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Customer Retention Rate
Definition
Customer retention rate is the percentage of existing customers a company keeps over a given period, excluding any new customers acquired during that time.
How to calculate it
The standard formula is: ((customers at end of period − new customers acquired during period) ÷ customers at start of period) × 100. If you started with 1,000 customers, ended with 1,100, and gained 200 new ones, retention is ((1,100 − 200) ÷ 1,000) × 100 = 90%.
Subtracting new customers is what keeps the metric honest — it isolates how well you held on to the base you already had. Retention rate is the mirror image of churn rate; the two add up to 100%.
Why it matters
Retaining customers is far cheaper than acquiring new ones, and retained customers tend to spend more over time — so retention rate is a direct lever on profitability and customer lifetime value. Consistent, effective support is one of the clearest ways to raise it.
Frequently asked
What is the difference between retention rate and churn rate?
They are complements: retention rate is the share of customers you keep, churn rate is the share you lose, and together they total 100%. Reporting one implies the other.
How do you improve customer retention?
Deliver reliable outcomes, resolve issues quickly and completely, act on feedback, and intervene early when health scores dip — support experience is a major driver of whether customers stay.
Related terms
Customer Churn Rate
Customer churn rate is the percentage of customers who stop doing business with a company over a given period — canceling, not renewing, or lapsing — relative to the total at the start of that period..
Customer Lifetime Value (CLV)
Customer lifetime value (CLV) is the total net revenue a business can expect from a single customer across the entire length of their relationship..
Customer Health Score
A customer health score is a composite metric that combines signals like product usage, support activity, satisfaction, and engagement into a single rating that predicts whether a customer is likely to renew, grow, or churn..
Net Promoter Score (NPS)
Net Promoter Score (NPS) is a customer loyalty metric that measures how likely customers are to recommend a company, product, or service to others, on a 0–10 scale..
Customer Satisfaction Score (CSAT)
Customer Satisfaction Score (CSAT) is a metric that measures how satisfied customers are with a specific interaction or experience, usually from a short post-contact survey..
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