{"id":13391,"date":"2024-10-03T09:10:34","date_gmt":"2024-10-03T09:10:34","guid":{"rendered":"https:\/\/userpilot.com\/blog\/retention-kpis\/"},"modified":"2026-02-26T08:14:07","modified_gmt":"2026-02-26T08:14:07","slug":"retention-kpis","status":"publish","type":"post","link":"https:\/\/userpilot.com\/blog\/retention-kpis\/","title":{"rendered":"10 Customer Retention KPIs & Metrics + How to Improve Them"},"content":{"rendered":"

Data<\/a> shows that acquiring a new customer can be five to seven times more expensive than keeping an existing one. That’s why you should track customer retention KPIs with dashboard reporting tools<\/a> and prevent churn. This article will go over the following metrics and provide tips for improving them:<\/p>\n

    \n
  1. Customer retention rate<\/li>\n
  2. Monthly recurring revenue<\/li>\n
  3. Customer lifetime value<\/li>\n
  4. Product stickiness<\/a><\/li>\n
  5. Repeat purchase rate<\/li>\n
  6. Expansion MRR<\/a><\/li>\n
  7. Customer satisfaction score<\/li>\n
  8. Net promoter score<\/li>\n
  9. Customer health score<\/li>\n
  10. Revenue churn<\/a> rate<\/li>\n<\/ol>\n

    Customer retention KPI #1: Customer retention rate<\/strong><\/h2>\n

    Customer retention rate<\/a> measures the percentage of users who continued to use your product after their initial purchase. You can use it to determine if your product successfully keeps customers after you acquire them. As a rule of thumb, a high customer retention rate means high profitability.<\/p>\n

    To calculate the customer retention rate<\/a>, you need to calculate the number of customers at the end of the period minus the number of new customers acquired during the period, and divide that number by the total number of customers at the start of the period. Then, multiply by 100 to get your retention rate.<\/p>\n

    \"Customer
    User retention rate formula<\/figcaption><\/figure>\n

    How to improve the customer retention rate<\/strong><\/h3>\n

    Among effective\u00a0customer retention strategies<\/a>, the first and most important one is to personalize the onboarding for new customers to shorten the time to value.<\/strong><\/p>\n

    Firstly, you need to gather valuable data from new users using\u00a0welcome surveys<\/a>. This information will help you to understand the pain points of your users and identify their key \u2018jobs to be done<\/a>‘.<\/p>\n

    \"Welcome
    Welcome survey example<\/figcaption><\/figure>\n

    You can use the data you’ve gathered to\u00a0segment customers<\/a>\u00a0and trigger a\u00a0personalized onboarding experience<\/a>. This will decrease time to value and increase activation rates, which will help improve customer retention rate.<\/p>\n

    \"Trial
    Trial users segment<\/figcaption><\/figure>\n

    Customer retention KPI #2: Monthly recurring revenue<\/strong><\/h2>\n

    MRR refers to the revenue your product generates in a month, typically through subscriptions. This metric is used for forecasting, financial planning, and measuring a product’s growth rate<\/a> and momentum.<\/p>\n

    \"Customer
    MRR formula<\/figcaption><\/figure>\n

    To calculate the MRR, you need to first determine the average revenue per active account (ARPU). Then, multiply this value by the total number of monthly active accounts.<\/p>\n

    For example, if you have 6,500 active accounts and the average revenue per active account is $25, then your MRR is 6,500 * 25 = $162,500.<\/p>\n

    How to improve monthly recurring revenue<\/strong><\/h3>\n

    A higher MRR indicates higher customer retention and lower customer churn<\/a>. You can improve it through:<\/p>\n