[{"data":1,"prerenderedAt":173},["ShallowReactive",2],{"/blog/renewal-rate-vs-retention-rate":3},{"id":4,"title":5,"articleSection":6,"author":7,"body":8,"category":6,"coverBuilder":157,"cta":158,"ctaBody":157,"ctaTitle":157,"dateModified":157,"datePublished":159,"description":160,"draft":161,"extension":162,"hideCover":161,"image":163,"meta":164,"navigation":165,"ogImage":157,"path":166,"readTime":167,"seo":168,"sidebarCta":157,"stem":169,"tags":170,"wordCount":171,"__hash__":172},"blog/blog/renewal-rate-vs-retention-rate.md","Renewal rate vs retention rate: the differences","Retention","team-churnkey",{"type":9,"value":10,"toc":145},"minimark",[11,15,20,36,40,62,67,70,79,86,94,98,101,108,111,117,121,127,133,139],[12,13,14],"p",{},"The difference between renewal rate and retention rate lies in their focus and application:",[16,17,19],"h2",{"id":18},"renewal-rate","Renewal rate",[21,22,23,27,30,33],"ul",{},[24,25,26],"li",{},"This metric specifically applies to subscription-based models.",[24,28,29],{},"It measures the percentage of customers who renew their subscriptions at the end of a billing cycle.",[24,31,32],{},"Renewal rates focus on the ability to retain paying customers over time. It would include zombie/at-risk customers – those that pay but don't use.",[24,34,35],{},"Formula for Renewal Rate = Total Number of Eligible Customers / Number of Customers Renewing​ × 100%",[16,37,39],{"id":38},"retention-rate","Retention rate",[21,41,42,45,48,56,59],{},[24,43,44],{},"Retention rate is a broader metric that measures the percentage of users who continue to use a product or service over a given period.",[24,46,47],{},"It can span any defined period (monthly, annually)",[24,49,50,51,55],{},"It applies to ",[52,53,54],"strong",{},"both subscription and non-subscription models"," and reflects the overall ability to keep users engaged and active.",[24,57,58],{},"Retention rates include free users too.",[24,60,61],{},"Formula for Retention Rate = Number of Customers at End of Period / Number of Customers at Beginning of Period × 100%",[63,64,66],"h3",{"id":65},"consider-an-example","Consider an example",[12,68,69],{},"Imagine a SaaS company with 1,000 customers up for renewal at the end of the billing cycle, including 100 zombie users. Out of these, 800 customers renew their subscriptions.",[12,71,72,75,76],{},[52,73,74],{},"Renewal Rate"," = (800 / 1,000) × 100% = ",[52,77,78],{},"80%",[12,80,81,82,85],{},"If the same SaaS company has 9,000 free users, of which 3,000 are active, and excludes the 100 zombie users from the 800 renewing, the ",[52,83,84],{},"Retention Rate"," would focus only on active users. Assuming the company starts with 10,000 users (1,000 paying + 9,000 free) and ends with 3,700 active users (700 active paying + 3,000 free):",[12,87,88,90,91],{},[52,89,84],{}," = (3,700 / 10,000) × 100% = ",[52,92,93],{},"37%",[16,95,97],{"id":96},"how-churnkey-can-help","How Churnkey can help?",[12,99,100],{},"Churnkey is retention automation for self-serve subscription companies. Fix failed payments. Reduce cancellations. Increase ARR.",[12,102,103],{},[104,105,107],"a",{"href":106},"/","Explore Churnkey",[12,109,110],{},"Or, get started with free churn metrics. Simply connect your billing provider to see metrics you've never seen before.",[12,112,113],{},[104,114,116],{"href":115},"/churn-metrics","Free Churn Metrics & Subscription Analytics | Churnkey",[63,118,120],{"id":119},"additional-reading","Additional reading",[12,122,123],{},[104,124,126],{"href":125},"/blog/cohort-retention-analysis","Retention Cohort Analysis: Four Simple Ways",[12,128,129],{},[104,130,132],{"href":131},"/blog/retention-automation","Retention automation separates growth heroes from growth zeroes",[12,134,135],{},[104,136,138],{"href":137},"/blog/retention-metrics-to-reduce-churn-and-win-back-customers","Retention Metrics to Reduce Churn and Win Back Customers",[12,140,141],{},[104,142,144],{"href":143},"/blog/retention-curves","Customer Retention Curve: Calculator, Definition, Examples",{"title":146,"searchDepth":147,"depth":147,"links":148},"",3,[149,151,154],{"id":18,"depth":150,"text":19},2,{"id":38,"depth":150,"text":39,"children":152},[153],{"id":65,"depth":147,"text":66},{"id":96,"depth":150,"text":97,"children":155},[156],{"id":119,"depth":147,"text":120},null,"newsletter","2024-12-16","Renewal rate works for subscription businesses whereas retention rate works for all businesses. See the most important differences between the two and how to improve them.",false,"md","/images/blog/renewal-rate-vs-retention-rate/renewal-vs-retention.webp",{},true,"/blog/renewal-rate-vs-retention-rate","2 min read",{"title":5,"description":160},"blog/renewal-rate-vs-retention-rate",[6],353,"Noo019IYRFe7tEnF852jtoZ2ongwpQzXk_iqWfnExog",1786481501744]