Retention Rate Calculator
Calculate customer retention rates and compare against industry benchmarks to improve customer loyalty and reduce churn
Number of customers at the beginning of the period
Number of customers at the end of the period
Number of new customers acquired during the period
Select your industry to compare against benchmarks
What is Retention Rate?
Retention rate measures the percentage of customers who continue doing business with you over a specific period. It's one of the most important metrics for understanding customer loyalty, product-market fit, and long-term business sustainability.
High retention rates indicate satisfied customers who find ongoing value in your product or service, while low retention signals potential issues with product quality, customer experience, or value proposition.
How to Calculate Retention Rate
Where:
- E = Customers at end of period
- N = New customers acquired during period
- S = Customers at start of period
Example: If you started with 1,000 customers, ended with 920, and acquired 150 new customers:
Retention Rate = ((920 - 150) ÷ 1,000) × 100 = 77%
Industry Benchmarks
Monthly Retention
- Telecom: 97%
- Financial Services: 95%
- SaaS: 93%
- Media/Publishing: 84%
Annual Retention
- Telecom: 78%
- Financial Services: 75%
- Media/Publishing: 55%
- SaaS: 35%
Why Retention Rate Matters
- Cost efficiency: Retaining customers is 5-25x cheaper than acquiring new ones
- Revenue predictability: High retention creates stable, recurring revenue streams
- Growth indicator: Shows product-market fit and customer satisfaction
- Compounding value: Retained customers often increase spending over time
How to Improve Retention Rate
- Enhance onboarding: Create smooth, guided experiences that help customers realize value quickly
- Provide excellent support: Respond quickly to issues and proactively help customers succeed
- Deliver consistent value: Continuously improve your product and communicate new features
- Engage regularly: Maintain communication through email, in-app messaging, and content
- Gather feedback: Understand why customers leave and address common pain points
- Build loyalty programs: Reward long-term customers with special perks and recognition
Retention vs Churn
Retention rate and churn rate are inverse metrics that sum to 100%. If your retention rate is 77%, your churn rate is 23%. Both metrics provide valuable insights:
- Retention rate: Focuses on customers who stay (positive framing)
- Churn rate: Highlights customers lost (helps identify problems)