Formula
Retention rate = (Ending customers − New customers) ÷ Starting customers × 100Retention calculation
Subtract new customers from the ending customer count, divide by starting customers and multiply by 100. Starting with 2,000 customers and ending with 2,150 after adding 250 gives 95% retention.
Cohort retention is often better
The aggregate formula is useful for reporting, but customer cohorts reveal whether retention differs by acquisition month, product, channel or plan.
Define active status
Subscription cancellation, purchase inactivity and account deletion are different events. Set a clear active-customer rule before calculating retention.
Assumptions
- Customer status and period boundaries are defined consistently.
Sources and methodology
CalcMotive publishes the formula and assumptions so you can decide whether the estimate fits your use case. See our methodology standards.