1. What is Retention Rate?

Retention rate measures the percentage of customers or users that continue to use your product or service over a given time period. It's a key metric for understanding customer loyalty and business health.

2. How Does the Calculator Work?

The calculator uses the retention rate formula:

Where:

• Retained Customers — Number of customers who stayed during the period
• Initial Customers — Number of customers at the start of the period

Explanation: The formula calculates what percentage of your original customer base you've retained over a specific time period.

3. Importance of Retention Rate

Details: Customer retention is crucial for business sustainability. Higher retention rates typically lead to increased revenue, lower acquisition costs, and stronger brand loyalty.

4. Using the Calculator

Tips: Enter the number of retained customers and initial customers. Both values must be positive numbers, with retained customers not exceeding initial customers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good retention rate?
A: This varies by industry, but generally 85%+ is excellent, 70-85% is good, and below 70% may indicate problems.

Q2: How is retention different from churn?
A: Retention is the percentage who stay, while churn is the percentage who leave. They add up to 100%.

Q3: What time period should I use?
A: Common periods are monthly, quarterly, or annually. Be consistent in your measurement period.

Q4: Should I include new customers?
A: No, retention rate focuses only on existing customers from the start of the period.

Q5: How can I improve retention?
A: Focus on customer satisfaction, address pain points, provide excellent service, and build strong relationships.