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5 Top Customer Retention Metrics for SaaS Businesses

Customer retention management is the first and foremost priority of businesses. Therefore, companies right off the bat should keep an eye on it.

Sagacious approaches are the matter of right time and right choices. customer retention management you must have some calculations before you take the plunge to analyze it.

Customer retention, apart from tools, you need to know about the customer retention metrics and define them for your business. Every business, there are specific metrics. In this article, we are going to look at the customer retention metrics that will help you analyze customer retention.  They will also help you in maintaining business health.

How do measure customer retention metrics?

To measure customer retention, there are few metrics that are vital to them. Let’s look at them.

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Renewal rate

Renewal rate is the percentage of customers who subscribes to a service again before it ends or after it ends. It is important to retain the customers once you onboard customers to your business, product, and service.

The higher the renewal rate is the more you are able to retain your customers.

Renewal rate is dependent on customer satisfaction along with the value of product as they continue to use the product.

Measure renewal rate by dividing total number of customers that renewed subscriptions by total number of subscriptions.

Churn rate

Churn rate is another important customer retention metric. The churn rate is the percentage of customers who stop to buy the products or subscriptions. The churn rate is the kryptonite for business growth and business success. Churn can be of two types i.e., voluntary churn or involuntary churn. Whichever churn, losing customers is not what one wants and no business can revel if this happens.

It is entirely on businesses to select what timeline they want to elect for while calculating churn. You can either select monthly churn, yearly churn or any timeline you want to calculate churn.

To calculate the churn rate:

Subtract customers at the start of the month from customers at the end of the month and divide them by the total customers at the start of the year.

Customer lifetime value

Every customer you get brings a recurring revenue to your business and causes profit. Your business needs to have a greater customer lifetime value. Customer lifetime value determines the profit and amount of revenue that you get from the subscribers of the product.

Customer lifetime value must be greater than the Customer acquisition cost to achieve benefits for your business.

 To calculate your customer lifetime value:  Divide the average monthly recurring revenue you get from each user by the customer churn rate.


It is also abbreviated by NPS. This metric is usually done by creating surveys and sending them to the clients. It determines the percentage of how likely customers will promote your product or service to their acquaintances or ones they know.

The net promoter score is an easy metric to calculate. One just creates a survey and asks one question about the probability of promoting the product on a scale of 1 to 10.

You can set the scale to measure the net promoter score.

1-4: not likely to promote the product to others

5-7: might promote the score or might not be able to promote the score

7-9: high probability of promoting the product

If the results are not so good, improvements are necessary for good business health.

The higher the net promoter score, the higher you will be able to gain customers based on referral marketing.

Customer retention metric software for your SaaS or B2B Business

With a larger customer base, calculating metrics is impossible and nonpractical. For that, you would need customer retention software that does it all through automation.

SubscriptionFlow is a customer retention management platform and tool that executes all the processes required to measure customer retention rate.

The features and solution, this tool automatically calculates customer retention rate on the timeline you have set.

Not only this, this tool calculates churn scores, and churn factors, and generates surveys for customers. And it also is important to calculate the retention rate. Schedule a demo with SubscriptionFlow so that you can manage customer retention and manage tit seamlessly.

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