How to Calculate & Improve Retention Rate [Easy Calculator]

retention rate

Most, if not all, businesses seek to engage and retain customers to remain afloat and thriving. Each business may take a different approach, so it’s essential to understand what works best for your company to avoid losing customers to the competition. So how do you improve your retention rate?

To improve retention rate, offer a great onboarding experience, provide quick support, create clear and concise tutorials, and use in-app banners and emails to inform customers about new features. In addition, track how different strategies perform to learn what keeps customers returning.

This post will describe a six-step process that can help you identify areas that need improvement and strategies you can implement to boost retention. I’ll also describe some common causes of low retention rates. Let’s get started!

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Calculate Retention Rate

Customer Retention Rate Calculator

How to Improve Retention Rate

1. Understand the reasons for low retention rates

The first step in improving your retention rate is to understand why it is low in the first place. After all, you can’t fix a problem if you don’t know what’s causing it. Some possible factors to consider include the following:

  • Poor onboarding experience or user interface.
  • Lack of customer support or technical issues.
  • Inadequate marketing efforts and messaging.
  • Company changes or other unexpected events, such as product updates or changes in management.

2. Identify areas that need improvement

Once you’ve identified the possible causes of low retention rates, your next step is to pinpoint specific areas that need improvement. 

For example, if poor onboarding appears to be a factor, you might focus on improving the user interface and the experience of using your product or service. Or, if customer support seems to be an issue, you might consider increasing the availability and quality of your customer support services.

3. Implement changes to improve the retention rate

Once you’ve identified areas that need improvement, the next step is to implement specific strategies or solutions to help boost your retention rate. That way, you can start to see some positive results and begin building a more loyal customer base. Some possible strategies to try include the following:

  • Offering free trials or other incentives, such as discounts or special features, to encourage customers to stick with your product or service.
  • Providing quick and easy access to support resources, including help articles, FAQs, live chat support, and more.
  • Making it easy for customers to provide feedback or ask questions, either through surveys or by engaging directly with customer support staff.
  • Educating customers about your product or service through tutorials and other resources.
  • Reducing same-day uninstalls by providing more helpful information and resources before sign-up.
  • Reducing longer-term uninstalls by actively listening to customer feedback and quickly addressing any concerns or issues.

For more insights into the ways to improve retention rate, check out this video by Battle Plan Marketing:

4. Evaluate the results of the changes made

Once you’ve implemented your changes or improvements, it’s essential to evaluate the results and see how they’re impacting your retention rate. That can help you determine whether further tweaks or adjustments are needed, as well as identify what’s working well and what could be improved upon in the future.

For example, if your customer support strategy results in more satisfied customers and a lower churn rate, you might consider expanding or extending the program to help even more users. Or, if your onboarding process leads to higher activation rates for new users, you might focus on further streamlining that experience in the future.

5. Monitor retention rates over time

Regardless of whether your changes have increased retention or not, it’s important to continue monitoring your retention rate over time. That way, you can identify any long-term trends and make adjustments as needed to improve customer engagement and loyalty.

For example, if your retention rate drops during a seasonal sale or other promotion period but regains its previous momentum after the event concludes, you might want to consider adjusting your promotional strategy for future sales events.

Note: If your retention rates are declining over time despite the changes made, it could indicate an issue with your product or service itself, and you may need to invest more heavily in research and development efforts.

6. Experiment with different strategies and tactics

As you continue to monitor and evaluate your retention rate, you’ll want to keep experimenting with different strategies and tactics. By doing this, you can identify what’s working best for your business and target market and continue to improve your retention rate over time.

For example, you might try experimenting with different incentives, such as offering special discounts to customers who upgrade their plans or purchase multiple products, while testing new approaches to support and onboarding.

You can also try developing your own customer research or feedback programs to uncover additional insights into what your customers need, want, and expect from your product or service. For instance, you could send out brief customer surveys, host customer Q&A calls, or set up user focus groups to gather more feedback and insights.

And if you need more strategies for improving retention rate, check out Retention Point by Robert Skrob from Amazon.com. The author explains how to develop a retention plan that will improve customer loyalty and engagement, boosting your bottom line in the process.


High retention rates result from a good onboarding process, excellent customer support, and effective marketing. Other factors can contribute to high retention rates, such as regularly providing new features and updates, listening to customer feedback, and creating loyalty programs.

Remember, there’s no one-size-fits-all approach to improving retention rates, so it’s essential to try different methods and analyze the results to find what works best for your specific situation.

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Jason Clarke

Building Shopify stores for 8 years. Built 2 Shopify apps. Crazy about marketing and SEO.

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