---
title: Retention Rate — definition & formula | RGM® Glossary
url: https://realgrowthmatters.com/glossary/retention-rate/
updated: 2026-06-10
source_html: https://realgrowthmatters.com/glossary/retention-rate/
---

# Retention Rate

re·ten·tion rate/rɪˈtɛn.ʃən reɪt/noun

The share of a cohort still active at the end of a period — retention, expressed as a number.

Term
:   Retention Rate

Part of speech
:   Noun

Field
:   Growth & Lifecycle

Also written
:   Customer retention rate

## Forms & parts of speech

retention rate · noun

The percentage of customers kept across a period.

"A 90-day **retention rate** of 70% is strong for our category."

retain · verb

To keep a customer active.

"Better onboarding helps us **retain** more of each cohort."

## Definition in plain terms

Retention rate puts a number on retention: of the customers you had at the start of a period, what share were still active at the end. It is the direct inverse of churn rate — a 95% monthly retention rate means a 5% monthly churn rate — and is usually measured by cohort to reveal the real trend.

## The mechanics

Take the customers at the start, subtract any new ones acquired during the period, count how many of the original group remain, and divide by the starting number. Measuring by cohort and at consistent intervals (day 30, 90, 365) keeps the comparison honest as the business grows.

## When it matters

Retention rate is the cleanest single read on whether a product delivers lasting value. Small improvements compound enormously: lifting monthly retention a couple of points can nearly double average customer lifetime, which in turn lifts lifetime value and the acquisition cost you can afford.

**Worked example.** A store has 1,000 customers at the start of the quarter, acquires 200 new ones, and ends with 1,050. Retention rate = (1,050 − 200) ÷ 1,000 = 85%. The 15% who lapsed are the quarter's churn — and the lever most worth pulling, since keeping them costs far less than replacing them.

**Failure modes to watch.** Forgetting to exclude newly-acquired customers from the end count (inflating the rate); reporting a blended rate that hides weak newer cohorts; and comparing rates measured over different windows as if they were equivalent.

## Formula

Retention Rate = ((E − N) ÷ S) × 100S = customers at start · E = customers at end · N = new customers acquired during the period. The inverse of churn rate.

## Benchmarks

Retention rate benchmarks depend heavily on model, contract length, and how "active" is defined.

B2B SaaS — annual

~90%+ is strong

Consumer subscription

~60–70%+ is healthy (varies)

Mobile app — day 30

Highly category-dependent

Calculators

[Related calculators →](/tools/churn-rate-calculator/)

Ranges are illustrative; every published figure is cited from a named public source or labelled “RGM analysis.”

## Synonyms & antonyms

### Synonyms

customer retention raterepeat ratestickiness

### Antonyms

churn rateattrition rate

## Origin & history

From "retention" (Latin *retentio*, "a holding back," from *retinēre*) plus "rate." The metric form spread with subscription and SaaS analytics, when keeping customers became as measurable as winning them.

Etymology: [Online Etymology Dictionary](https://www.etymonline.com/word/retention).

## Usage trends

Search interest for this term over the last five years:

[View interest-over-time on Google Trends →](https://trends.google.com/trends/explore?q=retention%20rate&date=today%205-y)

## Common questions

How do you calculate retention rate?
:   Take customers at the end minus new ones acquired, divide by customers at the start, times 100.

Is retention rate the opposite of churn rate?
:   Yes — they sum to 100% for the same period and cohort.

What is a good retention rate?
:   It varies by model; many B2B SaaS firms target ~90%+ annually. Compare to your own segment.

## Related tools & calculators

- calculator[Churn rate calculator](/tools/churn-rate-calculator/)
- calculator[Lifetime value calculator](/tools/ltv-calculator/)
- calculator[Net revenue retention calculator](/tools/net-revenue-retention-calculator/)

## Resources & people to follow

- book*Lean Analytics* — Croll & Yoskovitz
- thought leaderDavid Skok (For Entrepreneurs) — SaaS metrics
- thought leaderPatrick Campbell — pricing & retention research

Curated, non-competitor resources verified per term.

## Related training

- module[Subscription growth](/training/subscription-growth/)
- module[Marketing analytics](/training/marketing-analytics/)

## Disciplines

Areas of marketing where retention rate is a core concern:

[Growth marketing](/training/growth-marketing-foundations/)[Marketing analytics](/training/marketing-analytics/)[Subscription & SaaS](/training/subscription-growth/)

## Read next

## Related terms

[Retention](/glossary/retention/)[Churn rate](/glossary/churn-rate/)[Net revenue retention](/glossary/net-revenue-retention/)[Lifetime value](/glossary/lifetime-value/)[Cohort analysis](/glossary/cohort-analysis/)

## Sources

1. trends[Google Trends — "retention rate"](https://trends.google.com/trends/explore?q=retention%20rate&date=today%205-y)
2. etymology[Online Etymology Dictionary — "retention"](https://www.etymonline.com/word/retention)