What is retention rate?

Retention rate is the percentage of customers — or, more tellingly, revenue — you keep over a period; it is the inverse of churn. The revenue version, net revenue retention (NRR), includes expansion and can exceed 100%: keeping 95 of 100 customers but growing the survivors’ spend 15% yields roughly 110% NRR, meaning the business grows before adding a single new logo.

Retention is the quiet engine of compounding: two companies acquiring identically diverge enormously over five years on a few points of it. It is also a competitive scoreboard — every churned customer went somewhere, and win-loss analysis on the leavers shows whether you are losing to a named rival, a cheaper substitute, or “no longer needed.”