During our last post of the PMs & Metrics series, we covered the details of the conversion rate. In today’s post, we’ll be going over another important metric that PMs should be familiar with – the customer retention rate.
The customer retention rate measures the proportion of customers that have continued to use your product over a period of time.
“Retention rate: proportion of customers that have continued to use your product over time.”There are two key phrases here to pay extra attention to – “continued to use” and “period of time.” Let’s break them down further.
“Continued to use” refers to customers that have been using your product, and does not include brand new customers. Keep this in mind because we’ll be seeing this concept again when we discuss the formula to calculate retention rate.