Definition
Retention rate is the share of customers (or users) who stay over a period. Customer retention rate is about paying customers; product retention, usually shown as a cohort, is about people who keep using the product.
Formula
Customer retention rate = (customers at the end − new customers in the period) ÷ customers at the start × 100.
Subtracting new customers stops growth from hiding losses. Try the retention rate calculator.
Example
Start with 400, end with 430, of whom 60 are new: (430 − 60) ÷ 400 = 92.5%.
Product retention
Group users by when they started and count the share active in each later period. See cohort analysis.