marketing
Retention Rate
Percentage of customers retained over a period. The other side of churn.
Definition
Retention rate is the percentage of customers you keep over a period - if you started a month with 100 customers and ended with 95, retention is 95%. Retention rate is the inverse of churn rate. Two key versions: logo retention (% of customers retained) and revenue retention (% of revenue retained). For SaaS, healthy annual logo retention is 85-95%; for service retainers, 80%+ is healthy. Net Revenue Retention (NRR) above 100% means existing customers grow faster than they churn - the healthiest state.
In your business
- →Track logo retention and revenue retention separately - they tell different stories
- →Cohort by signup period - new cohorts often retain differently than older ones
- →Build a customer success function before retention becomes a problem