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If You Can’t Measure It, You Can’t Grow It

Your metrics aren’t just numbers—they’re building blocks.

Each one reveals how well your business is performing and where growth is being blocked.

Start here to fix what matters and scale what works.

Builders Block #9

Customer Retention Rate

_
Definitions.

The percentage of customers who continue to do business with your company over a specific period.

RELEVANCE:

Reflects customer loyalty and the effectiveness of your retention strategies.

CALCULATION

((Number of Customers at the End of the Period – Number of New Customers Acquired) / Number of Customers at the Start of the Period) * 100

BENCHMARK AGAINST

Compare your customer retention rate to industry averages or benchmarks to assess loyalty and retention efforts.

builders blocks relevance image

builders blocks benchmark

Storytime.

David ran a thriving online subscription service for gourmet food boxes. Every month, he delivered unique and high-quality ingredients to food enthusiasts. While he was happy to see new customers signing up, he was more interested in knowing how many stayed with his service month after month. This led him to focus on his Customer Retention Rate.

David calculated how many of his customers renewed their subscriptions over time. If he started with 100 customers and 90 of them stayed on the next month, his retention rate was 90%.

One day, his colleague, who ran a similar service, asked, “David, how do you ensure your customers keep coming back?”

David replied, “I focus on my Customer Retention Rate. It tells me how well I’m keeping my customers happy and loyal.”

His colleague realized that by understanding and improving this rate, she could build a more sustainable business.

David knew that a high Customer Retention Rate was key to long-term success, so he kept working to make his service even better for his loyal customers.

Doing
The math.

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Calculate Retention Rate

Number of Customers

How many customers at the end of the period being measured?

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New Customers Acquired

How many new customers were acquired during the measurement period?

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Beginning Customers

How many customers were there at the beginning of the measurement period?

Enter Value Here

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YOUR TOTAL POINTS

0

Other
Builders Blocks.

Marketing Return on Investment (ROI)

Marketing ROI measures the profitability of your marketing efforts. A positive ROI means your marketing strategies are paying off.

Gross Profit Margin

Gross Profit Margin reveals how much money you’re making after subtracting the costs of goods sold. It’s an important measure of your business’s core profitability.

Customer Retention Rate

This metric shows the percentage of customers who continue to do business with you over time. A high retention rate signifies loyalty and satisfaction.