Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Calculate customer retention rate accounting for new customers added during the period.
85.00%
Customer retention rate measures the percentage of existing customers a business kept over a period -- calculated to exclude new customers acquired during that same period, so growth doesn't mask churn.
Enter customers at the start of the period, customers at the end, and new customers added during the period. Retention rate appears instantly.
Retention Rate % = ((Customers at End - New Customers) / Customers at Start) × 100
Consider a hypothetical membership site that begins the quarter with 100 customers. By the end it has 95 customers, but during the quarter it signed up 10 new ones. Those 10 newcomers are included in the ending count, so subtract them: 95 minus 10 leaves 85 original customers still present. Divide 85 by the starting 100 and you get a retention rate of 85.00 percent. The calculator loads these same numbers by default so you can see the calculation right away.
(95 - 10) / 100 x 100 = 85.00 percent
Notice how misleading the raw numbers are. The customer count only dropped from 100 to 95, which looks like a small 5 percent decline. In reality, 15 of the original 100 customers left, and new sales covered most of the gap.
If the result is above 100 percent, something is inconsistent in your inputs, most often because the new-customer figure is smaller than it should be or because reactivated former customers have been counted as continuing. If the result is negative, your new-customer number exceeds your ending count, which is not possible for a consistent dataset. The tool does not clamp or correct these cases, so a strange output is a signal to recheck the source numbers rather than a quirk to trust.
When you use this formula on the original starting group, retention and churn add up to 100 percent. In the example, 85 percent retained implies 15 percent lost. That fuller relationship is why this tool subtracts new customers before dividing. The simpler Churn Rate Calculator on this site takes the number of lost customers directly, which is cleaner if you already track cancellations individually.
Retention should be measured over a consistent time frame, such as a month, quarter, or year, and compared to the same frame later. A quarterly figure of 85 percent is not comparable with a monthly figure of 85 percent. Businesses with seasonal buying, such as gift or tax-related services, may see swings that reflect the calendar more than the quality of their service, so compare year-over-year where possible.
Remember that this measures customer counts, not revenue. If your larger customers behave differently from your smaller ones, supplement this figure with a revenue-based view.
Without it, strong new-customer growth could hide serious churn among existing customers -- subtracting isolates how many of your ORIGINAL customers you actually kept.
Retention rate = ((customers at end of period - new customers acquired during the period) / customers at start of period) x 100. Starting with 500, ending with 520 after adding 70 new customers gives (520 - 70) / 500 = 90%.
Retention only measures how many of your original customers stayed. Customers who joined during the period would otherwise hide the ones you lost.
Not for a consistent count. A result above 100% almost always means the new-customer figure is too low or the end count includes reactivated customers, so check your inputs.
For the same starting group, retention and churn add up to 100%. A 90% retention rate means a 10% churn rate.
Reference: Google Search Central