How to Calculate Monthly Retention Rate

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Monthly Retention Rate Calculator

Calculate your Customer Retention Rate (CRR) accurately.

Monthly Retention Rate
0%
Churn Rate
0%
Customers Lost
0

How to Calculate Monthly Retention Rate

The Monthly Retention Rate (MRR) is a critical Key Performance Indicator (KPI) for SaaS companies, subscription boxes, and membership sites. It measures the percentage of customers who remained with your service over a specific month, excluding any new growth.

The Retention Rate Formula

To calculate your retention rate, you need three specific data points:

  • (S) Start: The number of customers you had on the first day of the month.
  • (E) End: The number of customers you had on the last day of the month.
  • (N) New: The number of new customers who signed up during that month.

The standard formula is:

Retention Rate = ((E – N) / S) × 100

We subtract new customers (N) from the end count (E) to isolate the original cohort. If we didn't do this, rapid new growth could mask a high churn rate.

Example Calculation

Imagine you run a software company:

  • You started May with 200 customers.
  • You ended May with 210 customers.
  • During May, you acquired 25 new customers.

Even though your total count went up by 10, let's look at retention:

  1. Customers Retained = 210 (End) – 25 (New) = 185
  2. Customers Lost = 200 (Start) – 185 (Retained) = 15
  3. Retention Rate = (185 / 200) × 100 = 92.5%

What is a Good Retention Rate?

For B2B SaaS, a monthly retention rate above 98% (less than 2% churn) is considered excellent. For B2C subscriptions, retention rates can vary widely but generally hover around 90-95% for healthy businesses. Consistently tracking this metric helps you understand product health and customer satisfaction.

function calculateRetention() { // Get input values var startCust = document.getElementById("customersStart").value; var endCust = document.getElementById("customersEnd").value; var newCust = document.getElementById("customersNew").value; // Convert to numbers var S = parseFloat(startCust); var E = parseFloat(endCust); var N = parseFloat(newCust); // Validation if (isNaN(S) || isNaN(E) || isNaN(N)) { alert("Please enter valid numbers for all fields."); return; } if (S <= 0) { alert("Customers at start of month must be greater than 0."); return; } if (N < 0 || E 100) { retentionRate = 100; churnRate = 0; lostCustomers = 0; // Data likely inconsistent but capping at logical max } // Update UI document.getElementById("mrrResults").style.display = "block"; document.getElementById("displayRetention").innerHTML = retentionRate.toFixed(2) + "%"; document.getElementById("displayChurn").innerHTML = churnRate.toFixed(2) + "%"; // Handle negative lost customers (implies data error input by user, but strictly mathematically valid in formula) if(lostCustomers < 0) lostCustomers = 0; document.getElementById("displayLost").innerHTML = lostCustomers; // Dynamic Explanation var explanation = "Analysis: You started with " + S + " customers. "; explanation += "After removing the " + N + " new acquisitions from your end total (" + E + "), "; explanation += "you successfully retained " + retainedCustomers + " of your original users. "; explanation += "This results in a " + retentionRate.toFixed(1) + "% retention rate."; document.getElementById("resultExplanation").innerHTML = explanation; }

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