A high score indicates effective customer relations and an effective loyalty strategy.

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A low score, on the other hand, may signal problems with customer service or offerings.

Example:

At the beginning of the year the company had 2,000 customers (S)
Within a year, it acquired 500 new customers (N)
At the end of the year it had 2,300 customers (E)
CRR = [(2300 – 500) / 2000] x 100% = 90%

Interpretation: The higher the CRR, the better the company is at maintaining architect database ts customer base. A value of 90% means that out of the original 2,000 customer base, the company has managed to retain 90% of them despite some of them purchasing competing products/services.

CRR is an important metric for monitoring customer loyalty, retention effectiveness, and estimating recurring revenue from a retained customer base. High CRR increases a company's profitability by reducing the need for constant acquisition of new customers. You can read more about key KPIs in Bart Berliński's text: E-commerce KPI – what is the measure of success in an online store?