customer retention metrics

Key Customer Retention Metrics to Track Regularly

Tracking Customer retention metrics can help you understand why your customers leave and how to retain users to grow your business. It can also help reduce churn rate and increase revenues. Here are the top 5 customer retention metrics you should monitor regularly.

Key Customer Retention Metrics to Track Regularly

Here are the top 5 customer retention metrics you should monitor regularly.

1. Customer Retention Rate

Customer retention rate is the percent of customers your business has retained over a specific period of time. Mostly, businesses measure monthly customer retention rate, that is, percent of customers retained over last 1 month.

Customer Retention Rate = (( E – N )/S) x 100

In the above formula,

  • E – no. of customers at the end of period
  • N – no. of customers acquired during period
  • S – no. of customers at the start of the period

So if you have 100 customers at the beginning, acquire 10 customers during last month and have 90 customers at the end of the month, the customer retention rate is ((90-10)/100) x 100 = 80%

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2. Churn Rate

Churn Rate is the percent of customers that abandon your business every month, or over a specific period of time.

It is one of the most important customer retention metrics for every business that depends on repeat business.

There can be various reasons for customers dropping off. It may be due to availability of cheaper alternatives, poor customer support, product bugs, service issues, etc.

So it is important to keep track of your churn rate, understand the reasons why your customers leave you, and fix them as quickly as possible.

Else churn rate will eat into all the hard-earned revenue growth.

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3. Monthly Recurring Revenue (MRR)

Monthly recurring revenue is another important customer retention KPI that allows you to measure the amount of repeat revenue your business is able to generate every month.

High monthly recurring revenue indicates that customers are happy with your products & services and find value in them.

To increase MRR, identify repeat customers and conduct a survey to understand what they like about your products & services, and offer more of it.

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4. Revenue Churn

Revenue Churn is loss of revenue over time. It is similar to customer churn rate but deals with revenue loss.

Many times customers may continue to do business with you, but downgrade their plans and contracts to cut costs. This can hurt your revenues.

So it is important to keep track of falling revenues. This will allow you to come up with up-sell promotions and offers to ensure that customers keep upgrading their plans over time.

You can track the above KPIs in a customer retention dashboard and share it with your team.

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What is a Customer Retention Dashboard

Customer Retention Dashboard is a visual display of user retention KPIs and metrics that allows you to get at-a-glance view of customer retention for your business. It is a great tool to regularly monitor user retention, and optimize it over time. You can share it with your team so they too can analyze customer retention and come up with strategy to retain customers.

Benefits of Customer Retention Dashboard

Here are the key benefits of Customer Retention Dashboard:

  • At-a-glance view of customer retention KPIs
  • Identify customer churn period
  • Find out which customer segments leave your business
  • Improve user retention
  • Measure impact of new business campaigns & strategy on customer retention

Here’s a customer retention dashboard created using Ubiq.

Ubiq makes it easy to visualize data in minutes, and monitor in real-time dashboards. Try it Today!


Sreeram Sreenivasan is the Founder of Ubiq. He has helped many Fortune 500 companies in the areas of BI & software development.