16 Must-Track Customer Retention Metrics for Growth (2024)

12 Must-Track Customer Retention Metrics for Growth (2024)

Customer retention metrics serve as an essential check into your business’ health. These data points provide insights into how much revenue your business retains each month, whether it can survive its current churn rate, and how well your organization converts contract renewals.

The most obvious way to measure customer retention is to calculate direct retention metrics, such as retention rate and customer churn. 

But these metrics only tell you the rate at which you retain and lose customers — they fail to paint a more detailed picture about the revenue attached to those customers, why customers do and don’t churn, and other important factors related to retention.

In this article, we’ll explore the essential customer retention metrics to measure your product’s stickiness, your business’s growth potential, and the value of your existing customers.

What Are Customer Retention Metrics?

Customer retention metrics are KPIs that businesses use to track the number of customers they retain over a given period. These metrics can help businesses understand how well they are retaining their customer base, identify potential issues that may be causing customers to leave, and develop strategies to improve retention performance and upselling.

16 Important Customer Retention KPIs and Metrics to Track in 2024

Let’s explore 16 of the most important customer retention metrics to track, with examples, formulas, and how to improve each metric.

1. Customer churn rate

Customer churn rate is the percentage of customers who cancel their product subscription during a given period.

High churn rates indicate your product isn’t sticky or valuable enough for customers. Churn is also a barrier to business growth — no matter how many customers you acquire, a high churn rate means you’ll quickly lose most of them.

How to calculate customer churn rate

(Number of churned customers during a given period / Number of total customers at the start of the time period) * 100

Example of customer churn rate

Let’s say you have 50 customers at the start of the month and 25 at the end of the month. This means your churn rate is 50%.

This is one of the simplest ways to calculate churn. However, your business may calculate churn differently depending on how you define a churned customer, the time period you consider, the seasonality of your business, and the difference in the behavior of different customer segments. 

The average churn rate is highly dependent on industry and product type. For example, a mobile app has a much higher churn rate than a B2B software-as-a-service (SaaS) platform. However, a healthy churn rate is typically between 2% and 8%.

How to reduce customer churn rate

To reduce your churn rate, you need a solid customer retention strategy. Here are five steps to help you retain more customers and reduce churn:

Reduce your churn rate with better in-app training and support

2. Customer retention rate

Customer retention rate is the percentage of customers who continue paying for your product for a given period. Customer retention is also called logo retention or user retention.

A high customer retention rate indicates your business can grow revenue month over month because churn is less of an issue.

How to calculate customer retention rate

(Total customers at the end of a time period – New customers acquired during that time period) / Existing customers at the start of the time period * 100

Example of customer retention rate in practice

Let’s say you have 50 customers at the beginning of the month and 46 customers at the end of the month. Out of these, six are new customers you recently acquired. This means your business retained 40 customers in the month. Thus, your retention rate becomes 80%.

Software companies targeting enterprises must have a logo retention rate of 90%, while those targeting small and medium-sized businesses must retain at least 75% of their customers.

How to improve customer retention rate

Interactive walkthroughs are an effective way of increasing customer retention. Customers gain a better understanding of how the product works and are more likely to engage with the product and adopt new features when there is less confusion.

Personalized onboarding flows are another option. You can use welcome screens to greet new customers and help them understand their responsibilities and tasks.

With Whatfix, drive retention with in-app guidance and product-led growth strategies. With Whatfix’s no-code editor, product teams can create, analyze, and test onboarding flows, feature launches, user flows, and product experiences to reduce time-to-value, improve customer adoption, and create product evangelists.

3. Net MRR churn rate

Net monthly recurring revenue (MRR) churn rate is the percentage of revenue you lose in a month from cancellations and downgrades after considering revenue from existing customers through upgrades or expansions.

Net MRR churn rate tells you how much revenue you lose in a month after considering account expansion. Your net MRR churn also helps you understand if growth in your existing customer base is strong enough to offset losses from churn.

How to calculate net MRR churn rate

(MRR churn in a month – Expansion in the same month) / MRR at the start of the month * 100

Ideally, your net MRR churn rate should be zero or negative. If net MRR churn exceeds zero, you’re losing revenue faster than your existing customer base adds revenue.

How to reduce net MRR churn rate

To reduce your MRR churn rate, you need to understand the reasons behind it. With churn surveys, you can ask customers what made them cancel their subscriptions. This will help you identify the friction points so you can fix them before churn rates increase.

4. Gross MRR churn rate

Gross MRR churn rate is the percentage of revenue lost due to total cancellations or downgrades in a month. Gross MRR churn rate is usually greater than net MRR churn rate, as it doesn’t factor in expansion from existing customers.

Your gross MRR churn rate gives you an unfiltered view of monthly revenue loss.

How to calculate gross MRR churn rate

Total MRR churn in a month / Total MRR at the start of the month * 100

As per investor Alexander Bruehl, “If the Gross MRR Churn is above 1% to 2%, there seems to be an issue with the product or the ROI [return on investment] story.”

Alexander Bruehl
“Lots of churn definitions out there. It all boils down to a low Gross MRR Churn as this number indicates if a business is healthy. Net MRR can be 'improved' by expansion and new logos, but if the Gross MRR Churn is above 1-2% there seems to be an issue with the product or the ROI story.”



How to reduce gross MRR churn rate

Have a product development process in place to help identify reasons for churn. Churn surveys work well for many SaaS companies as they ask customers to choose the most significant reason they’re churning and the most minor reason. These are extremely powerful because they allow you to pinpoint your biggest areas of opportunity.

5. Net dollar retention rate

Net dollar retention rate, also called net revenue retention rate, is the opposite of net MRR churn rate. Net revenue retention rate is the percentage of recurring revenue retained from customers for a given period after factoring in upgrades, cancellations, downgrades, and pause requests.

Net dollar retention helps you gauge how well your business retains revenue from existing customers and how well your upselling and cross-selling strategies are working.

How to calculate net dollar retention rate

(MRR at the start of a given period + upgrades during that period – downgrades – churn) / MRR at the start of a period * 100

Ideally, the net dollar retention rate should be greater than 100%, which means your business retains more revenue than it loses in a given month. 

Here are some common net dollar retention rates for SaaS businesses:

How to improve net dollar retention rate

To improve your net dollar retention rate, focus your resources on increasing account expansion through upsells and cross-sells and reducing churn. Some ways to get started may include:

  • Prompt users to upgrade
  • Use contextual in-app messages
  • Use NPS surveys
  • Provide an in-app customer help center

6. Gross revenue retention rate

Gross revenue retention rate measures the percentage of revenue retained over a given period without factoring in upgrades. Gross revenue retention is also called gross dollar retention or gross MRR retention.

Gross revenue retention tells you how well you can maintain existing revenue, even if none of your customers upgrade to higher plans. If gross revenue retention is low, churn and cancellations are eating into your monthly revenue, and you need to ramp up your retention efforts.

How to calculate gross revenue retention rate

(MRR at the start of a given period – downgrades – churn) / MRR at the start of a period * 100

Example of gross revenue retention rate in practice

If you start with $1,000 in a month and lose $300 due to churn and downgrades, you’re left with $700 in MRR in the end. So, your gross MRR retention rate is 70%.

If you don’t lose any recurring revenue in a month, your gross MRR retention will be 100%, which is the maximum value for this metric. The median gross revenue retention rate for SaaS is 80-90%.

How to improve gross revenue retention rate

You can influence your customers’ decisions to prevent them from canceling or downgrading their subscriptions or contracts.

Consider the following tips to improve your GRR:

  • Improve the overall experience of your customers
  • Build trust in your brand and your product
  • Add more value to your product to make it more valuable to your customers
  • Have an active customer success team

7. Customer lifetime value (CLTV)

Customer lifetime value (CLTV) represents the amount of money you expect customers to spend throughout their relationship with your business.

Your business may cater to wide-ranging customer segments, and lifetime value helps you gauge which customer groups are most profitable for your business and, thus, most worthy of your retention efforts.

How to calculate customer lifetime value (LTV)

Average revenue per account during a time period / Customer churn rate during the same time period

Since customer churn isn’t always linear and you may also experience expansions along the way, this is only a simplified formula that gives you a rough estimate of customer LTV.

How to improve customer lifetime value

A strong customer onboarding process helps to increase customer lifetime value. With thorough onboarding, customers can become more familiar with new features and relate them to their use cases.

To develop an engaging onboarding process, leverage onboarding UX components like checklists, user onboarding flows, and tooltips. 

With Whatfix, product and customer success teams can create in-app guidance such as product tours, interactive walkthroughs, tooltips, and more – all in a no-code editor.

8. Expansion MRR rate

Expansion includes upsells, cross-sells, add-ons, and reactivation. Expansion MRR rate is the percentage of additional revenue you gain from existing customers for a given month.

High expansion MRR helps you offset losses from cancellations and downgrades.

How to calculate expansion MRR rate

(Expansion MRR at the end of the month – Expansion MRR at the start of the month) / Expansion MRR at the beginning of the month * 100

Expansion MRR should ideally be greater than churn MRR for a given period to build a sustainable business.

How to improve expansion MRR rate

Upselling is a fundamental tactic behind increasing your expansion MRR. If you do it right, upselling can also increase your brand loyalty because customers who buy more already love your product.

9. Daily/Weekly/Monthly active users (DAU/WAU/MAU)

Daily active users (DAU), weekly active users (WAU), and monthly active users (MAU) are user engagement metrics that tell you how many customers use your product regularly. By keeping a pulse on DAU, MAU, and WAU, you can proactively monitor product usage, nudge inactive users to use your product more often, and prevent churn.

To calculate DAUs, MAUs, and WAUs, define what “active user” means for your SaaS business. For example, for a business chat app like Slack, an active user could mean someone who opens the app, clicks on unread chats, and sends messages.

Once you define active users for your product, calculate engagement metrics depending on how often your app should ideally be used.

For instance, for a social media app that could be used daily, DAU is an ideal measure of retention, while WAU is a perfect measure of stickiness for a grocery shopping app that may be used weekly. MAU is a good metric to track for an app with monthly usage, such as an employee payroll app

How to calculate DAU, WAU, MAU

  • DAUs: Number of users who use your product daily
  • WAUs: Number of users who use your product weekly
  • MAUs: Number of users who use your product monthly

Use DAUs, WAUs, and MAUs to track retention trends for your business. If your active users decline from one month to the next, proactively help inactive users find value in your product to boost usage.

How to improve DAU/WAU/MAU

To improve your DAU, WAUs, and MAUs, focus on improving your product stickiness. You can do so by:

  • Developing engaging user experiences
  • Improving feature adoption rates
  • Creating proactive upsell strategies and introducing existing users to more features
  • Using customer satisfaction surveys to collect feedback, identify friction points, and improve feature offerings

10. Net promoter score (NPS)

Net promoter score is the percentage of customers likely to recommend your product (or promoters) minus the percentage of customers unlikely to recommend your product (detractors).

An NPS survey includes a single question, “How likely are you to recommend us to a friend?” Customers must choose from a scale of one to 10, where one means they’re unlikely to recommend a product, while ten indicates they’d be happy to recommend it.

A positive NPS score means your current customers are satisfied with their overall product experience and likely to become product advocates.

How to improve customer retention rate

% of promoters (customers who give you a score of 9 or 10) – % of detractors (customers who give you a score of 0 to 6)

For B2B software and SaaS companies, the average NPS is 30.

How to improve NPS

Add a qualitative question to the survey to improve your net promoter score and uncover users’ logic behind the score. This can help you identify why your customers might or might not promote your product.

Once you have these answers, follow up with the respondents by contacting them via email or inviting them for a call to learn more about their concerns.

11. Customer satisfaction score (CSAT)

Customer satisfaction score (CSAT) is the percentage of customers who are happy with your product or customer service experience.

CSAT surveys ask customers to rate a business on a scale of 1 to 5 based on the following question: “How satisfied were you with our product/service?”

Like NPS, CSAT is another metric that can be used to get a pulse on customer experience and gauge retention.

How to calculate CSAT

Number of customers who rate your company 4 or 5 on a CSAT survey / Total number of customers who take the survey

For software companies, CSAT generally hovers around:

How to improve CSAT

Customer satisfaction means meeting – and ideally exceeding – customer expectations throughout their entire customer journey. When you prioritize learning your customer’s needs, you can provide them with the best customer service possible. 

Here are some ways to improve your customer satisfaction score:

  • Be responsive
  • Launch an omnichannel customer service strategy
  • Train staff to understand your products and services
  • Collect customer feedback
  • Invest in self-service tools

12. Customer renewal rate

Customer renewal rate is a highly relevant customer success metric for SaaS businesses that follow a subscription-based model. It measures the percentage of customers who renew their subscription at the end of the subscription period.

A high customer renewal rate implies stable, recurring revenue from current customers. In turn, this allows you to focus more on acquiring new customers.

How to calculate customer renewal rate

Number of customers who renewed their contract / Number of customers up for renewal

How to improve customer renewal rate

To encourage repeat purchase frequency, consider offering incentives, discounts, and other small rewards to boost loyalty and turn them into loyal customers.

You can also use modals to improve your relationship with existing customers by greeting them, sending personalized messages, and giving them rewards.

13. Customer effort score (CES)

Customer effort score (CES) evaluates how easily customers can complete an intended action, such as buying a product, resolving a service issue, or acquiring information. This metric is important because when customers have to put in less effort to achieve their goals, it can lead to higher satisfaction and loyalty.

How to calculate CES

Sum of all CES scores / Number of responses

How to improve CES

To enhance your customer effort score, simplify customer interactions across your service or product offerings. This could mean streamlining processes to make them more intuitive, incorporating customer feedback to reduce effort, and expanding self-service options. Offering comprehensive FAQs and efficient chatbots can lower the effort required from customers, improving their overall experience and satisfaction.

14. Product adoption rate

Product adoption rate indicates the percentage of customers who start using a product after its acquisition. This metric helps businesses understand how well the product is being accepted by the target audience and can indicate the effectiveness of onboarding processes.

How to calculate product adoption rate

(Number of new users actively using the product / Total number of new users in the period) x 100%

How to improve product adoption rate

Improving product adoption rate can be done by developing a robust onboarding process that guides users through the product’s key features and benefits. Supplement this with educational content such as tutorials and webinars to help users get the most out of the product.

15. Repeat purchase rate

Repeat purchase rate (RPR) measures the percentage of customers who have made more than one purchase over a specific period. This metric is a key indicator of customer loyalty and the effectiveness of your retention strategies.

How to calculate repeat purchase rate

(Number of customers who made more than one purchase / Total number of customers ) x 100%

How to improve repeat purchase rate

Implementing loyalty programs that reward customers for their continued business can be highly effective in improving repeat purchase rate. Tailoring marketing efforts through personalization based on customer preferences and purchase history ensures each communication feels relevant and valuable to the customer.

16. Customer health score

Customer health score is a composite metric used to gauge the overall health and potential long-term value of a customer relationship. It combines various indicators such as product usage, customer satisfaction, and engagement levels to predict customer loyalty and potential churn.

How to improve customer health score

Enhancing customer health score involves offering proactive customer support to anticipate and solve problems before they impact the customer. Engage customers regularly through well-thought-out programs or check-ins to maintain and increase their activity levels. Continual product improvements, driven by customer feedback and usage data, are vital to keep the score high, indicating healthy, satisfied, and engaged customers.

The Importance of Tracking Customer Retention Metrics

Customer retention is an essential indicator of the overall health of a business. On the one hand, if a business is losing several customers, it may not be providing the products or services that customers want, or users may be experiencing problems with its customer service. On the other hand, if a business has a high customer retention rate, it’s likely meeting customer needs and providing a positive customer experience.

Customer retention metrics can also help businesses identify areas of opportunity for improvement. For example, if your customer retention rate is low in a particular region or among a particular demographic, you should focus on improving your products or services in that area to meet the needs of those customers better.

Tracking customer retention metrics can also help to identify high-value customers. These customers are loyal to the business and significantly contribute to the bottom line. Businesses can increase their revenue and profitability by identifying and targeting these customers.

Overall, tracking customer retention metrics is an essential part of managing and growing a business as it can help businesses understand their customers and make data-driven decisions to improve their products, services, and customer experience.

Best Tools for Tracking Customer Retention Metrics in 2024


1. Mixpanel

G2 Rating: 4.8 out of 5 stars

Price: Free trial available, $20/month for Growth plan, contact for Enterprise plan pricing


Mixpanel specializes in user behavior analytics and is widely populary thanks to its detailed tracking capabilities. It allows businesses to track how users interact with their product and analyze data through custom reports and dashboards. Mixpanel’s event-tracking functionality makes it a powerful tool for understanding customer retention, measuring engagement levels, and identifying trends over time.


Key features:

  • Event tracking: Allows businesses to track any action users take within their application, such as clicks, form submissions, or time spent on a page. This granularity helps identify which features keep users coming back.
  • Retention analysis: Offers detailed retention reports that show how often users return and engage with your product after their first visit. This can be segmented by behavior, acquisition source, and other factors.
  • Funnel analysis: Businesses can identify where users drop off and optimize those stages to improve retention by analyzing how users move through conversion funnels.
  • Custom dashboards: Users can create custom dashboards to monitor key metrics related to customer retention, such as churn rate, customer lifetime value (CLV), and repeat purchase rate, all in real time.

2. Amplitude

G2 Rating: 4.5 out of 5 stars

Price: Free Starter plan available, contact for higher tiered package pricing


Amplitude provides extensive analytics focused on user engagement and retention. It helps businesses track the customer journey, understand user actions, and segment users based on behavior. With its retention analysis features, companies can dive deep into what keeps customers coming back and identify areas where users drop off.

Key features:

  • Behavioral cohorting: Amplitude enables the segmentation of users based on specific behaviors, making it easier to analyze how different groups of users engage and retain over time.
  • Real-time analytics: Provides real-time insights into user behavior, allowing businesses to quickly identify trends and adjust strategies to improve retention.
  • Predictive analytics: Utilizes machine learning to predict future user actions based on past behaviors, helping businesses to proactively engage at-risk users before they churn.
  • Path analysis: Helps in understanding the paths users take within the app or website, identifying the most common journeys that lead to long-term retention.
customer.io logo

3. Customer.io

G2 Rating: 4.4 out of 5 stars

Price: $100/month for Essentials plan


Customer.io allows for advanced segmentation, automated campaigns, and detailed analytics, making it invaluable for engaging and retaining customers. By leveraging data from user activities, businesses can create personalized communication strategies to increase customer loyalty and reduce churn rates.

Key features:

  • Behavioral targeting: Allows for the creation of dynamic segments based on user behavior, enabling highly personalized and timely communication strategies aimed at increasing retention.
  • Automated campaigns: Enables the automation of targeted messages based on user actions or inactions, such as onboarding sequences, re-engagement emails, and retention campaigns.
  • A/B testing: Offers A/B testing capabilities for emails and messages, helping to optimize communication strategies for better engagement and retention.
  • Integration with analytics: While primarily an engagement tool, Customer.io can integrate with analytics platforms to enrich user profiles with retention-related data, enhancing personalization and targeting efforts.
Drive customer engagement and retention with Whatfix

Whatfix is a unique partner that enhances customer retention by creating more user-centric experiences that drive adoption and retention.

Its digital adoption platform enables customers and end-users with contextual in-app guidance and moment-of-need support, like Tours, Flows, Task Lists, Self Help, and more.

Whatfix helps significantly reduce customer effort, increase product adoption rates, and ultimately contribute to a healthier customer retention rate. Whatfix’s analytics provide critical insights into how users interact with your product, enabling you to tailor experiences that not only meet but exceed customer expectations.

As businesses strive to keep pace with the evolving demands of their customers, leveraging Whatfix can complement your data-driven strategies, ensuring that every customer interaction with your product is meaningful, satisfying, and effortlessly engaging.

Analyze end-user behavior to understand how customers are engaging and adopting your products and services. Use it to identify areas of user friction and overcome these areas with additional in-app support.

In the dynamic world of customer retention, having a partner like Whatfix can be the catalyst that propels your business toward achieving its growth objectives, making every customer journey a testament to your commitment to excellence and continuous improvement.

Take the first step towards reducing churn and improving customer satisfaction. Explore Whatfix today.

Dive deeper with more customer retention & growth content.
Are you looking to become a more data-driven product manager? Explore our product analytic-centric content now.
What Is Whatfix?
Whatfix is a digital adoption platform that provides organizations with a no-code editor to create in-app guidance on any application that looks 100% native. With Whatfix, create interactive walkthroughs, product tours, task lists, smart tips, field validation, self-help wikis, hotspots, and more. Understand how users are engaging with your applications with advanced product analytics.
Like this article? Share it with your network.
Subscribe to the Whatfix newsletter now!
Table of Contents
Software Clicks With Whatfix
Whatfix's digital adoption platform empowers your employees, customers, and end-users with in-app guidance, reinforcement learning, and contextual self-help support to find maximum value from software.

Thank you for subscribing!

Sign up for the Digital Adoption Insider by Whatfix
Join 400,000+ monthly readers and receive best practices, expert insights, and insider tips for driving technology adoption and enabling end-users.