Customer Retention Rate is the percentage of customers who continue doing business with your company over a specific time period. It shows how successful you are at retaining customers after acquisition.
To calculate Customer Retention Rate, subtract the number of new customers gained during the period from the total customers at the end of the period. Then divide by the number of customers at the start of the period, and multiply by 100.
Customer Retention Rate (%) = ((Customers at End of Period − New Customers) ÷ Customers at Start of Period) × 100
Customer Retention Rate (%) = ((Customers at End of Period − New Customers) ÷ Customers at Start of Period) × 100
If you started the quarter with 1,000 customers, gained 300 new ones, and ended with 1,100 customers, your Customer Retention Rate would be 80%. This means 80% of your existing customers stayed with your business.
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A good Customer Retention Rate varies by industry, but in SaaS and ecommerce, 85–90% monthly retention or higher is considered strong. High retention leads to higher Customer Lifetime Value and lower churn.
A low Customer Retention Rate – especially under 50% – can suggest product dissatisfaction, poor onboarding, or lack of ongoing value, making growth harder and more expensive.
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