Retention Rate Calculator
You kept 92.5% of the customers you started the period with.
What is Retention rate?
Customer retention rate is the share of existing customers you kept over a period, calculated as (customers at the end minus new customers acquired) divided by customers at the start, times 100.
It strips out new signups on purpose, so it measures how well you hold the customers you already had rather than how many you added.
Retention is the engine behind every other growth metric. The longer customers stay, the more acquisition pays off and the higher lifetime value climbs. It is simply the mirror of churn: retention plus churn equals 100%.
How to calculate Retention rate
Retention = (End − New) ÷ Start × 100
- Count customers at the start. How many you had when the period began. The example uses 2,400.
- Count customers at the end. The total at the close of the period, 2,520 here, including any new ones.
- Subtract the new customers. Remove those acquired during the period to isolate the original base. 2,520 minus 300 is 2,220 kept.
- Divide by the start and multiply by 100. 2,220 divided by 2,400, times 100, is a 92.5% retention rate.
Worked example
A business starts with 2,400 customers, ends with 2,520, and acquired 300 along the way.
| Customers at start of period | 2,400 |
|---|---|
| Customers at end of period | 2,520 |
| New customers acquired | 300 |
| Result | 92.5% · Healthy |
Of the 2,400 you started with, 2,220 stayed, a 92.5% retention rate that clears the 90% convention. The other side of that is a 7.5% churn rate, 180 customers lost.
What is a good Retention rate?
A retention rate of 90% or more per period is the common rule of thumb for a healthy subscription business, the level at which the calculator marks it green. It is a convention, not a law.
| Retention rate | Read |
|---|---|
| healthy 90% or more | A common target for monthly retention |
| watch 80% to 90% | Workable but the base erodes meaningfully over a year |
| weak under 80% | At a monthly rate, most of the base is gone within a year |
The right level depends on the period and the model: B2B retention usually runs higher than consumer apps. Judge it against your own trend and your sector, not a single figure.
How to improve Retention rate
- Invest in onboarding so customers reach value early and form a habit.
- Watch for at-risk signals such as falling usage, and reach out before customers leave.
- Build switching cost and ongoing value so staying is the easy choice.
- Fix the top reasons customers leave, found through exit surveys and cohort analysis.
Frequently asked questions
- What is customer retention rate and how do you calculate it?
- Customer retention rate is the share of existing customers you keep over a period, ignoring new signups. Subtract new customers acquired from customers at the end, divide by customers at the start, then multiply by 100. Starting with 2,400, ending with 2,520 and acquiring 300 gives a 92.5% retention rate.
- What is a good retention rate?
- Higher is better, and 90% or more per period is a common rule of thumb for a healthy subscription business, but it is a convention, not a law. The right level depends on the period and model: B2B retention tends to run higher than consumer. Track your own trend rather than chasing a universal figure.
- Is a 90% retention rate good?
- It depends on the period. 90% monthly means losing 10% of customers a month, which compounds to most of the base over a year and is weak for many models; 90% annual is solid. Treat 90% as a healthy gut check for monthly retention, but always note the window.
- How are retention rate and churn rate related?
- They are two sides of the same coin: retention plus churn equals 100% for a period. A 92.5% retention rate is a 7.5% churn rate. Retention frames the customers you kept; churn frames the ones you lost. Use whichever is clearer for the point you are making.
- Why exclude new customers from retention?
- Because retention measures how well you hold the customers you already had, not how many you added. If you counted new signups, fast acquisition could mask heavy losses among existing customers. Subtracting new customers isolates the survival of the original base.