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Retention Rate Formula:
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Retention Rate (RR) is a metric that measures the percentage of users, customers, or employees that remain with a company or service over a specific period. It indicates the ability to retain existing members while accounting for new additions.
The calculator uses the Retention Rate formula:
Where:
Explanation: The formula calculates the net retention by subtracting new additions from the ending count, then divides by the starting count and converts to percentage.
Details: Retention rate is crucial for businesses to measure customer loyalty, employee satisfaction, and overall sustainability. High retention rates typically indicate better service quality and customer satisfaction.
Tips: Enter the starting value, ending value, and number of new additions. All values must be valid (starting value > 0). The result will be displayed as a percentage.
Q1: What is a good retention rate?
A: A good retention rate varies by industry, but generally rates above 85-90% are considered excellent for most businesses.
Q2: How is retention rate different from churn rate?
A: Retention rate measures who stayed, while churn rate measures who left. They are complementary metrics (Retention Rate = 100% - Churn Rate).
Q3: What time period should be used for calculation?
A: Common periods are monthly, quarterly, or annually. The time period should be consistent for accurate trend analysis.
Q4: Can retention rate be over 100%?
A: Yes, if the number of retained users plus new users exceeds the starting count, retention rate can exceed 100%, indicating growth.
Q5: How often should retention rate be calculated?
A: Regular calculation (monthly or quarterly) helps track trends and identify issues early. Frequency depends on business needs and data availability.