In order to calculate the Customer Retention Rater, there are three pieces of information we need to use.
- E is the number of customer at the end of a period;
- N is the number of new customers acquired during that period;
- S is the number of customers at the start of that period.
We are interested in the number of customers remaining at the end of the period without counting the number of new customers acquired. Remaining customers can be calculated by subtracting N from E. To calculate the percentage, we divide that number by the total number of customers at the start and multiply by 100.
So, in formula, we have: ((E-N)/S)*100