Connect to IntercomRetention Rate
Customer Retention Rate measures the percentage of customers who continue using a product over a defined period, typically monthly or annually. It is the inverse of churn rate, but tracking it separately emphasizes what you're keeping rather than what you're losing. Support teams influence retention through resolution quality, response speed, and proactive outreach. High-retention teams typically have strong CSAT, low repeat contact rates, and proactive support programs that address friction before customers contact support.
Retention Rate = ((Customers at end of period − New customers acquired) ÷ Customers at start of period) × 100
This formula excludes new customer acquisition, measuring retention of the existing customer base only. Retention Rate + Churn Rate = 100% only when defined over the same customer base and period. A 98% monthly retention rate equals approximately 78% annual retention.
B2B SaaS, annual customer retention
Calculate your retention rate
- 1Reporting monthly retention when investors expect annual — 98% monthly sounds great but translates to only ~78% annual, which is mediocre for SaaS.
- 2Not segmenting retention by customer tier — enterprise and SMB retention diverge significantly and require different strategies.
- 3Attributing retention entirely to sales or CS without quantifying support's contribution — compare retention rates for customers with DSAT vs. satisfied customers to measure support's impact.
- 4Using gross retention instead of net revenue retention for financial reporting — net retention (which accounts for expansion revenue) is the metric investors care about most.