What is the Retention Rate?

Retention Rate (in marketing) is the number of customers or participants a business can retain over a period of time.

How Retention Rates Work

1. Calculate

   To get your retention rate, divide the number of customers/participants no longer signed to your service by the total number of customers/participants, over a period of time.

2. Measure

   It is up to you how you'd like to measure you're retention rate. For example, if you have a subscription service, you can measure the number of cancellations over time. If you have a product to sell, you can measure the number of impressions that didn't make a purchase.

3. Simple but Effective

   It's a pretty simple formula that can save your business by helping to determine where and how you might be losing your customers.

Why Retention Rates Matter

1. Measuring Success

   Like a Churn Rate, Retention Rates give you a good idea of how you're business is doing by showing you where the opportunity is.

2. Try New Things

   By keeping an eye on Retention Rate, you can tweak your marketing plan to include or improve customer loyalty benefits and initiatives.

3. Relationships Matter

   Retention is measured when the potential customer first has an impression of a product or service. Retention Rate describes the quality and longevity of the relationship a customer has with a business.