Retention
Retention refers to a company's ability to keep existing customers, employees, or clients over a specified period. In financial and operational management, retention is a critical indicator of customer loyalty, product-market fit, and business sustainability.
In SaaS and subscription businesses, customer retention rate is a key performance metric that reveals how well a company maintains its customer base relative to churn.
Customer Retention Rate Formula:
Retention Rate (%) = ((Number of Customers at End of Period - New Customers Acquired) / Number of Customers at Start of Period) × 100
Higher retention generally translates to improved recurring revenue, lower acquisition costs per customer, and stronger profitability, as retaining customers is typically less expensive than acquiring new ones.