churn rate and retention rate

Difference Between churn rate and retention rate

Churn Rate and Retention Rate are very important in the field of digital marketing or you can say marketing customers are the most important factor whether they are existing one or a new one, customer effect on the company and on your strategy directly and indirectly.

We always start talking to run a campaign to give awareness, generate leads, etc to acquire the customers and we perform and develop all the strategies to make it successful and we become successful after acquiring new customers.

Imagine A company has a business of shampoo, they are in the marketing for being 10 years, they are doing well, suddenly they are planning to introduce new packaging for their shampoo brand and they design, execute and shampoo come to the market, and digital marketing team start their promoting and run their campaign, they run a campaign for one (01) month and their goals are getting maximum customers in the form of (Leads), they get 100 new leads, their campaign is successful.

But the campaign ends it’s not the end it’s the beginning to monitor and analyze what we lose and we earn in this particular time, then a most important term comes into the picture which is known as Churn Rate and Retention Rate.

Retention rate and churn rate both are very important in the marketing aspects and for the company as well, by calculating them you will actually get a number what you earn and what you lose during a certain period.

What is Retention Rate?

Retention rate is the number or average of customers you retain in a particular period.

  • The three important things you should consider are:
  • Number of users/customers at the end of the period (E)
  • Number of users/customers at the start of the period (S).
  • New customers during the period (N)

For example, before a campaign starts company A has 1000 customers, during the campaign company gets 100 more customers and at the end of the campaign, the customers are 1050.

So according to the formula:
(1050 – 100 / 1000) * 100 = 95% Retantion Rate (Impressive)

What is Churn Rate?


Retention rate is the number or average of customers you lose in a particular period.

  • The three important things you should consider are:
  • Number of users/customers at the end of the period (E)
  • Number of users/customers at the start of the period

For example, before a campaign starts company A has 1000 customers, and at the end of the campaign, the customers are 960.

So according to the formula:
(1000 – 960/ 1000) * 100 = 04% Churn Rate (Not Bad)

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