Retention Data
Loyalty Metrics
A customer retention rate calculator measures the percentage of customers a business successfully keeps over a specific period. Acquiring new customers is notoriously more expensive than retaining existing ones, making your retention rate one of the most vital indicators of long-term business health and profitability.
How to Calculate Customer Retention Rate
To accurately calculate retention, you must exclude any brand new customers you gained during the measured time frame. You only want to measure the loyalty of the customers you started with.
CRR = ((Customers at End - New Customers) / Customers at Start) * 100
For example, if you start the month with 1,000 customers, gain 300 new customers, and end the month with 1,150 total customers, you retained 850 of your original group. Dividing 850 by 1,000 gives 0.85, meaning your customer retention rate is 85 percent.
How to Use This Calculator
- Enter the total number of active customers you had at the very beginning of the period.
- Enter the total number of active customers you have at the very end of the period.
- Input the number of strictly new customers you acquired during this time frame.
- Enter the average revenue or profit a single customer brings you to calculate the financial value of your retained audience.
Frequently Asked Questions
What is the difference between retention and churn?
Retention and churn are direct opposites. Retention rate measures the percentage of customers who stayed with your business. Churn rate measures the percentage of customers who left or canceled their service. If your retention rate is 85 percent, your churn rate is naturally 15 percent.
What is considered a good customer retention rate?
A good retention rate varies widely by industry. For SaaS (Software as a Service) companies, a retention rate of 90 percent or higher annually is considered excellent. In eCommerce or retail, maintaining a 30 to 40 percent retention rate over a year is often viewed as highly successful due to the nature of one-off purchases.
How can I improve my customer retention?
Improving retention starts with excellent post-purchase communication. You can reduce churn by offering loyalty programs, sending personalized email follow-ups, resolving customer support tickets rapidly, and actively requesting feedback to improve your product or service.