Retention rate
Retention rate is the percentage of customers (or users) who stay active, subscribed, or continue buying from a company over a defined time period.
In B2B sales, retention rate answers: “Of the customers we had at the start of a period, how many are still customers at the end?”
Why retention rate matters in B2B sales
Retention is not only a customer success metric. It is a sales metric because it changes the economics of growth:
- Predictable revenue: renewals reduce volatility in forecasting
- Higher lifetime value (LTV): stronger retention increases customer lifetime value
- More expansion upside: retained customers can grow seats, usage, and scope
- More credible proof: long-term customers create better case studies and references
In practice, a deal is not “won” when the contract is signed. It is won when the customer adopts, sees value, and keeps renewing.
How retention rate is calculated
Customer retention rate (CRR) formula
Use this version when you want to measure retention without “crediting” new customers gained during the period.
Retention rate (%) = ((Customers at end of period − New customers acquired during period) ÷ Customers at start of period) × 100
Example
- Customers at start: 100
- New customers acquired during the period: 20
- Customers at end: 105
Retention rate = ((105 − 20) ÷ 100) × 100 = 85%
Interpretation: 85 of the original 100 customers stayed.
Common types of retention rate
Retention rate can mean different things depending on what you measure. In B2B sales teams, it’s worth naming the variant every time.
1) Customer retention rate (logo retention)
What it measures: the share of customer accounts that remain customers.
Best for: account-based B2B, renewals, churn reduction.
2) User retention rate
What it measures: the share of users who return or remain active.
Best for: product-led growth, freemium, usage-driven adoption.
3) Revenue retention rate
What it measures: how much recurring revenue you retained from the same customer base.
Two common versions:
- Gross Revenue Retention (GRR): counts revenue kept excluding expansion (focuses on preventing loss)
- Net Revenue Retention (NRR): counts revenue kept including expansion (shows whether the base grows over time)
Retention rate vs related concepts people confuse
Retention rate vs churn rate
- Retention rate = % who stay
- Churn rate = % who leave
In the simplest case (same cohort, same period):
Retention rate + churn rate = 100%
Retention rate vs renewal rate
- Renewal rate is usually contract-focused (often annual renewals).
- Retention rate can be measured across many windows (monthly, quarterly, annually, usage-based).
Renewal rate is often a contractual view of retention.
Retention rate vs repeat purchase rate
- Repeat purchase rate measures how many customers buy again.
- Retention rate measures how many remain customers (or remain active), which may include non-purchase activity depending on your model.
Retention rate vs engagement
Engagement (content views, feature usage, stakeholder activity) is typically a leading indicator. Retention is the outcome.
In B2B, the important question is often: Is value understood by one contact or by the whole buying group? If adoption stays with a single champion, retention risk increases when that person gets busy, changes roles, or leaves.
What a “good” retention rate means
There is no universal “good” retention rate without context. It depends on:
- Contract length (monthly vs annual)
- Segment (SMB vs enterprise)
- Category (nice-to-have vs mission-critical)
- Implementation complexity (self-serve vs heavy onboarding)
A practical approach is to track retention trends over time and by segment, for example:
- Customer size
- Industry
- Acquisition source
- Product tier
- Onboarding completion
- Adoption across roles (admins, users, champions, finance/procurement)
Retention rate in a digital sales context
Retention improves when customers:
- Understand value quickly
- Adopt across the right people (not only one stakeholder)
- Find answers without waiting for a call or email
- See progress and next steps clearly
This is where a buyer-friendly “single place” approach helps after the deal too: the customer can revisit the agreed scope, onboarding materials, timelines, and ROI logic without hunting through threads.
Digital sales room tools like Noux (shared spaces for content, stakeholder visibility, and follow-up clarity) can support retention by reducing confusion and keeping momentum visible across the customer team.
Practical ways to improve retention rate
First 30–90 days (most retention is “earned” here)
- Define a success plan with milestones, owners, and dates
- Make onboarding content easy to access and always up to date
- Track who is actually engaging (not only who attends meetings)
- Confirm the customer can explain the value internally in one sentence
Ongoing lifecycle
- Provide a consistent place for updates, playbooks, and ROI materials
- Share meeting outcomes as short, searchable notes customers can revisit
- Reduce friction for the customer team to get answers fast
- Surface expansion paths only after core value is achieved
Common mistakes when using retention rate
- Mixing cohorts: comparing different starting groups hides real churn
- Ignoring segments: one segment can churn while another grows, and the average looks fine
- Measuring too late: retention is lagging; adoption signals earlier problems
- Using one unclear definition: align internally on logo retention vs user retention vs GRR/NRR
Quick checklist
Use this when someone asks “what is retention rate?” in a sales or revenue discussion:
- What is being retained? customers, users, or revenue
- What is the time window? month, quarter, year, contract term
- Is expansion included? yes (NRR) or no (GRR / logo retention)
- Is it cohort-based? same starting group measured over time
