What is customer retention rate?
Also known as: CRR, Logo retention
Customer retention rate is the percentage of customers you keep over a given period, excluding new customers acquired during that period. It is the complement of customer churn rate.
Formula
How to calculate customer retention rate
CRR = ((Customers at end − New customers acquired) ÷ Customers at start) × 100- Customers at end
- Total active accounts on the last day of the window
- New customers acquired
- Accounts added during the window — excluded so growth does not mask losses
- Customers at start
- Total active accounts on day one of the window
Worked example
You start the year with 500 customers, end with 560, and acquired 100 during the year. CRR = ((560 − 100) ÷ 500) × 100 = 92%.
Benchmarks
Typical customer retention rate ranges
Commonly reported ranges for B2B SaaS. Treat these as orientation — your own segment and contract structure matter more than any cross-industry figure.
| Segment | Typical range |
|---|---|
| B2B SaaS, annual (enterprise) | 93–95% |
| B2B SaaS, annual (SMB) | 75–85% |
| Agencies / servicesProject-based work retains differently than subscription | 70–85% |
In practice
What you need to know about customer retention rate
Why new customers are excluded
If you count acquisitions in the numerator without subtracting them, a fast-growing company can report high retention while quietly losing a large share of its existing base. Subtracting new customers isolates what actually happened to the cohort you started with.
Logo retention vs revenue retention
Customer retention rate counts logos, weighting a $2,000 account the same as a $200,000 one. Revenue retention weights by dollars. Most companies need both: logo retention reveals whether the product works broadly, revenue retention reveals whether the business is durable.
How to improve it
Improving customer retention rate
Instrument onboarding completion
Retention is largely determined in the first 30–90 days. Measure whether customers reach a defined activation milestone, and treat failure to reach it as a retention risk immediately rather than at renewal.
Build multi-threaded relationships
Accounts with a single point of contact churn at markedly higher rates, because one departure removes all institutional knowledge of your value. Track contacts per account as a retention metric in its own right.
Make renewal a process, not an event
Teams that begin renewal conversations 90–120 days out retain better than those starting at 30 days, because there is still time to fix problems that surface.
FAQ
Customer retention rate questions, answered
What is a good customer retention rate?+
Enterprise B2B SaaS companies typically target 93–95% annual logo retention. SMB-focused products commonly land at 75–85% because contracts are shorter and buyers more price-sensitive. Compare against your own segment rather than a blended industry average, since segment mix dominates the number.
How do I calculate retention rate if customers signed up mid-period?+
Use cohort analysis. Group customers by signup month, then measure each cohort separately at equivalent ages — month 3, month 6, month 12. Pooling cohorts of different ages into one period-based number systematically understates churn for fast-growing companies.
Is retention rate the same as renewal rate?+
No. Retention rate measures all customers over a calendar period. Renewal rate measures only customers whose contracts actually came up for renewal in that period. If only a third of your base renews in a given quarter, renewal rate describes that third and is the more actionable operating metric.
Where Aartha fits
Retention rate tells you the outcome. Aartha keeps a cited, time-aware memory of each account so you can see which relationships are drifting — and why — before it shows up in the number.
See the platformRelated terms
Keep reading
Churn rate
Churn rate is the percentage of customers who stop paying for a product during a given period. It is calculated by dividing the number of customers lost during the period by the number of customers at the start of that period.
Net revenue retention
Net revenue retention (NRR) is the percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn, but excluding new customer revenue. NRR above 100% means existing customers grew enough to more than offset all losses.
Gross revenue retention
Gross revenue retention (GRR) is the percentage of recurring revenue retained from existing customers over a period, counting churn and contraction but excluding all expansion. GRR can never exceed 100%.
Renewal rate
Renewal rate is the percentage of contracts up for renewal in a given period that were actually renewed. Unlike retention rate, it measures only the population whose contracts came due, which makes it the more actionable operating metric for teams managing a renewal book.
Customer health score
A customer health score is a composite metric that summarizes how likely an account is to renew, expand, or churn, calculated by weighting signals such as product usage, engagement, support history, and relationship strength into a single value.
Churn analysis
Churn analysis is the practice of examining lost customers to identify why they left, which segments are most affected, and which signals preceded the loss — so that retention effort can target causes rather than symptoms.
Your next account move is already in the signals
Know the metric. Know why it moved.
Aartha keeps a cited, time-aware memory of every account — so a health change or a churn signal comes with the evidence behind it.