Glossary · Conversion & retention
What is retention rate?
Retention rate is the percentage of users or customers from a starting group who are still active — still subscribed, or still coming back — after a given period.
Also called: User retention, Customer retention rate
Updated
How is retention rate calculated?
Customer retention rate = (customers at end − new customers acquired) ÷ customers at start × 100 N-day retention = users from a cohort active on day N ÷ cohort size × 100
The first formula is the classic subscription version: it excludes new customers so growth doesn't mask losses. The second is the product-analytics version used in cohort tables: of the people who started in a period, how many came back after N days.
Retention rate example
You start the quarter with 400 paying customers, gain 120 new ones and end with 460. Customer retention = (460 − 120) ÷ 400 = 85%, so you lost 60 customers — 15% churn. For visitors: of 2,000 people who first visited in the week of September 1, 160 came back within the first week: 8% day-7 retention.
Why retention rate matters
Retention is the base of every compounding growth model. A product that keeps 95% of customers each month and one that keeps 85% might look similar after a month; after a year, the first keeps 54% of a cohort and the second about 14%. It also decides LTV and therefore how much you can afford to spend on acquisition.
Common retention pitfalls
- Including new customers in the numerator, so growth hides churn.
- Mixing logo and revenue retention — keeping 90% of customers but losing your largest ones.
- Visitor retention without persistent ids. Cookieless tracking can't see returns after 24 hours.
- Wrong window. Weekly retention for a product people use monthly looks terrible and means nothing.
How VisitTrack measures retention
VisitTrack measures visitor retention: its Retention tab shows weekly first-seen cohorts and the share who returned at day 1, 7, 14 and 30. For customer and revenue retention, use your billing data — VisitTrack's attributed payments and refunds show which acquisition channels brought those customers, which is where retention by channel comes from. In cookieless mode, returning visitors after 24 hours count as new, so retention is limited.
Frequently asked questions
What is the difference between retention rate and churn rate?
They are complements over the same period and base: if you retain 85% of customers, your churn rate is 15%. Retention measures who stayed, churn measures who left.
What is a good customer retention rate for SaaS?
It depends on the customer segment and price point; products sold to larger businesses usually retain better than low-priced self-serve tools. Track monthly and annual retention by cohort and plan rather than relying on a single benchmark.
Related terms
- Churn rateChurn rate is the percentage of customers (or recurring revenue) that a business loses during a period, out of the customers (or revenue) it had at the start of that period.
- Cohort analysisCohort analysis is a method of grouping users by a shared starting event — usually the week or month they first visited or signed up — and comparing how each group behaves over the same time since that start.
- Net revenue retention (NRR)Net revenue retention (NRR) is the percentage of recurring revenue a business keeps from an existing group of customers over a period, after adding expansion and subtracting downgrades and churn, excluding new customers.
- Customer lifetime value (LTV)Customer lifetime value (LTV or CLV) is the total revenue — or, more usefully, gross profit — a business can expect from a single customer over the whole time they remain a customer.
- Activation rateActivation rate is the percentage of new sign-ups who reach a defined "activation" milestone — the first moment they get real value from the product, such as creating a first project or seeing their first data.
Tools and guides
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