Customer retention rate calculator

The customer retention rate formula

Customer retention rate is the share of the customers you had at the start of a period who are still customers at its end (what customer retention means). The standard formula takes the customers you have at the end, subtracts the new customers who joined during the period, and divides what is left by the customers you had at the start.

Retention rate = (customers at the end − new customers) ÷ customers at the start × 100

If you started the month with 200 customers, ended it with 215, and 24 of those were new, then 215 − 24 = 191 of your original customers stayed. 191 ÷ 200 is a retention rate of 95.5%.

Why new customers are taken out

Without that step, a month with lots of sign-ups would look like a month where nobody left, even if many did. Taking the new customers out means the number only answers one question: of the people who were already paying you, how many stayed?

That also means the period matters. Measure a month and compare it with other months, or measure a quarter and compare it with other quarters. Mixing the two makes the numbers look better or worse than they are.

Retention and churn

Over the same period, customer retention and customer churn add up to 100%. A retention rate of 95.5% is a churn rate of 4.5%. The churn rate calculator works it out from the other side, and also shows what that churn adds up to over a year.

Net revenue retention

Customer retention counts people. Net revenue retention counts money: the recurring revenue you had at the start from existing customers, plus their upgrades, minus their downgrades and cancellations, divided by what you started with. Because upgrades count, it can go above 100%, which means your existing customers are paying you more than before even after some of them left.

For a small SaaS, customer retention is usually the place to start, because it shows whether people stay at all. Revenue retention becomes more useful once you have plans that customers move between.

How to raise it

Most customers who leave a small SaaS show signs first. They stop logging in, a card fails and nobody fixes it, or they reach the end of a trial without having done the one thing the product is for. An email at each of those moments, sent soon and written for that person, gives you a chance to keep them before they decide to leave.

These guides cover what to send: onboarding emails for the first weeks, re-engagement emails for people who went quiet, and the failed payment email for cards that fail.

Kicklace sends these for you, written from what each customer actually did in your product and in your own voice. Try it in the demo with no sign-up.

FAQ

What is customer retention rate?

It is the share of the customers you had at the start of a period who are still customers at the end of it, leaving out anyone who joined during the period.

How often should I measure it?

Monthly works well for most small SaaS products, because it is often enough to notice a change while there is still time to do something about it. Look at the same period each time so the numbers can be compared.

Is a higher retention rate always better?

In nearly every case it is. The one thing to watch is a rate that looks high only because your customer count is small, where one or two people make a big difference. With few customers, look at who left and why, not just the percentage.