Understanding key drivers of your retention and churn rates will help you deploy company resources from product development to sales / support team staffing.

Customer Retention Rate

The % of customers you retain over a period of time, also called Gross Logo Retention.

The Customer Retention Rate from the prior period is in the next period defined as:

of Customers at End of Period - # of New Customers Acquired During the Period / # of Customers at the Start of Period x 100

Alternatively, the number of customers retained from a period are:

of Customers at End of Period - # Customers Lost from Period in Next Period

and the retention rate is the

of Customers Retained / # of Customers at End of Period

Example:

Year	Beginning Customers	Customers Added	Customers Lost	End Customers
2020	1546	1522	298	2770
2021	2770	2482	347	4905

Year	Customer Retention Rate (Method #1)	Customers Retained	Customer Retention Rate (Method #2)
2020	=(4905-2482)/2770=87.5%	=(2770-347)=2423	=2423/2770=87.5%
2021	#NA()	=4905-#NA()= #NA()

A good target for annual retention rate of existing customers is 90%.

The Customer Churn Rate is 1 - Customer Retention Rate.

Revenue Retention Rate

The Revenue Retention Rate is a metric that measures the percentage of revenue a company retains from existing customers over a specific period of time. It helps businesses understand their ability to generate ongoing revenue from their customer base.

To calculate the Revenue Retention Rate, you can use the following formula:

Revenue Retention Rate = (Revenue at End of Period - Revenue from Lost Customers) / Revenue at Start of Period x 100

Alternatively, the formula can be expressed as: