How to calculate retention rate
Calculate the retention rate by dividing the number of customers at the end of a period (minus new customers during that period) by the number of customers at the start of the period.
Customer Retention Rate = (Customers at the end of a month – New customers in a month) / Customers at the start of the month.
For example, if you have 200 customers at the beginning of January, you added 40 new customers in the same month and 20 customers churned, you would have 220 customers at the end of the month. Your retention rate would therefore be 90%. ( (220-40) / 200) = 90%
How to improve retention rate
• Learn from churned customers
• Reward people to upgrade
• Make upgrading to higher plans easy
• Provide value regularly
• Improve and expand your service