Who is driving my customer retention rate: Is it me or you?
(A2025-126412)

AUTHORS

Johannes Roscher, Goethe University Frankfurt; BERND SKIERA, Goethe University Frankfurt, Germany; Ali Tamaddoni, Deakin Business School

ABSTRACT

The duration a customer uses a product is a critical measure of success. Characteristics of the product and the customer influence this duration, but little is known about the size of both effects. This article examines both effects in an empirical study covering 90,000 business-to-business customers and their use of the product of over 10,000 firms. Findings reveal that the product effect is only slightly higher than the customer effect. This difference increases for firms with higher retention rates. These findings suggest that customer selection is crucial, implying that further attention should lie on selecting customers with the right characteristics.