Customer Retention Rate

Customer retention rate is a crucial marketing metric that many consider the lifeblood of any successful business. It speaks volumes about the quality of your product or service, the effectiveness of your customer service, and the strength of your relationship with your customers.

In fact, studies show that retaining existing customers is less expensive and more profitable than acquiring new ones. 

To calculate the customer retention rate, you’ll need to subtract the number of new customers gained during a specific period from the total number of customers at the end of that period. Then, divide the result by the total number of customers at the beginning of the period, and multiply by 100 to get the percentage. In the software and services industry, a high retention rate signifies customer satisfaction, recurring revenue, and profitability. 

Customer Retention Rate = [(End customers – New customers) / Start customers] * 100

Some marketing campaign strategies that target existing customers are: 

  • Personalized Emails: Using customer data to tailor emails increases engagement. An example could be sending a discount code on a product that the customer frequently purchases.
  • Loyalty Programs: These act as an incentive for customers to stick around. Rewarding customers for their loyalty can motivate them to continue doing business with you.
  • Exclusive Offers: Special deals or early access to new products can make customers feel valued and appreciated, encouraging them to remain with your brand.

Customer Retention Rate Calculator

The values you enter into this calculator are not saved or stored in any way.

Scroll to Top