Retention Rate is the percentage of customers who continue their subscriptions over a given period. It is the inverse of churn rate and is crucial for understanding customer loyalty and the effectiveness of customer retention strategies. A high retention rate indicates that a business is effectively maintaining its customer base.

Retention Rate is calculated by dividing the number of customers retained at the end of a period by the number of customers at the beginning of the period.

1. Basic Example: A company starts the month with 1,000 customers and retains 950 customers at the end of the month. The retention rate is:

\begin{align} \text{Retention Rate} &= \frac{950}{1,000} \times 100 \cr&= 95\%\end{align}

2. Quarterly Example: A company starts the quarter with 5,000 customers and retains 4,750 customers by the end of the quarter. The retention rate is:

\begin{align}\text{Retention Rate} &= \frac{4,750}{5,000} \times 100 \cr&= 95\%\end{align}