Retention rate is a calculation of how many customers you keep at the end of a period versus how many you already had plus the number you acquired during that period.
Retention Rate (%) = (Number of Customers at End of Period − Number of Customers Acquired During Period) / Total Number of Customers at Start of Period
Let’s plug in some real numbers here as well:
- Number of customer at the start of the period: 1,000
- Number of customers acquired during the period: 250
- Number of customers at end of period: 1,100
Retention Rate = (1,110 − 250) / 1,000, or 85%.
- Customer LIfetime Value (CLV)
- Customer Lifetime Value Model
- Customer Acquisition Cost (CAC)
- Cost Per Acquisition (CPA)
- Return on Ad Spend (ROAS)
Book: The House of the Customer (2023) by Greg Kihlström