Finance

Retention Rate

The percentage of customers (or revenue) retained over a period — the inverse of churn.

Retention Rate measures the percentage of customers (or revenue) you keep over a given period. Net Revenue Retention (NRR) is the most important variant for SaaS — it includes the offsetting effect of expansion revenue from existing customers. Companies with NRR > 100% can grow without acquiring a single new customer.

Formula

Customer Retention = ((Customers at End - New Customers) / Customers at Start) × 100

Example

Start month with 500 customers, end with 510 (acquired 30 new, lost 20). Retention = (510 - 30) / 500 = 96%.