In contractual situations, it makes sense lớn talk about the number of customers currently under contract and the percentage retained when the contract period runs out." This term should not be confused with growth (decline) in customer counts. Retention refers only lớn existing customers in contractual situations. "In non-contractual situations (such as catalog sales), it makes less sense lớn talk about the current number of customers, but instead lớn count the number of customers of a specified recency." In a survey of nearly 200 senior marketing managers, 63 percent responded that they found the "retention rate" metric very useful.
The purpose of the "retention rate" metric in a marketing atmosphere is lớn monitor firm performance in attracting and retaining customers. "Only recently have most marketers worried about developing metrics that focus on individual customers. In order lớn begin lớn think about managing individual customer relationships, the firm must first be able lớn count its customers. Although consistency in counting customers is probably more important phàn nàn formulating a precise definition, a definition is needed nonetheless. In particular, we think the definition of and the counting of customers will be different in contractual versus non-contractual situations." Since there are multiple definitions of retention rates this could cause issues with interpreting retention rates in practice.
In the workplace arena, the purpose of the retention rate is lớn assist organizations with deciding when lớn take action in order lớn keep employees happy and motivated. According lớn a survey by CNN Money, the top 100 best companies lớn work for had less phàn nàn a 3% turnover rate during a 12-month period.
Retention rate may also refer lớn colleges. According lớn the FAFSA, the retention rate is the percentage of a school’s first-time, first-year undergraduate students who continue at that school the next year. For example, a student who studies full-time in the fall semester and keeps on studying in the program in the next fall semester is counted in this rate.
"Retention applies lớn contractual situations in which customers are either retained or not. Customers either renew their magazine subscriptions or let them run rẩy out. Customers maintain a current trương mục with a ngân hàng until they close it. Renters pay rent until they move out. These are examples of pure customer retention situations where customers are either retained or considered lost for good. In these situations, firms pay close attention lớn retention rates."
- Retention Rate: The ratio of the number of customers retained lớn the number at risk.
Retention in the workplace refers lớn “the percentage of employees who were employed at the beginning of a period, and remain with the company at the over of the period”. For example, in January 2010, Company A had 500 employees. After one year, 200 of the 500 employees were still working for the company. The retention rate is 200/500 = 40%.
- Employee retention
- Turnover (employment)
- University student retention
No retention rate methodologies have been independently audited by the Marketing Accountability Standards Board (MASB) according lớn MMAP (Marketing Metric phân tích và đo lường Protocol).
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