1. What is Customer Retention Rate?

The Customer Retention Rate (CRR) measures the percentage of customers a business retains over a given period. It's a key metric for understanding customer loyalty and business health.

2. How Does the Calculator Work?

The calculator uses the CRR formula:

Where:

• \( CE \) — Number of customers at end of period
• \( CN \) — Number of new customers acquired during period
• \( CS \) — Number of customers at start of period

Explanation: The formula calculates what percentage of your original customers remained with your business after accounting for new customer acquisition.

3. Importance of Customer Retention

Details: Retaining customers is typically more cost-effective than acquiring new ones. High retention rates often correlate with customer satisfaction, product quality, and strong brand loyalty.

4. Using the Calculator

Tips: Enter the number of customers at the start and end of your measurement period, plus the number of new customers acquired during that time. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a good customer retention rate?
A: Rates vary by industry, but generally 85-90% is excellent, 60-70% is average, and below 50% may indicate problems.

Q2: How often should I calculate CRR?
A: Monthly or quarterly calculations are common, depending on your business cycle and customer interactions.

Q3: What's the difference between retention rate and churn rate?
A: Retention rate measures customers kept, while churn rate measures customers lost. They're complementary metrics (CRR = 100% - Churn Rate).

Q4: Should I include lost customers in CE?
A: No, CE should only count active customers at period end. Lost customers are accounted for in the formula by comparing to CS.

Q5: Can CRR be over 100%?
A: Yes, if you retain all original customers and acquire many new ones, though this is rare and usually indicates extraordinary growth.