Customer Retention Rate Calculator
Written by Thierno Sadou Diallo, formula verified per our methodology • Last checked on 9/9/2026
The retention rate is calculated with ((customers at end of period − new customers) ÷ customers at start of period) × 100. For 1,000 customers at the start of the period, 1,050 at the end, and 200 new customers acquired in between, the retention rate is 85%.
Explanation
The Customer Retention Rate (CRR) measures a business's ability to keep the customers it already had over a given period, independent of its ability to acquire new ones. The formula deliberately excludes new customers from the numerator: without this exclusion, a business that lost half its existing customers but fully offset that loss with new acquisitions would show a stable or growing total customer count, completely masking an underlying retention problem that's nonetheless real. By isolating new customers, the retention rate reveals the proportion of the starting customer base still active at the end of the period, a metric that complements but is distinct from acquisition and engagement measures already covered on this site, like marketing conversion rate or bounce rate, which measure different stages of the customer journey. A high retention rate is generally associated with better long-term profitability, since retaining an existing customer almost always costs less than acquiring a new one (see our customer acquisition cost calculator for that comparative cost) — which explains the growing attention paid to this metric in many business models, particularly those based on recurring subscriptions.
Example: 1,000 customers at the start, 1,050 at the end, 200 new customers
Inputs
Customers at start of period: 1,000. Customers at end of period: 1,050. New customers acquired: 200.
Calculation
Retention rate = ((1,050 − 200) ÷ 1,000) × 100 = (850 ÷ 1,000) × 100 = 85%.
Result
The retention rate over this period is 85%, meaning 150 of the original 1,000 customers were lost.
Frequently asked questions
Why exclude new customers from the calculation?
Because including new customers in the calculation would mask a real loss of existing customers behind an apparent growth in the total customer count. By excluding them, the retention rate measures only the loyalty of customers who were already there at the start of the period, information that tracking the total customer count alone can't isolate.
What is the difference between the retention rate and the churn rate?
These are two ways of looking at the same reality from opposite angles: churn rate measures the proportion of customers lost over a period (100% minus the retention rate, in its simplest form), while the retention rate emphasizes the proportion of customers kept. The two metrics are complementary and often presented together in a customer tracking dashboard.
Is a good retention rate the same across all industries?
No, what counts as a satisfactory retention rate varies widely by industry and business model: subscription businesses (software, media) often aim for high monthly or annual retention rates, while industries with more occasional purchases (durable goods, certain services) can have naturally longer loyalty cycles and different benchmarks for comparison.