Value Metric
Retention Rate
Retention Rate is the percentage of customers who keep using your product across a period — the inverse of churn.
What is Retention Rate?
Retention Rate measures the share of customers (or users, or revenue) that you keep over a given period. It is the mirror image of churn: if 92% of customers stay, your retention rate is 92% and your churn is 8%.
Retention is the clearest measure of whether your product delivers durable value. Acquisition fills the top of the funnel, but retention is what turns that traffic into a compounding base of revenue and referrals.
How to calculate it
Retention Rate = (Customers at End − New Customers Acquired) ÷ Customers at Start × 100
- Customers at End
- Total customers at the end of the period
- New Customers Acquired
- Customers added during the period
- Customers at Start
- Total customers at the start of the period
Worked example
Start with 1,000 customers, add 150, and end with 1,050. Retention = (1,050 − 150) ÷ 1,000 × 100 = 90%.
What good looks like
- Good annual retention (B2B SaaS)90%+ logo retention
Strong B2B products retain 90%+ of logos annually; net revenue retention above 100% means expansion outpaces churn.
- Retention curve shapeFlattening
A retention curve that flattens (rather than decaying to zero) is the signal of genuine product-market fit.
Why it matters
Small changes in retention compound enormously. Because retained customers generate revenue, expansion, and word-of-mouth at near-zero marginal acquisition cost, a few points of retention often move the business more than a large increase in top-of-funnel traffic. Retention is also the earliest honest read on product-market fit — a curve that never flattens means you are refilling a leaky bucket.
How to improve Retention Rate
Fix the moments users drop off
Map where cohorts disengage and interview lapsed users to learn why. Retention problems are usually value-realization problems, not feature-count problems.
Strengthen onboarding to first value
Most churn happens early. Getting users to their first meaningful outcome faster lifts every downstream retention cohort.
Build habit-forming re-engagement loops
Triggers, digests, and reasons to return convert one-time value into a repeated behavior that sustains retention.
Frequently asked questions
What is a good retention rate?
It depends heavily on model and segment. Strong B2B SaaS retains 90%+ of logos per year, while consumer apps operate on much steeper curves. The most reliable signal is not the absolute number but whether your retention curve flattens over time instead of decaying to zero.
What is the difference between retention rate and churn rate?
They are two sides of the same coin. Retention rate is the percentage of customers you keep; churn rate is the percentage you lose. If retention is 92%, churn is 8%. Teams track whichever framing makes the goal clearer.
What is the difference between logo and revenue retention?
Logo retention counts customers kept; revenue retention counts dollars kept. Net revenue retention also includes expansion from existing customers, so it can exceed 100% even when some customers leave — a hallmark of the best SaaS businesses.