Retention Rate
Customer Retention Rate
Retention
The percentage of customers who remain subscribed over a period. Calculated as (Customers at End - New Customers) / Customers at Start × 100.
What is Retention Rate?
Customer Retention Rate measures the percentage of customers who continue their subscription over a given period. It's the inverse of churn rate and a key indicator of customer satisfaction.
Why retention matters:
- Retaining customers is 5-25x cheaper than acquiring new ones
- High retention compounds over time
- Retained customers often have higher LTV
- Strong retention enables profitable growth
Retention benchmarks vary by industry:
- Consumer subscriptions: 70-80% annual retention
- B2B SaaS: 85-95% annual retention
- Enterprise SaaS: 95%+ annual retention
Formula
Retention Rate = ((Customers at End - New Customers) ÷ Customers at Start) × 100
Example
Start with 1,000 customers, end with 1,100, added 200 new. Retention = (1,100 - 200) / 1,000 = 90%.
Why Retention Rate Matters
High retention is the foundation of sustainable subscription growth.
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