What is Customer Retention Rate?
Share of customers retained over a period.
How to calculate it
Calculate Customer Retention Rate as: ((End customers − New) / Start customers) × 100. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
Start with 480 customers, end with 500 including 40 new -> ((500-40)/480) = 96% retention.
Example 2
Starting with 480 customers and ending with 500 including 40 new ones -> ((500-40)/480) = 96% retention, a strong base for compounding growth.
Why it matters
Customer retention rate is the share of customers retained over a period and matters because retaining customers is far cheaper than acquiring new ones and compounds lifetime value. High retention is the foundation of efficient, durable growth. Failing to separate new from retained customers in the calculation distorts the figure.
Benchmark context
Higher is better and varies by model; subscription businesses should target the high 80s to 90s annually, with enterprise higher than SMB.
Common pitfalls
Not separating new from retained customers.
Related KPI guides
Turn KPI definitions into governed dashboards
Metricwise helps teams define metrics once, reuse them across dashboards, and ask trusted business questions in plain English.
Get Started