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SaaS & Product

Retention KPIs: How to Measure and Improve Customer Retention

blog author
Lara Stiris

November 15, 2024

How do you build a bank of loyal customers? Customer retention is the lifeblood of sustainable growth for any type of business. If you’re a product manager or growth marketing professional, you’re likely well aware that acquiring new customers is far more expensive than retaining existing ones. But how do you measure customer retention? The answer lies in retention KPIs (Key Performance Indicators).

In this comprehensive guide, we’ll dive deep into the world of retention KPIs, exploring what they are, why they matter, and how you can use them to boost your customer retention rates. Whether you’re a SaaS business owner, product manager, or customer success professional, this article outlines all the strategies you need to boost your retention efforts — and keep your customers happy.

What are Customer Retention KPIs?

Retention KPIs are specific metrics that help businesses measure and track how well they retain their customers over time. These indicators provide valuable insights into customer behavior, satisfaction, and loyalty, which help companies make data-driven decisions to improve their retention strategies.

Here are just some of the reasons why it’s vital to understand and monitor customer retention KPIs:

  • They help identify areas of improvement in your product or service
  • They provide early warning signs of increased customer churn rate  
  • They allow you to measure how effective your customer retention strategies are
  • They lead to more accurate revenue forecasting and business planning

Put simply, when you know what your customers want, you know how to retain them. Now, let’s explore the customer retention metrics and KPIs that every SaaS business should track.

why monitor customer retention kpis?

10  Customer Retention KPIs and Metrics

1. Customer Retention Rate (CRR)

The Customer Retention Rate is the most fundamental metric for measuring customer retention. It shows the percentage of customers who remain with your business over a given time period. If you choose only one metric to measure, make it Customer Retention Rate.

Formula:

CRR = ( ( C1 - ΔC ) / C0) x 100

C0 = Number of customers at the start of the period
C1 = Number of customers at the end of the period
ΔC = Number of new customers acquired during the period

Why it’s important: Customer Retention Rate provides a clear picture of how well you’re retaining customers over time.  A high Customer Retention Rate suggests strong customer loyalty, which is always good for business.

How to improve it:

  • Enhance your onboarding process to highlight customer value from the get-go
  • Regularly engage with customers through personalized communication
  • Continuously improve your product based on customer feedback
  • Offer high-quality customer support

2. Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue is a valuable metric for subscription-based businesses. It represents the predictable revenue generated from your customer base each month.

Formula:

MRR = Number of customers x Average revenue per customer

Why it’s important: Monthly Recurring Revenue helps you measure your business’s financial health and levels of growth. MRR is also a key indicator of customer retention, as it reflects both new and retained customer revenue.

How to improve it:

  • Focus on upselling and cross-selling to existing customers
  • Implement a tiered pricing strategy to capture different customer segments
  • Reduce churn rate by addressing pain points and improving customer satisfaction
customer retention rate and monthly recurring revenue formulas

3. Customer Lifetime Value (CLV)

Customer Lifetime Value shows the total revenue a business can expect from a single customer account throughout their relationship with the company.

Formula:

CLV = Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

Why it’s important: Customer Lifetime Value helps you understand the long-term value of retaining customers. CLV can also help with decisions on customer acquisition costs and retention strategies.

How to improve it:

  • Boost user engagement with personalized experiences (Example: You could send a customized email on their birthday)
  • Offer loyalty programs or rewards for long-term customers
  • Continuously add value to your product or service (like new features)
  • Provide exceptional customer service to build strong relationships

4. Product Stickiness

Product Stickiness measures how often users engage with your product. To calculate it, use the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU).

Formula:

Product Stickiness = DAU / MAU

Why it’s important: Turns out, it’s good to be sticky. In fact, a high stickiness ratio indicates that users find your product valuable and interact with it regularly, which suggests they’re more likely to stay using it.

How to improve it:

  • Identify and promote your product’s sticky features
  • Use in-app messaging to lead users to these features
  • Gamify some elements to encourage regular usage
  • Use behavior data to regularly optimize the user experience 
customer lifetime value and product stickiness formulas

5. Repeat Purchase Rate (RPR)

While more commonly used in e-commerce, the Repeat Purchase Rate can be adapted for SaaS businesses to measure the percentage of repeat customers (those who renew their subscriptions or upgrade their plans).

Formula:

 RPR = Number of Repeat Customers / Total Number of Customers

Why it’s important: A high Repeat Purchase Rate indicates strong customer loyalty, meaning they’re happy with your product or service.

How to improve it:

  • Build an easy-to-follow customer onboarding process
  • Provide excellent customer support
  • Regularly release new features or improvements
  • Offer incentives for long-term commitments, new subscriptions, or upgrades (e.g., 10% discount)

6. Expansion MRR

Expansion MRR measures the additional annual recurring revenue (ARR) from existing customers through upselling, cross-selling, or plan upgrades.

Formula:

Expansion MRR = MRR from upgrades + MRR from cross-sells - MRR from downgrades

Why it’s important: Expansion MRR is a big indicator of customer satisfaction and the potential to expand your existing customer base.

How to improve it:

  • Identify upsell opportunities based on customer usage patterns
  • Create clear upgrade paths with tangible benefits
  • Educate customers on advanced features that might require upgrades
  • Offer time-limited promotions for upgrades or additional services
repeat purchase rate and expansion mrr formulas

7. Customer Satisfaction Score (CSAT)

As the name suggests, Customer Satisfaction Score measures how satisfied customers are with your product or service, typically on a scale of 1-5 or 1-10.

Formula:

 CSAT = (Number of satisfied customers / Total number of survey responses) x 100

Why it’s important: Because the Customer Satisfaction Score gives direct feedback on customer satisfaction, it helps you spot any problem areas and fix them before the churn rate rises.

How to improve it:

  • Regularly collect customer feedback — and act on it
  • Respond to customer complaints quickly and provide a rapid solution
  • Keep up with user needs, constantly improving your product 
  • Offer 24/7 customer support and education

8. Net Promoter Score (NPS)

Net Promoter Score measures customer loyalty by asking how likely customers are to recommend your product or service to others, typically on a scale of 0-10.

Formula:

NPS = % of Promoters - % of Detractors

Promoters = Customers who rate 9-10
Passives = Customers who rate 7-8
Detractors = Customers who rate 0-6

Why it’s important: Like RPR, Net Promoter Score is a strong indicator of customer loyalty. It can predict your customer retention rate and potential growth through word-of-mouth referrals.

How to improve it:

  • Follow up with detractors to address their concerns
  • Promote your best case studies and testimonials
  • Use feedback to continuously improve your product
  • Create a referral program to encourage promoters to spread the good word
customer satisfaction score and net promoter score formulas

9. Customer Health Score

The Customer Health Score is a metric that combines various indicators to predict the likelihood of a customer continuing to use your product or churning.

Formula: The exact formula differs by company, but typically includes factors such as:

  • Product usage frequency
  • Feature adoption
  • Customer support interactions
  • NPS or CSAT scores
  • Payment history

Why it’s important: Customer Health Scores keep you one step ahead, so you can quickly identify at-risk customers and act before they churn.

How to improve it:

  • Develop a clear scoring system based on key indicators of customer success
  • Use automation tools to alert customer success teams when scores drop
  • Adopt targeted interventions for customers with low health scores
  • Regularly review and refine your health score criteria

10. Revenue Churn Rate

Revenue Churn Rate tracks the percentage of recurring revenue lost due to cancellations or downgrades over a certain time period.

Formula:

Revenue Churn Rate = (MRR at start of period - MRR at end of period) / MRR at start of period

Why it’s important: Revenue Churn Rate helps you understand the impact of customer churn on your business’s bottom line. It can also highlight any revenue issues with specific customer segments or pricing tiers.

How to reduce it:

  • Implement a customer success program
  • Offer incentives for longer-term subscriptions, such as discounts or company swag
  • Regularly communicate the value your product provides (e.g., through social media or email campaigns)
  • Address customer concerns quickly and effectively
revenue churn rate formula

Tip: You don’t need to remember every rate formula by heart — just bookmark this article and refer back to the list whenever you need. 

How to Measure Customer Retention

Now you’ve figured out how to calculate customer retention KPIs and metrics, you’re ready to optimize the process. Here are some top tips to measure customer retention the right way:

  1. Define your time period: Do you want to measure customer retention rate monthly, quarterly, or annually?
  2. Choose your metrics: Select the KPIs that are most relevant to your business model and goals.
  3. Set up tracking: Use customer relationship management (CRM) software, analytics tools, or specialized retention tracking software to collect and analyze your data.
  4. Establish benchmarks: Research industry standards and set realistic goals (consider the SMART method here) for your retention metrics.
  5. Review and analyze: Set up a regular cadence to review your customer retention metrics and analyze trends.
  6. Segment your data: Look at retention rates across different customer segments, such as pricing tiers, industries, or user personas.
  7. Act on insights: Use the data you collect to inform product decisions, customer success strategies, and overall business planning.
how to measure customer retention steps

Strategies to Improve Your Customer Retention Rate

So, you’ve ticked “Measure retention KPIs” off your list. What's next? It’s time to put your plan into action. We’ve touched on some of these above, but here’s a handy list of proven customer retention strategies:

  1. Personalized onboarding: Tailor the onboarding experience so new users get a good first impression. Tip: Tools like Userflow can help you create interactive guides and tutorials.
  2. In-app messaging and email campaigns: Use targeted communications, like in-app notifications and customized emails, to pique users’ interest. These channels are the best way to highlight new features and provide insider tips.
  3. Top-notch customer service: It’s a given that you should respond to customer inquiries quickly, but you can also take it a step further and reach out to users who may be struggling.
  4. Use customer feedback and surveys: Real customer feedback can be a goldmine for product improvements. Collect these nuggets and turn them into actions that will make your product better.
  5. Regularly update and improve your product: Keep an eye on market trends, as well as what your competitors are doing, and use these insights to decide new features and enhancements for your product.
  6. Create a customer loyalty program: Who doesn’t love a perk? Offer exclusive benefits to your loyal customers, such as early access to new features or bespoke pricing.
  7. Provide educational resources: Share webinars, tutorials, and knowledge base articles, so your users get the most out of your product. This is especially important when introducing a new feature, as it will increase user uptake.
  8. Build a community: Create forums, user groups, or events where customers can connect and share best practices.
strategies to improve customer retention rate

How Userflow Can Boost Your Customer Retention Rate

At Userflow, we’re big on customer retention. Our whole platform is designed to help SaaS companies improve their retention metrics, right from the very start of the user journey. Here’s how Userflow can help you track and boost your customer retention rate:

  • Interactive onboarding: Personalize the onboarding experience with step-by-step guides, tooltips, and checklists to improve product adoption and reduce time to value.
  • User segmentation: Target specific user groups with tailored in-app messaging and guides based on their behavior, role, or other attributes.
  • Product usage tracking: Monitor how users interact with your product, identifying areas of high engagement and potential friction points.
  • NPS and CSAT surveys: Easily implement in-app surveys to gather feedback and measure your customer satisfaction score.
  • Feature adoption tracking: Track how users adopt features and create targeted campaigns to increase usage.
  • Analytics and reporting: Access detailed analytics on user behavior, guide completion rates, and other key metrics to inform your retention strategies.
  • Integration capabilities: Connect Userflow with your existing tools like Segment, Intercom, or Salesforce to create a unified view of your customer data.

No more guesswork needed — with Userflow in your corner, you can take a data-driven approach to master your retention KPIs and metrics, ultimately boosting your customer retention rates.

boost your customer retention rate with userflow

FAQs on Customer Retention KPIs

Q: How often should I measure retention KPIs and metrics?
A: It depends on your business model. Most SaaS companies should review retention metrics at least monthly. However, some metrics, like product usage, should be monitored daily or weekly.

Q: What’s a good customer retention rate?
A: Retention rates vary by industry but for SaaS businesses, a retention rate of 35-45% over a 12-month period is considered good. Anything above 50% is excellent.

Q: How do I know which retention KPIs are most important for my business?
A: Focus on metrics that match your business model and growth stage. Early-stage startups might prioritize Product Stickiness, while more mature companies might focus on Customer Lifetime Value.

Q: Can improving retention KPIs impact customer acquisition?
A: Absolutely! Happy, retained customers are more likely to refer new customers. What’s more, focusing on retention can help you optimize your customer acquisition costs as it ensures you target the right customers.

Q: How do I balance focusing on retention vs. acquisition?
A: While both are important, many successful SaaS companies follow the 40/40/20 rule: 40% of resources on acquisition, 40% on retention, and 20% on brand building. However, the exact balance will depend on your growth stage and business goals.

The Last Word on Customer Retention KPIs

Convinced on the importance of customer retention KPIs? By focusing on key metrics like Customer Retention Rate, Monthly Recurring Revenue, Net Promoter Score, and Customer Lifetime Value, you gain valuable insights into user behavior, so you know exactly what steps to take to reduce customer churn rate.

Remember, improving retention is not a one-and-done deal — it’s an ongoing process that requires continuous monitoring, analysis, and optimization. That’s why it’s a good idea to have a tool like Userflow on hand, so you can streamline the process and create tailored experiences that keep your customers coming back for more.

Ready to send your customer retention rate skyrocketing? Sign up for a free trial of Userflow today and see how our comprehensive suite of tools can help you track, analyze, and improve your retention KPIs. Your future self (and your customers) will thank you!

2 min 33 sec. read

SaaS & Product

Retention KPIs: How to Measure and Improve Customer Retention

Lara Stiris

November 15, 2024

How do you build a bank of loyal customers? Customer retention is the lifeblood of sustainable growth for any type of business. If you’re a product manager or growth marketing professional, you’re likely well aware that acquiring new customers is far more expensive than retaining existing ones. But how do you measure customer retention? The answer lies in retention KPIs (Key Performance Indicators).

In this comprehensive guide, we’ll dive deep into the world of retention KPIs, exploring what they are, why they matter, and how you can use them to boost your customer retention rates. Whether you’re a SaaS business owner, product manager, or customer success professional, this article outlines all the strategies you need to boost your retention efforts — and keep your customers happy.

What are Customer Retention KPIs?

Retention KPIs are specific metrics that help businesses measure and track how well they retain their customers over time. These indicators provide valuable insights into customer behavior, satisfaction, and loyalty, which help companies make data-driven decisions to improve their retention strategies.

Here are just some of the reasons why it’s vital to understand and monitor customer retention KPIs:

  • They help identify areas of improvement in your product or service
  • They provide early warning signs of increased customer churn rate  
  • They allow you to measure how effective your customer retention strategies are
  • They lead to more accurate revenue forecasting and business planning

Put simply, when you know what your customers want, you know how to retain them. Now, let’s explore the customer retention metrics and KPIs that every SaaS business should track.

why monitor customer retention kpis?

10  Customer Retention KPIs and Metrics

1. Customer Retention Rate (CRR)

The Customer Retention Rate is the most fundamental metric for measuring customer retention. It shows the percentage of customers who remain with your business over a given time period. If you choose only one metric to measure, make it Customer Retention Rate.

Formula:

CRR = ( ( C1 - ΔC ) / C0) x 100

C0 = Number of customers at the start of the period
C1 = Number of customers at the end of the period
ΔC = Number of new customers acquired during the period

Why it’s important: Customer Retention Rate provides a clear picture of how well you’re retaining customers over time.  A high Customer Retention Rate suggests strong customer loyalty, which is always good for business.

How to improve it:

  • Enhance your onboarding process to highlight customer value from the get-go
  • Regularly engage with customers through personalized communication
  • Continuously improve your product based on customer feedback
  • Offer high-quality customer support

2. Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue is a valuable metric for subscription-based businesses. It represents the predictable revenue generated from your customer base each month.

Formula:

MRR = Number of customers x Average revenue per customer

Why it’s important: Monthly Recurring Revenue helps you measure your business’s financial health and levels of growth. MRR is also a key indicator of customer retention, as it reflects both new and retained customer revenue.

How to improve it:

  • Focus on upselling and cross-selling to existing customers
  • Implement a tiered pricing strategy to capture different customer segments
  • Reduce churn rate by addressing pain points and improving customer satisfaction
customer retention rate and monthly recurring revenue formulas

3. Customer Lifetime Value (CLV)

Customer Lifetime Value shows the total revenue a business can expect from a single customer account throughout their relationship with the company.

Formula:

CLV = Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

Why it’s important: Customer Lifetime Value helps you understand the long-term value of retaining customers. CLV can also help with decisions on customer acquisition costs and retention strategies.

How to improve it:

  • Boost user engagement with personalized experiences (Example: You could send a customized email on their birthday)
  • Offer loyalty programs or rewards for long-term customers
  • Continuously add value to your product or service (like new features)
  • Provide exceptional customer service to build strong relationships

4. Product Stickiness

Product Stickiness measures how often users engage with your product. To calculate it, use the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU).

Formula:

Product Stickiness = DAU / MAU

Why it’s important: Turns out, it’s good to be sticky. In fact, a high stickiness ratio indicates that users find your product valuable and interact with it regularly, which suggests they’re more likely to stay using it.

How to improve it:

  • Identify and promote your product’s sticky features
  • Use in-app messaging to lead users to these features
  • Gamify some elements to encourage regular usage
  • Use behavior data to regularly optimize the user experience 
customer lifetime value and product stickiness formulas

5. Repeat Purchase Rate (RPR)

While more commonly used in e-commerce, the Repeat Purchase Rate can be adapted for SaaS businesses to measure the percentage of repeat customers (those who renew their subscriptions or upgrade their plans).

Formula:

 RPR = Number of Repeat Customers / Total Number of Customers

Why it’s important: A high Repeat Purchase Rate indicates strong customer loyalty, meaning they’re happy with your product or service.

How to improve it:

  • Build an easy-to-follow customer onboarding process
  • Provide excellent customer support
  • Regularly release new features or improvements
  • Offer incentives for long-term commitments, new subscriptions, or upgrades (e.g., 10% discount)

6. Expansion MRR

Expansion MRR measures the additional annual recurring revenue (ARR) from existing customers through upselling, cross-selling, or plan upgrades.

Formula:

Expansion MRR = MRR from upgrades + MRR from cross-sells - MRR from downgrades

Why it’s important: Expansion MRR is a big indicator of customer satisfaction and the potential to expand your existing customer base.

How to improve it:

  • Identify upsell opportunities based on customer usage patterns
  • Create clear upgrade paths with tangible benefits
  • Educate customers on advanced features that might require upgrades
  • Offer time-limited promotions for upgrades or additional services
repeat purchase rate and expansion mrr formulas

7. Customer Satisfaction Score (CSAT)

As the name suggests, Customer Satisfaction Score measures how satisfied customers are with your product or service, typically on a scale of 1-5 or 1-10.

Formula:

 CSAT = (Number of satisfied customers / Total number of survey responses) x 100

Why it’s important: Because the Customer Satisfaction Score gives direct feedback on customer satisfaction, it helps you spot any problem areas and fix them before the churn rate rises.

How to improve it:

  • Regularly collect customer feedback — and act on it
  • Respond to customer complaints quickly and provide a rapid solution
  • Keep up with user needs, constantly improving your product 
  • Offer 24/7 customer support and education

8. Net Promoter Score (NPS)

Net Promoter Score measures customer loyalty by asking how likely customers are to recommend your product or service to others, typically on a scale of 0-10.

Formula:

NPS = % of Promoters - % of Detractors

Promoters = Customers who rate 9-10
Passives = Customers who rate 7-8
Detractors = Customers who rate 0-6

Why it’s important: Like RPR, Net Promoter Score is a strong indicator of customer loyalty. It can predict your customer retention rate and potential growth through word-of-mouth referrals.

How to improve it:

  • Follow up with detractors to address their concerns
  • Promote your best case studies and testimonials
  • Use feedback to continuously improve your product
  • Create a referral program to encourage promoters to spread the good word
customer satisfaction score and net promoter score formulas

9. Customer Health Score

The Customer Health Score is a metric that combines various indicators to predict the likelihood of a customer continuing to use your product or churning.

Formula: The exact formula differs by company, but typically includes factors such as:

  • Product usage frequency
  • Feature adoption
  • Customer support interactions
  • NPS or CSAT scores
  • Payment history

Why it’s important: Customer Health Scores keep you one step ahead, so you can quickly identify at-risk customers and act before they churn.

How to improve it:

  • Develop a clear scoring system based on key indicators of customer success
  • Use automation tools to alert customer success teams when scores drop
  • Adopt targeted interventions for customers with low health scores
  • Regularly review and refine your health score criteria

10. Revenue Churn Rate

Revenue Churn Rate tracks the percentage of recurring revenue lost due to cancellations or downgrades over a certain time period.

Formula:

Revenue Churn Rate = (MRR at start of period - MRR at end of period) / MRR at start of period

Why it’s important: Revenue Churn Rate helps you understand the impact of customer churn on your business’s bottom line. It can also highlight any revenue issues with specific customer segments or pricing tiers.

How to reduce it:

  • Implement a customer success program
  • Offer incentives for longer-term subscriptions, such as discounts or company swag
  • Regularly communicate the value your product provides (e.g., through social media or email campaigns)
  • Address customer concerns quickly and effectively
revenue churn rate formula

Tip: You don’t need to remember every rate formula by heart — just bookmark this article and refer back to the list whenever you need. 

How to Measure Customer Retention

Now you’ve figured out how to calculate customer retention KPIs and metrics, you’re ready to optimize the process. Here are some top tips to measure customer retention the right way:

  1. Define your time period: Do you want to measure customer retention rate monthly, quarterly, or annually?
  2. Choose your metrics: Select the KPIs that are most relevant to your business model and goals.
  3. Set up tracking: Use customer relationship management (CRM) software, analytics tools, or specialized retention tracking software to collect and analyze your data.
  4. Establish benchmarks: Research industry standards and set realistic goals (consider the SMART method here) for your retention metrics.
  5. Review and analyze: Set up a regular cadence to review your customer retention metrics and analyze trends.
  6. Segment your data: Look at retention rates across different customer segments, such as pricing tiers, industries, or user personas.
  7. Act on insights: Use the data you collect to inform product decisions, customer success strategies, and overall business planning.
how to measure customer retention steps

Strategies to Improve Your Customer Retention Rate

So, you’ve ticked “Measure retention KPIs” off your list. What's next? It’s time to put your plan into action. We’ve touched on some of these above, but here’s a handy list of proven customer retention strategies:

  1. Personalized onboarding: Tailor the onboarding experience so new users get a good first impression. Tip: Tools like Userflow can help you create interactive guides and tutorials.
  2. In-app messaging and email campaigns: Use targeted communications, like in-app notifications and customized emails, to pique users’ interest. These channels are the best way to highlight new features and provide insider tips.
  3. Top-notch customer service: It’s a given that you should respond to customer inquiries quickly, but you can also take it a step further and reach out to users who may be struggling.
  4. Use customer feedback and surveys: Real customer feedback can be a goldmine for product improvements. Collect these nuggets and turn them into actions that will make your product better.
  5. Regularly update and improve your product: Keep an eye on market trends, as well as what your competitors are doing, and use these insights to decide new features and enhancements for your product.
  6. Create a customer loyalty program: Who doesn’t love a perk? Offer exclusive benefits to your loyal customers, such as early access to new features or bespoke pricing.
  7. Provide educational resources: Share webinars, tutorials, and knowledge base articles, so your users get the most out of your product. This is especially important when introducing a new feature, as it will increase user uptake.
  8. Build a community: Create forums, user groups, or events where customers can connect and share best practices.
strategies to improve customer retention rate

How Userflow Can Boost Your Customer Retention Rate

At Userflow, we’re big on customer retention. Our whole platform is designed to help SaaS companies improve their retention metrics, right from the very start of the user journey. Here’s how Userflow can help you track and boost your customer retention rate:

  • Interactive onboarding: Personalize the onboarding experience with step-by-step guides, tooltips, and checklists to improve product adoption and reduce time to value.
  • User segmentation: Target specific user groups with tailored in-app messaging and guides based on their behavior, role, or other attributes.
  • Product usage tracking: Monitor how users interact with your product, identifying areas of high engagement and potential friction points.
  • NPS and CSAT surveys: Easily implement in-app surveys to gather feedback and measure your customer satisfaction score.
  • Feature adoption tracking: Track how users adopt features and create targeted campaigns to increase usage.
  • Analytics and reporting: Access detailed analytics on user behavior, guide completion rates, and other key metrics to inform your retention strategies.
  • Integration capabilities: Connect Userflow with your existing tools like Segment, Intercom, or Salesforce to create a unified view of your customer data.

No more guesswork needed — with Userflow in your corner, you can take a data-driven approach to master your retention KPIs and metrics, ultimately boosting your customer retention rates.

boost your customer retention rate with userflow

FAQs on Customer Retention KPIs

Q: How often should I measure retention KPIs and metrics?
A: It depends on your business model. Most SaaS companies should review retention metrics at least monthly. However, some metrics, like product usage, should be monitored daily or weekly.

Q: What’s a good customer retention rate?
A: Retention rates vary by industry but for SaaS businesses, a retention rate of 35-45% over a 12-month period is considered good. Anything above 50% is excellent.

Q: How do I know which retention KPIs are most important for my business?
A: Focus on metrics that match your business model and growth stage. Early-stage startups might prioritize Product Stickiness, while more mature companies might focus on Customer Lifetime Value.

Q: Can improving retention KPIs impact customer acquisition?
A: Absolutely! Happy, retained customers are more likely to refer new customers. What’s more, focusing on retention can help you optimize your customer acquisition costs as it ensures you target the right customers.

Q: How do I balance focusing on retention vs. acquisition?
A: While both are important, many successful SaaS companies follow the 40/40/20 rule: 40% of resources on acquisition, 40% on retention, and 20% on brand building. However, the exact balance will depend on your growth stage and business goals.

The Last Word on Customer Retention KPIs

Convinced on the importance of customer retention KPIs? By focusing on key metrics like Customer Retention Rate, Monthly Recurring Revenue, Net Promoter Score, and Customer Lifetime Value, you gain valuable insights into user behavior, so you know exactly what steps to take to reduce customer churn rate.

Remember, improving retention is not a one-and-done deal — it’s an ongoing process that requires continuous monitoring, analysis, and optimization. That’s why it’s a good idea to have a tool like Userflow on hand, so you can streamline the process and create tailored experiences that keep your customers coming back for more.

Ready to send your customer retention rate skyrocketing? Sign up for a free trial of Userflow today and see how our comprehensive suite of tools can help you track, analyze, and improve your retention KPIs. Your future self (and your customers) will thank you!

2 min 33 sec. read

How do you build a bank of loyal customers? Customer retention is the lifeblood of sustainable growth for any type of business. If you’re a product manager or growth marketing professional, you’re likely well aware that acquiring new customers is far more expensive than retaining existing ones. But how do you measure customer retention? The answer lies in retention KPIs (Key Performance Indicators).

In this comprehensive guide, we’ll dive deep into the world of retention KPIs, exploring what they are, why they matter, and how you can use them to boost your customer retention rates. Whether you’re a SaaS business owner, product manager, or customer success professional, this article outlines all the strategies you need to boost your retention efforts — and keep your customers happy.

What are Customer Retention KPIs?

Retention KPIs are specific metrics that help businesses measure and track how well they retain their customers over time. These indicators provide valuable insights into customer behavior, satisfaction, and loyalty, which help companies make data-driven decisions to improve their retention strategies.

Here are just some of the reasons why it’s vital to understand and monitor customer retention KPIs:

  • They help identify areas of improvement in your product or service
  • They provide early warning signs of increased customer churn rate  
  • They allow you to measure how effective your customer retention strategies are
  • They lead to more accurate revenue forecasting and business planning

Put simply, when you know what your customers want, you know how to retain them. Now, let’s explore the customer retention metrics and KPIs that every SaaS business should track.

why monitor customer retention kpis?

10  Customer Retention KPIs and Metrics

1. Customer Retention Rate (CRR)

The Customer Retention Rate is the most fundamental metric for measuring customer retention. It shows the percentage of customers who remain with your business over a given time period. If you choose only one metric to measure, make it Customer Retention Rate.

Formula:

CRR = ( ( C1 - ΔC ) / C0) x 100

C0 = Number of customers at the start of the period
C1 = Number of customers at the end of the period
ΔC = Number of new customers acquired during the period

Why it’s important: Customer Retention Rate provides a clear picture of how well you’re retaining customers over time.  A high Customer Retention Rate suggests strong customer loyalty, which is always good for business.

How to improve it:

  • Enhance your onboarding process to highlight customer value from the get-go
  • Regularly engage with customers through personalized communication
  • Continuously improve your product based on customer feedback
  • Offer high-quality customer support

2. Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue is a valuable metric for subscription-based businesses. It represents the predictable revenue generated from your customer base each month.

Formula:

MRR = Number of customers x Average revenue per customer

Why it’s important: Monthly Recurring Revenue helps you measure your business’s financial health and levels of growth. MRR is also a key indicator of customer retention, as it reflects both new and retained customer revenue.

How to improve it:

  • Focus on upselling and cross-selling to existing customers
  • Implement a tiered pricing strategy to capture different customer segments
  • Reduce churn rate by addressing pain points and improving customer satisfaction
customer retention rate and monthly recurring revenue formulas

3. Customer Lifetime Value (CLV)

Customer Lifetime Value shows the total revenue a business can expect from a single customer account throughout their relationship with the company.

Formula:

CLV = Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

Why it’s important: Customer Lifetime Value helps you understand the long-term value of retaining customers. CLV can also help with decisions on customer acquisition costs and retention strategies.

How to improve it:

  • Boost user engagement with personalized experiences (Example: You could send a customized email on their birthday)
  • Offer loyalty programs or rewards for long-term customers
  • Continuously add value to your product or service (like new features)
  • Provide exceptional customer service to build strong relationships

4. Product Stickiness

Product Stickiness measures how often users engage with your product. To calculate it, use the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU).

Formula:

Product Stickiness = DAU / MAU

Why it’s important: Turns out, it’s good to be sticky. In fact, a high stickiness ratio indicates that users find your product valuable and interact with it regularly, which suggests they’re more likely to stay using it.

How to improve it:

  • Identify and promote your product’s sticky features
  • Use in-app messaging to lead users to these features
  • Gamify some elements to encourage regular usage
  • Use behavior data to regularly optimize the user experience 
customer lifetime value and product stickiness formulas

5. Repeat Purchase Rate (RPR)

While more commonly used in e-commerce, the Repeat Purchase Rate can be adapted for SaaS businesses to measure the percentage of repeat customers (those who renew their subscriptions or upgrade their plans).

Formula:

 RPR = Number of Repeat Customers / Total Number of Customers

Why it’s important: A high Repeat Purchase Rate indicates strong customer loyalty, meaning they’re happy with your product or service.

How to improve it:

  • Build an easy-to-follow customer onboarding process
  • Provide excellent customer support
  • Regularly release new features or improvements
  • Offer incentives for long-term commitments, new subscriptions, or upgrades (e.g., 10% discount)

6. Expansion MRR

Expansion MRR measures the additional annual recurring revenue (ARR) from existing customers through upselling, cross-selling, or plan upgrades.

Formula:

Expansion MRR = MRR from upgrades + MRR from cross-sells - MRR from downgrades

Why it’s important: Expansion MRR is a big indicator of customer satisfaction and the potential to expand your existing customer base.

How to improve it:

  • Identify upsell opportunities based on customer usage patterns
  • Create clear upgrade paths with tangible benefits
  • Educate customers on advanced features that might require upgrades
  • Offer time-limited promotions for upgrades or additional services
repeat purchase rate and expansion mrr formulas

7. Customer Satisfaction Score (CSAT)

As the name suggests, Customer Satisfaction Score measures how satisfied customers are with your product or service, typically on a scale of 1-5 or 1-10.

Formula:

 CSAT = (Number of satisfied customers / Total number of survey responses) x 100

Why it’s important: Because the Customer Satisfaction Score gives direct feedback on customer satisfaction, it helps you spot any problem areas and fix them before the churn rate rises.

How to improve it:

  • Regularly collect customer feedback — and act on it
  • Respond to customer complaints quickly and provide a rapid solution
  • Keep up with user needs, constantly improving your product 
  • Offer 24/7 customer support and education

8. Net Promoter Score (NPS)

Net Promoter Score measures customer loyalty by asking how likely customers are to recommend your product or service to others, typically on a scale of 0-10.

Formula:

NPS = % of Promoters - % of Detractors

Promoters = Customers who rate 9-10
Passives = Customers who rate 7-8
Detractors = Customers who rate 0-6

Why it’s important: Like RPR, Net Promoter Score is a strong indicator of customer loyalty. It can predict your customer retention rate and potential growth through word-of-mouth referrals.

How to improve it:

  • Follow up with detractors to address their concerns
  • Promote your best case studies and testimonials
  • Use feedback to continuously improve your product
  • Create a referral program to encourage promoters to spread the good word
customer satisfaction score and net promoter score formulas

9. Customer Health Score

The Customer Health Score is a metric that combines various indicators to predict the likelihood of a customer continuing to use your product or churning.

Formula: The exact formula differs by company, but typically includes factors such as:

  • Product usage frequency
  • Feature adoption
  • Customer support interactions
  • NPS or CSAT scores
  • Payment history

Why it’s important: Customer Health Scores keep you one step ahead, so you can quickly identify at-risk customers and act before they churn.

How to improve it:

  • Develop a clear scoring system based on key indicators of customer success
  • Use automation tools to alert customer success teams when scores drop
  • Adopt targeted interventions for customers with low health scores
  • Regularly review and refine your health score criteria

10. Revenue Churn Rate

Revenue Churn Rate tracks the percentage of recurring revenue lost due to cancellations or downgrades over a certain time period.

Formula:

Revenue Churn Rate = (MRR at start of period - MRR at end of period) / MRR at start of period

Why it’s important: Revenue Churn Rate helps you understand the impact of customer churn on your business’s bottom line. It can also highlight any revenue issues with specific customer segments or pricing tiers.

How to reduce it:

  • Implement a customer success program
  • Offer incentives for longer-term subscriptions, such as discounts or company swag
  • Regularly communicate the value your product provides (e.g., through social media or email campaigns)
  • Address customer concerns quickly and effectively
revenue churn rate formula

Tip: You don’t need to remember every rate formula by heart — just bookmark this article and refer back to the list whenever you need. 

How to Measure Customer Retention

Now you’ve figured out how to calculate customer retention KPIs and metrics, you’re ready to optimize the process. Here are some top tips to measure customer retention the right way:

  1. Define your time period: Do you want to measure customer retention rate monthly, quarterly, or annually?
  2. Choose your metrics: Select the KPIs that are most relevant to your business model and goals.
  3. Set up tracking: Use customer relationship management (CRM) software, analytics tools, or specialized retention tracking software to collect and analyze your data.
  4. Establish benchmarks: Research industry standards and set realistic goals (consider the SMART method here) for your retention metrics.
  5. Review and analyze: Set up a regular cadence to review your customer retention metrics and analyze trends.
  6. Segment your data: Look at retention rates across different customer segments, such as pricing tiers, industries, or user personas.
  7. Act on insights: Use the data you collect to inform product decisions, customer success strategies, and overall business planning.
how to measure customer retention steps

Strategies to Improve Your Customer Retention Rate

So, you’ve ticked “Measure retention KPIs” off your list. What's next? It’s time to put your plan into action. We’ve touched on some of these above, but here’s a handy list of proven customer retention strategies:

  1. Personalized onboarding: Tailor the onboarding experience so new users get a good first impression. Tip: Tools like Userflow can help you create interactive guides and tutorials.
  2. In-app messaging and email campaigns: Use targeted communications, like in-app notifications and customized emails, to pique users’ interest. These channels are the best way to highlight new features and provide insider tips.
  3. Top-notch customer service: It’s a given that you should respond to customer inquiries quickly, but you can also take it a step further and reach out to users who may be struggling.
  4. Use customer feedback and surveys: Real customer feedback can be a goldmine for product improvements. Collect these nuggets and turn them into actions that will make your product better.
  5. Regularly update and improve your product: Keep an eye on market trends, as well as what your competitors are doing, and use these insights to decide new features and enhancements for your product.
  6. Create a customer loyalty program: Who doesn’t love a perk? Offer exclusive benefits to your loyal customers, such as early access to new features or bespoke pricing.
  7. Provide educational resources: Share webinars, tutorials, and knowledge base articles, so your users get the most out of your product. This is especially important when introducing a new feature, as it will increase user uptake.
  8. Build a community: Create forums, user groups, or events where customers can connect and share best practices.
strategies to improve customer retention rate

How Userflow Can Boost Your Customer Retention Rate

At Userflow, we’re big on customer retention. Our whole platform is designed to help SaaS companies improve their retention metrics, right from the very start of the user journey. Here’s how Userflow can help you track and boost your customer retention rate:

  • Interactive onboarding: Personalize the onboarding experience with step-by-step guides, tooltips, and checklists to improve product adoption and reduce time to value.
  • User segmentation: Target specific user groups with tailored in-app messaging and guides based on their behavior, role, or other attributes.
  • Product usage tracking: Monitor how users interact with your product, identifying areas of high engagement and potential friction points.
  • NPS and CSAT surveys: Easily implement in-app surveys to gather feedback and measure your customer satisfaction score.
  • Feature adoption tracking: Track how users adopt features and create targeted campaigns to increase usage.
  • Analytics and reporting: Access detailed analytics on user behavior, guide completion rates, and other key metrics to inform your retention strategies.
  • Integration capabilities: Connect Userflow with your existing tools like Segment, Intercom, or Salesforce to create a unified view of your customer data.

No more guesswork needed — with Userflow in your corner, you can take a data-driven approach to master your retention KPIs and metrics, ultimately boosting your customer retention rates.

boost your customer retention rate with userflow

FAQs on Customer Retention KPIs

Q: How often should I measure retention KPIs and metrics?
A: It depends on your business model. Most SaaS companies should review retention metrics at least monthly. However, some metrics, like product usage, should be monitored daily or weekly.

Q: What’s a good customer retention rate?
A: Retention rates vary by industry but for SaaS businesses, a retention rate of 35-45% over a 12-month period is considered good. Anything above 50% is excellent.

Q: How do I know which retention KPIs are most important for my business?
A: Focus on metrics that match your business model and growth stage. Early-stage startups might prioritize Product Stickiness, while more mature companies might focus on Customer Lifetime Value.

Q: Can improving retention KPIs impact customer acquisition?
A: Absolutely! Happy, retained customers are more likely to refer new customers. What’s more, focusing on retention can help you optimize your customer acquisition costs as it ensures you target the right customers.

Q: How do I balance focusing on retention vs. acquisition?
A: While both are important, many successful SaaS companies follow the 40/40/20 rule: 40% of resources on acquisition, 40% on retention, and 20% on brand building. However, the exact balance will depend on your growth stage and business goals.

The Last Word on Customer Retention KPIs

Convinced on the importance of customer retention KPIs? By focusing on key metrics like Customer Retention Rate, Monthly Recurring Revenue, Net Promoter Score, and Customer Lifetime Value, you gain valuable insights into user behavior, so you know exactly what steps to take to reduce customer churn rate.

Remember, improving retention is not a one-and-done deal — it’s an ongoing process that requires continuous monitoring, analysis, and optimization. That’s why it’s a good idea to have a tool like Userflow on hand, so you can streamline the process and create tailored experiences that keep your customers coming back for more.

Ready to send your customer retention rate skyrocketing? Sign up for a free trial of Userflow today and see how our comprehensive suite of tools can help you track, analyze, and improve your retention KPIs. Your future self (and your customers) will thank you!

About the author

Lara Stiris

Userflow

Director of Demand Generation at Userflow

Lara Stiris is the Director of Demand Generation at Userflow, where she focuses on helping SaaS companies succeed with product-led growth and user onboarding. Drawing from her experience leading marketing strategies at companies like Twitch/AWS, Splunk, and Vonage, she brings a unique perspective on how effective user engagement drives business growth. A data-driven marketer with a Stanford economics degree, Lara writes about the intersection of product experience, user adoption, and revenue generation in the B2B SaaS space.

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blog imageHow We Built a Tiered Product Launch Strategy at Potloc
Rocio Lopez Daglio

December 6, 2024

As a Senior Product Marketing Manager at Potloc, a market research platform for consulting and private equity firms, I’ve come to see that not all product launches should follow the same playbook. Every new release offers a different level of impact and requires varying levels of investment. Over the past year, as we focused on more customer-facing capabilities for our market research platform, we needed a framework to help us identify which launches warranted major announcements and resources and which could be quietly rolled out.

In this post, I’ll walk through our approach to building a tiered launch strategy. I’ll also share how we partnered with Userflow to align our in-product communication with the distinct requirements of each launch type. Ultimately, this approach has allowed us to meet user needs in a way that respects their time and enhances their experience with our platform.

Why a Tiered Approach Was Necessary

Our move toward a structured launch framework came out of necessity. Traditionally, our roadmap included a balance of internal- and customer-facing improvements. However, as we scaled customer features, we realized that our old one-size-fits-all approach didn’t serve us or our users. Each new feature required a tailored level of communication, which led us to rethink how we allocate resources for launches.

Through this tiered model, we could prioritize high-impact releases and streamline minor updates to maintain user focus.

Why Potloc needed a tiered approach to product launches

The Four Tiers of Our Launch Framework

Tier 1: Game Changers

At the top of our framework are our “Game Changers” - Tier 1 releases that fundamentally transform our platform and set us apart in the market. These are the releases we treat as cornerstone events, happening once a year. 

A perfect example is our recently launched Data Cleaning Report. In market research, data quality is often a black box, with vague claims about accuracy and little visibility into the processes behind the results. Our Data Cleaning Report broke this mold by introducing real-time transparency into how our quality control measures work to remove low quality and fraudulent responses throughout the sample collection process. It’s not just a feature—it’s a shift in how the industry thinks about transparency around data quality.

Tier 2: Strategically Important Launches

The second tier encompasses strategically important launches that introduce new functionality to our platform. While these features might not redefine the market, they significantly improve our offering in ways that resonate deeply with current users. These launches typically happen several times throughout the year and require substantial communication efforts.

Tier 3: Incremental Enhancements

Our third tier encompasses incremental enhancements designed to address specific customer needs and improve platform usability. These features, while not central to our sales pitch, play a critical role in supporting deal closures and boosting customer satisfaction.

A good example is our Fieldwork Progress Visibility feature that allows customers to follow the progress of their sample collection in real time, making it easier for customers to keep track of their quotas and rest assured that the fieldwork will meet their deadlines. While valuable, it enhances rather than transforms our core offering.

Tier 4: Minor Updates

Finally, our fourth tier covers minor updates, the day-to-day improvements that ensure our platform operates smoothly. While these updates typically don’t require extensive communication, they contribute to a seamless user experience, laying the groundwork for broader adoption of our more transformative features.

the 4 tiers of Potloc's product launch framework

Choosing the Right Communication Channels

Our approach to feature communication has evolved significantly through trial and error. For all in-product communication, we selectively use Userflow's three main features - announcements, launchers, and flows.

Announcements

Announcements are our primary tool for feature communication, with notification levels strategically aligned to feature importance:

  • Pop-up notifications: Reserved for Tier 1 game-changers, these grab immediate attention to ensure all users are aware of major releases.
  • Badge notifications: Used for Tier 2 and 3 strategic launches, these subtle indicators signal updates without interrupting workflows.
  • Silent notifications: For Tier 4 minor updates, these populate our resource center without additional alerts, ensuring the focus remains on higher-priority features.

This tiered notification strategy helps us maintain a balance between keeping users informed and respecting their focus time.

Each announcement includes a “Show Me” call-to-action, directing users to relevant platform sections, making information actionable and accessible for even the busiest users.

Potloc's use of Userflow's in-product prompt and call-to-action

Launchers

Launchers shine as targeted, in-product guidance tools. We use them for immediate, contextual guidance about new features, especially when we want to highlight something directly in the product interface. They've proven particularly effective for our internal teams, who are often already familiar with new features from the discovery phase.

Flows

Our use of flows has perhaps evolved the most. Initially, we focused on building flows to provide users with accessible, on-demand resources to navigate features effectively. These flows were always housed in the resource center, available for users seeking additional guidance. Over time, however, we recognized that announcements and launchers are more effective for most users, as flows can occasionally feel disruptive.

Given the intuitive design of our platform, flows are now positioned as supplementary tools for those who prefer extra guidance, rather than the default approach. This ensures users who need support can access it without being overwhelmed by unnecessary tutorials.

Potloc's use of Userflow's launchers and flows

The Evolution of Our Resource Center

Designed to meet the demands of Consulting and PE firm customers, our resource center prioritizes speed and efficiency. These users, often working on time-sensitive deals, rarely have the luxury of traditional onboarding calls or demos.

To address this, we’ve evolved the resource center into a self-serve hub focused on delivering immediate value. At its core is a streamlined checklist that highlights key “Aha!” moments—those pivotal features that showcase our platform’s value at a glance. This is further supported by on-demand guided tours, a centralized announcement feed, and seamless integration with our HubSpot Knowledge Base.

We’ve also introduced the Potloc Guide, an AI-powered assistant offering instant responses to user questions. Together, these features empower users to get the help they need, precisely when they need it.

Potloc's use of Userflow's resource center

Lessons Learned

The most valuable lesson we've learned is that less is often more. Overloading users with flows and tutorials can dilute their experience. If your product is designed intuitively, let it speak for itself. We’ve seen the best results by starting small, gathering feedback from real users, and iterating based on their actual behavior.

Equally important is trusting the strength of your product design. Our team invests significant effort into ensuring features are intuitive and easy to navigate. Instead of detailing every aspect in product tours, we focus our communication on what truly adds value and differentiates us in the market.

Lessons learned from building user onboarding

Looking Ahead

As we refine our launch strategy, we’re placing a stronger emphasis on data-driven decision-making. Using tools like Amplitude, we monitor feature adoption and engagement, while gathering anecdotal feedback from our customer-facing teams. 

The key to successful product launches isn’t about using every communication channel—it’s about choosing the ones that resonate most with your audience and fit the context of each feature. For our users, understanding their time constraints and their need for immediate value has been central to shaping our approach.

What works for one company may not work for another. The best approach is to start small, test what resonates, and adapt based on your unique audience and business needs.

2 min 33 sec. read

blog imageHow To Build a Scalable Process for Managing Userflow
Carrie Moy

December 4, 2024

Success with product adoption tools isn't just about the technology—it's about having the right processes in place. A tool like Userflow shines by simplifying user onboarding through interactive walkthroughs, enabling rapid implementation with minimal coding, and being cost-effective. At ASSISTments, its seamless integration with existing tools like Hubspot made it the ideal choice. In this post, I'll share how we developed a framework that helped us scale Userflow implementation at ASSISTments while maintaining a great user experience.

Starting Out: The Growing Pains

When implementing Userflow in 2022, the primary goal was straightforward: create a smooth onboarding experience that would help teachers understand the value of our online math platform. We wanted to guide them through three key aspects of the product: how to assign work, what the student experience looks like, and how to interpret the data we provide.

The implementation was successful—maybe too successful. As more teams saw what Userflow could do, requests started pouring in to use it for everything from feature announcements to user research. While it was great to see enthusiasm for the tool, our Senior Product Designer, Kyle Scheuing, and I, the Director of Product and Program Operations, became concerned about the potential impact on our users. We didn't want to become "that annoying site" with pop-ups everywhere.

Goal, focus, success, and challenge of implementing Userflow at ASSISTments

Building Our Solution

We knew we needed a structured approach to manage these requests while keeping our users' experience at the forefront. Below is the framework we developed to manage Userflow at ASSISTments. Keep reading to learn how you can implement a similar framework in your organization.

1. Define Clear Boundaries

Document exactly what Userflow should and shouldn't be used for. For example:

✅ Good uses:

  • Onboarding new users
  • Announcing new features
  • Collecting targeted feedback from specific user segments
  • Tracking specific user interactions

❌ Not appropriate for:

  • General marketing communications
  • Collecting demographic information
  • Continuous promotional messaging
  • Non-targeted mass communications
Define clear boundaries for good and bad uses for Userflow

2. Create a Decision-Making Framework

Develop a decision tree that helps stakeholders determine whether Userflow is the right tool for their needs. The key questions include:

  • Who are you trying to reach?
  • What type of interaction do you need?
  • How quickly do you need to implement this?
  • What kind of data do you need to collect?
Creating a decision-making framework for Userflow at ASSISTments

3. Establish Clear Ownership

Adopt the MOCHA framework (Manager, Owner, Consulted, Helper, Approver) to ensure everyone knows their role in the process. In our case:

  • The Director of Product and Program Operations owns the day-to-day management of Userflow
  • The Product Designer reviews for visual consistency
  • The communications team reviews messaging for brand consistency
  • The Teacher Experience Product Owner has final approval

4. Implement Request Templates

Create specific templates for different types of requests:

  • Surveys
  • In-product flows (walkthroughs, banners, beacons)
  • Usage tracking

Each template requires stakeholders to think through their objectives, target audience, timeline, and success metrics before submitting a request.

Carrie Moy quote about implementing Userflow at ASSISTments

Implementing templates and the MOCHA framework wasn’t without its challenges. Early on, some stakeholders viewed the added structure as a potential bottleneck, concerned it might slow down their requests. To address this, we emphasized how the process would streamline workflows, reduce miscommunication, and keep everyone informed about Userflow implementations. Despite initial skepticism, the benefits became evident quickly. Templates reduced back-and-forth messages, and requests became more focused and thoughtful. These small wins created momentum, reassuring us that the framework was not just functional, but a critical step in enhancing both internal processes and the user experience.

Balancing Tools: Userflow and Mixpanel

One question we often get is how we decide between using Userflow or Mixpanel for tracking. Here's our general approach:

Use Userflow when:

  • You need quick implementation (can be done same-day)
  • You want to collect immediate user feedback
  • You need Hubspot integration
  • The tracking period is relatively short

Use Mixpanel when:

  • You need very specific element tracking
  • You want long-term data collection (beyond 180 days)
  • You need detailed behavioral data
  • You want to track across multiple events
Balancing tools: when to use Userflow vs. Mixpanel

Results and Lessons Learned

The framework has been in place since May 2024, and we've been pleasantly surprised by the results. Despite initially worrying about pushback (we were essentially adding a process where there wasn't one before), our team has embraced the structure.

Key lessons we've learned:

  1. Set time limits: Most of our Userflow implementations have a specific end date, which helps prevent notification fatigue.
  2. Start with why: When introducing a process, focus on how it benefits the user experience.
  3. Make it collaborative: Include key stakeholders in the development of your framework.
  4. Stay flexible: Be ready to adjust your process based on team feedback and changing needs.
how to establish clear ownership around launching flows in Userflow at ASSISTments

Looking Forward

While our framework is still relatively new, it's already helping us maintain a higher quality user experience while making it easier to manage internal requests. We continue to iterate on our process, but the foundation we've built gives us confidence that we can scale our product adoption efforts effectively.

Want to implement a similar framework in your organization? Check out our template below, which you can adapt for your own needs. Remember, the goal isn't to create bureaucracy—it's to ensure that every interaction with your users adds value to their experience.

2 min 33 sec. read

blog imageMastering Userflow: Your Guide to Creating Engaging User Experiences
Lara Stiris

December 2, 2024

The difference between a user abandoning your product and becoming a loyal advocate often hinges on their initial experience. User onboarding and feature adoption are critical touchpoints that can define your product's success. Userflow provides powerful tools to guide your users effectively, but like any sophisticated instrument, its true potential is unlocked through strategic application. This guide, crafted from the insights of experienced Userflow customers, will help you navigate the path to creating impactful user experiences.

1. Crafting Effective Onboarding & Adoption Flows

The journey of a thousand miles begins with a single step, and in the world of SaaS, that step is often an onboarding flow. Here's how to make those first steps count:

Start with User Research

Before diving into flow creation, take a step back and understand your users' expectations. Conduct customer interviews and identify the "Aha!" moments in your product. These insights will guide you in creating flows that resonate with your users and highlight your product's core value.

Userflow tip: Start with user research

Tailor to Your Audience

One size rarely fits all, especially when it comes to user onboarding. Leverage Userflow's segmentation capabilities to create flows based on user roles or feature access. Consider integrating with other tools like HubSpot to enhance your segmentation capabilities and follow-up communications.

Userflow tip: Tailor to your audience

Keep It Simple and Concise

In the realm of user onboarding, less is often more. Aim to create flows with 3-5 steps, using clear and scannable language. As Samantha Swartz from CreativeX advises, "Less is more. Always simplify. Avoid too many complex steps." This approach respects your users' time and cognitive load, increasing the likelihood they'll complete the flow and retain the information.

Userflow tip 1: keep it simple, create concise flows

Establish a Clear Process

For organizations of any size, having a structured process for implementing Userflow is crucial. Carrie Moy from ASSISTments, an online formative math assessment tool, shares their approach: "We've built a process where people who want to use Userflow submit a form that outlines their goals and information. From there, we use established design rules and visual setups to ensure consistency." This process includes:

- Goal definition and documentation

- Design guidelines for visual consistency. (Use the Theme Designer in Userflow to reduce re-work.)

- Review by communications team

- Testing in playground environment

- Clear metrics tracking responsibilities

Userflow tip 2: establish a clear process and use the Theme Designer to reduce re-work

2. Use Cases to Kickstart Your Userflow Journey

Userflow offers many features, so when getting started it’s key to understand which features will best serve the specific goals you have for your product and business. Here's a guide organized by common use cases to help you create your first few in-app experiences:

1. User Onboarding and Initial Setup

Primary Features: Flows, Checklists, Resource center

As Matous Vrba from Make advises, "Avoid overwhelming users and giving them more than they need in that moment. New users love structure and checklists work great for this."

  • Flows excel at providing step-by-step guidance through initial setup, profile completion, and key feature introduction
  • Checklists break down the onboarding process into manageable tasks, creating a sense of progress
  • Resource center serves as a self-service hub for FAQs and additional guidance
Userflow use cases: user onboarding and initial setup

2. Critical Updates and Important Announcements

Primary Features: Modals, Announcements

  • Modals for urgent updates requiring immediate attention (compliance updates, maintenance alerts)
  • Announcements for less time-sensitive updates that shouldn't interrupt workflow

3. Introducing a New Feature

Primary Features: Modals, Resource center, Announcements

As Carrie Moy notes, "We started with the modal and then started to build flows from that. The flows were really easy to start with."

  • Modals for feature spotlights and initial introductions
  • Resource center to provide detailed documentation and tutorials
  • Announcements for ongoing tips and updates about the feature
Userflow use cases: introducing a new feature

4. Complex Process Guidance

Primary Features: Flows, Checklists

  • Flows guide users through multi-step processes across different parts of the interface
  • Checklists provide clear progress tracking and structured task completion

5. User Feedback Collection

Primary Features: Modals, Resource center

Bruno Cardoso from GBTEC recommends to "Implement an NPS survey followed by an open-ended text question within a modal, triggered after the completion of key checklists."

  • Modals for NPS surveys and feedback collection
  • Resource center to host feedback forms and additional surveys
Userflow use cases: user feedback collection

6. Self-Service Support

Primary Features: Resource center, AI Assistant

7. Feature Discovery and Adoption

Primary Features: Tooltips, Announcements, Checklists

8. Compliance and Policy Updates

Primary Features: Modals, Announcements

  • Modals for mandatory acknowledgments and acceptances
  • Announcements to notify users of upcoming policy changes
Userflow use cases

Feature Selection Framework

When choosing between features, consider these guidelines:

Use Modals When:

  • You need immediate user attention
  • The interaction is simple and focused
  • No navigation is required

Use Flows When:

  • Multiple steps are involved
  • Users need to interact with different parts of the UI
  • Progress tracking is important

Use Checklists When:

  • Tasks can be broken into clear steps
  • Users need to track progress over time
  • Structure and guidance are important
Userflow feature selection framework: modals, flows, checklists and when to use each

Remember that features can be combined for maximum impact. For example, using a modal for initial feature introduction followed by a checklist for adoption, or combining the Resource center with AI Assistant for comprehensive self-service support.

3. Navigating Common Pitfalls: Tips for Success

Even the most well-intentioned onboarding efforts can fall flat if not executed properly. Here are some crucial tips to keep in mind:

Navigating common user onboarding pitfalls

Avoid Overwhelming Users

In your enthusiasm to guide users, it's easy to bombard them with information. Resist this temptation. Avoid overlapping flows, cap non-critical interactions to one at a time, and space out your launches (aim for 5-10 minutes apart). This measured approach respects your users' cognitive load and allows them to absorb information more effectively. In particular, Samantha Swartz from CreativeX encourages onboarding owners to “Set priority for your flows, especially if you have many on and off users that don’t come back frequently, otherwise they may get inundated when they return and flows have piled up.“

Userflow tip: avoid overwhelming users

Collaborate with Your Team

Coordination is key when multiple team members are creating content. “Establish clear communication channels to avoid overlapping announcements or conflicting information,” advises Chris McAloney of Irwin. This collaborative approach ensures a cohesive user experience.

Userflow tip: collaborate with your team

Integrate with Your Tech Stack

Make the most of Userflow's integration capabilities. For example, combining Userflow data with tools like HubSpot and Mixpanel can provide deeper insights and enable more sophisticated user communication strategies. As Carrie Moy notes, "The integration with HubSpot has been key, to pull in Userflow information into HubSpot, to narrow down and send follow-up emails."

Provide Restart Options

Users may need to exit a flow before completion for various reasons. Ensure they can easily restart flows from the beginning. As Bruno Cardoso pointed out, "Repetition is a common and effective learning method."

Leverage Visual Aids Wisely

Use Userflow's visual features strategically. Employ backdrops to highlight click areas and consider using videos or GIFs for more complex concepts. These visual aids can significantly enhance understanding and engagement.

Nick Markman from Evocalize notes, "Content is incredibly easy, higher barrier on triggers and conditions." This insight highlights the importance of not just creating great content, but also ensuring it's triggered at the right time and under the right conditions.

Userflow tip: leverage visual aids wisely

4. Measuring Success: Key Metrics to Track

To optimize your Userflow implementation, it's crucial to track the right metrics. Here are the key performance indicators to focus on:

1. Completion Rates: Track how many people are finishing flows and identify drop-off points.

2. Activation Rates: Monitor the journey from account creation to defined activation points, combining Userflow data with product engagement metrics.

3. Flow Exit Points: Analyze where users are leaving flows to optimize content and length.

4. User Visibility: Track which segments of users are seeing and engaging with your flows.

5. Engagement Over Time: Monitor how engagement patterns change across different user segments and timeframes.

Sheli Demry from Grip shared a powerful testament to the effectiveness of in-app surveys: "We've gotten more NPS responses with Userflow in 6 months than we've had with 2.5 years of post-event email surveys." This underscores the power of reaching users within your product environment.

Userflow key metrics to track

5. Realizing the Power of Userflow: Impact on Your Business

When implemented effectively, Userflow can have a transformative impact on your business. Here are some of the key benefits reported by users:

Improved Communication

Userflow enables you to reach users directly in their work environment, allowing for timely and contextual communication. This is particularly valuable for urgent updates or critical information that might otherwise get lost in email inboxes.

Increased Conversion Rates

Strategic use of Userflow can directly impact your bottom line. One user reported doubling their new user to first purchase conversion rate within the first month by split testing an onboarding flow against a control group with no onboarding.

Time and Resource Savings

As a no-code solution, Userflow reduces reliance on developers for implementing onboarding, UX changes, and testing new experiments. This allows for quicker implementation of in-product information and frees up valuable development resources.

Cross-Team Alignment

A structured approach to Userflow can help align multiple teams around user communication. By establishing clear processes for flow creation, design review, and implementation, you can ensure consistent messaging and avoid overwhelming users with competing notifications.

Rocio Lopez Daglio from Potloc summarizes the impact well: “Since we started using Userflow, we’ve established a stronger, more direct line of communication with our customers, bypassing traditional marketing channels that can feel overly promotional. Userflow allows us to engage with customers in a straightforward, value-driven way, keeping the focus on what matters most to them." 

Reduced Support Tickets

By providing proactive guidance and easily accessible resources, many companies have seen a significant decrease in customer support emails. This not only reduces strain on your support team but also improves user satisfaction through faster problem resolution.

The impact of Userflow on your business

Best Practices for Team Implementation

Consider establishing these elements for smooth team adoption of Userflow:

1. Intake Process: Create a standardized form for team members to request new flows or changes

2. Design Guidelines: Establish consistent visual and text standards

3. Review Workflow: Set up a clear process for communications and design team review

4. Testing Protocol: Use playground environments to test flows before launch

5. Metrics Ownership: Assign clear responsibility for tracking and analyzing results

This structured approach helps maintain quality and consistency, especially valuable for smaller teams managing multiple priorities.

Userflow best practices for team implementation

Conclusion

Userflow is more than just a tool—it's a pathway to creating meaningful, engaging user experiences that drive adoption, satisfaction, and ultimately, business success. By following these best practices, you're well on your way to mastering Userflow and transforming your user onboarding and engagement strategies.

Remember, the key to success with Userflow lies in continuous iteration. Always prioritize your users' needs, pay attention to the metrics, and don't be afraid to experiment. With each flow you create and refine, you're not just onboarding users—you're crafting experiences that will keep them coming back for more.

Acknowledgements

We would like to extend our sincere gratitude to the following industry professionals who shared their valuable insights and experiences for this guide:

- Bruno Cardoso, GBTEC

- Rocio Lopez Daglio, Potloc

- Sheli Demry, Grip

- Nick Markman, Evocalize

- Chris McAloney, Irwin

- Carrie Moy and Kyle Scheuing, ASSISTments

- Samantha Swartz, CreativeX

- Matous Vrba, Make

Acknowledgements

Their thoughtful contributions and real-world experiences have been instrumental in creating this comprehensive guide to mastering Userflow. Their expertise spans across different industries and use cases, providing valuable perspectives on implementing effective user experiences.

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Retention KPIs: How to Measure and Improve Customer Retention

Lara Stiris

on

November 15, 2024

How do you build a bank of loyal customers? Customer retention is the lifeblood of sustainable growth for any type of business. If you’re a product manager or growth marketing professional, you’re likely well aware that acquiring new customers is far more expensive than retaining existing ones. But how do you measure customer retention? The answer lies in retention KPIs (Key Performance Indicators).

In this comprehensive guide, we’ll dive deep into the world of retention KPIs, exploring what they are, why they matter, and how you can use them to boost your customer retention rates. Whether you’re a SaaS business owner, product manager, or customer success professional, this article outlines all the strategies you need to boost your retention efforts — and keep your customers happy.

What are Customer Retention KPIs?

Retention KPIs are specific metrics that help businesses measure and track how well they retain their customers over time. These indicators provide valuable insights into customer behavior, satisfaction, and loyalty, which help companies make data-driven decisions to improve their retention strategies.

Here are just some of the reasons why it’s vital to understand and monitor customer retention KPIs:

  • They help identify areas of improvement in your product or service
  • They provide early warning signs of increased customer churn rate  
  • They allow you to measure how effective your customer retention strategies are
  • They lead to more accurate revenue forecasting and business planning

Put simply, when you know what your customers want, you know how to retain them. Now, let’s explore the customer retention metrics and KPIs that every SaaS business should track.

why monitor customer retention kpis?

10  Customer Retention KPIs and Metrics

1. Customer Retention Rate (CRR)

The Customer Retention Rate is the most fundamental metric for measuring customer retention. It shows the percentage of customers who remain with your business over a given time period. If you choose only one metric to measure, make it Customer Retention Rate.

Formula:

CRR = ( ( C1 - ΔC ) / C0) x 100

C0 = Number of customers at the start of the period
C1 = Number of customers at the end of the period
ΔC = Number of new customers acquired during the period

Why it’s important: Customer Retention Rate provides a clear picture of how well you’re retaining customers over time.  A high Customer Retention Rate suggests strong customer loyalty, which is always good for business.

How to improve it:

  • Enhance your onboarding process to highlight customer value from the get-go
  • Regularly engage with customers through personalized communication
  • Continuously improve your product based on customer feedback
  • Offer high-quality customer support

2. Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue is a valuable metric for subscription-based businesses. It represents the predictable revenue generated from your customer base each month.

Formula:

MRR = Number of customers x Average revenue per customer

Why it’s important: Monthly Recurring Revenue helps you measure your business’s financial health and levels of growth. MRR is also a key indicator of customer retention, as it reflects both new and retained customer revenue.

How to improve it:

  • Focus on upselling and cross-selling to existing customers
  • Implement a tiered pricing strategy to capture different customer segments
  • Reduce churn rate by addressing pain points and improving customer satisfaction
customer retention rate and monthly recurring revenue formulas

3. Customer Lifetime Value (CLV)

Customer Lifetime Value shows the total revenue a business can expect from a single customer account throughout their relationship with the company.

Formula:

CLV = Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

Why it’s important: Customer Lifetime Value helps you understand the long-term value of retaining customers. CLV can also help with decisions on customer acquisition costs and retention strategies.

How to improve it:

  • Boost user engagement with personalized experiences (Example: You could send a customized email on their birthday)
  • Offer loyalty programs or rewards for long-term customers
  • Continuously add value to your product or service (like new features)
  • Provide exceptional customer service to build strong relationships

4. Product Stickiness

Product Stickiness measures how often users engage with your product. To calculate it, use the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU).

Formula:

Product Stickiness = DAU / MAU

Why it’s important: Turns out, it’s good to be sticky. In fact, a high stickiness ratio indicates that users find your product valuable and interact with it regularly, which suggests they’re more likely to stay using it.

How to improve it:

  • Identify and promote your product’s sticky features
  • Use in-app messaging to lead users to these features
  • Gamify some elements to encourage regular usage
  • Use behavior data to regularly optimize the user experience 
customer lifetime value and product stickiness formulas

5. Repeat Purchase Rate (RPR)

While more commonly used in e-commerce, the Repeat Purchase Rate can be adapted for SaaS businesses to measure the percentage of repeat customers (those who renew their subscriptions or upgrade their plans).

Formula:

 RPR = Number of Repeat Customers / Total Number of Customers

Why it’s important: A high Repeat Purchase Rate indicates strong customer loyalty, meaning they’re happy with your product or service.

How to improve it:

  • Build an easy-to-follow customer onboarding process
  • Provide excellent customer support
  • Regularly release new features or improvements
  • Offer incentives for long-term commitments, new subscriptions, or upgrades (e.g., 10% discount)

6. Expansion MRR

Expansion MRR measures the additional annual recurring revenue (ARR) from existing customers through upselling, cross-selling, or plan upgrades.

Formula:

Expansion MRR = MRR from upgrades + MRR from cross-sells - MRR from downgrades

Why it’s important: Expansion MRR is a big indicator of customer satisfaction and the potential to expand your existing customer base.

How to improve it:

  • Identify upsell opportunities based on customer usage patterns
  • Create clear upgrade paths with tangible benefits
  • Educate customers on advanced features that might require upgrades
  • Offer time-limited promotions for upgrades or additional services
repeat purchase rate and expansion mrr formulas

7. Customer Satisfaction Score (CSAT)

As the name suggests, Customer Satisfaction Score measures how satisfied customers are with your product or service, typically on a scale of 1-5 or 1-10.

Formula:

 CSAT = (Number of satisfied customers / Total number of survey responses) x 100

Why it’s important: Because the Customer Satisfaction Score gives direct feedback on customer satisfaction, it helps you spot any problem areas and fix them before the churn rate rises.

How to improve it:

  • Regularly collect customer feedback — and act on it
  • Respond to customer complaints quickly and provide a rapid solution
  • Keep up with user needs, constantly improving your product 
  • Offer 24/7 customer support and education

8. Net Promoter Score (NPS)

Net Promoter Score measures customer loyalty by asking how likely customers are to recommend your product or service to others, typically on a scale of 0-10.

Formula:

NPS = % of Promoters - % of Detractors

Promoters = Customers who rate 9-10
Passives = Customers who rate 7-8
Detractors = Customers who rate 0-6

Why it’s important: Like RPR, Net Promoter Score is a strong indicator of customer loyalty. It can predict your customer retention rate and potential growth through word-of-mouth referrals.

How to improve it:

  • Follow up with detractors to address their concerns
  • Promote your best case studies and testimonials
  • Use feedback to continuously improve your product
  • Create a referral program to encourage promoters to spread the good word
customer satisfaction score and net promoter score formulas

9. Customer Health Score

The Customer Health Score is a metric that combines various indicators to predict the likelihood of a customer continuing to use your product or churning.

Formula: The exact formula differs by company, but typically includes factors such as:

  • Product usage frequency
  • Feature adoption
  • Customer support interactions
  • NPS or CSAT scores
  • Payment history

Why it’s important: Customer Health Scores keep you one step ahead, so you can quickly identify at-risk customers and act before they churn.

How to improve it:

  • Develop a clear scoring system based on key indicators of customer success
  • Use automation tools to alert customer success teams when scores drop
  • Adopt targeted interventions for customers with low health scores
  • Regularly review and refine your health score criteria

10. Revenue Churn Rate

Revenue Churn Rate tracks the percentage of recurring revenue lost due to cancellations or downgrades over a certain time period.

Formula:

Revenue Churn Rate = (MRR at start of period - MRR at end of period) / MRR at start of period

Why it’s important: Revenue Churn Rate helps you understand the impact of customer churn on your business’s bottom line. It can also highlight any revenue issues with specific customer segments or pricing tiers.

How to reduce it:

  • Implement a customer success program
  • Offer incentives for longer-term subscriptions, such as discounts or company swag
  • Regularly communicate the value your product provides (e.g., through social media or email campaigns)
  • Address customer concerns quickly and effectively
revenue churn rate formula

Tip: You don’t need to remember every rate formula by heart — just bookmark this article and refer back to the list whenever you need. 

How to Measure Customer Retention

Now you’ve figured out how to calculate customer retention KPIs and metrics, you’re ready to optimize the process. Here are some top tips to measure customer retention the right way:

  1. Define your time period: Do you want to measure customer retention rate monthly, quarterly, or annually?
  2. Choose your metrics: Select the KPIs that are most relevant to your business model and goals.
  3. Set up tracking: Use customer relationship management (CRM) software, analytics tools, or specialized retention tracking software to collect and analyze your data.
  4. Establish benchmarks: Research industry standards and set realistic goals (consider the SMART method here) for your retention metrics.
  5. Review and analyze: Set up a regular cadence to review your customer retention metrics and analyze trends.
  6. Segment your data: Look at retention rates across different customer segments, such as pricing tiers, industries, or user personas.
  7. Act on insights: Use the data you collect to inform product decisions, customer success strategies, and overall business planning.
how to measure customer retention steps

Strategies to Improve Your Customer Retention Rate

So, you’ve ticked “Measure retention KPIs” off your list. What's next? It’s time to put your plan into action. We’ve touched on some of these above, but here’s a handy list of proven customer retention strategies:

  1. Personalized onboarding: Tailor the onboarding experience so new users get a good first impression. Tip: Tools like Userflow can help you create interactive guides and tutorials.
  2. In-app messaging and email campaigns: Use targeted communications, like in-app notifications and customized emails, to pique users’ interest. These channels are the best way to highlight new features and provide insider tips.
  3. Top-notch customer service: It’s a given that you should respond to customer inquiries quickly, but you can also take it a step further and reach out to users who may be struggling.
  4. Use customer feedback and surveys: Real customer feedback can be a goldmine for product improvements. Collect these nuggets and turn them into actions that will make your product better.
  5. Regularly update and improve your product: Keep an eye on market trends, as well as what your competitors are doing, and use these insights to decide new features and enhancements for your product.
  6. Create a customer loyalty program: Who doesn’t love a perk? Offer exclusive benefits to your loyal customers, such as early access to new features or bespoke pricing.
  7. Provide educational resources: Share webinars, tutorials, and knowledge base articles, so your users get the most out of your product. This is especially important when introducing a new feature, as it will increase user uptake.
  8. Build a community: Create forums, user groups, or events where customers can connect and share best practices.
strategies to improve customer retention rate

How Userflow Can Boost Your Customer Retention Rate

At Userflow, we’re big on customer retention. Our whole platform is designed to help SaaS companies improve their retention metrics, right from the very start of the user journey. Here’s how Userflow can help you track and boost your customer retention rate:

  • Interactive onboarding: Personalize the onboarding experience with step-by-step guides, tooltips, and checklists to improve product adoption and reduce time to value.
  • User segmentation: Target specific user groups with tailored in-app messaging and guides based on their behavior, role, or other attributes.
  • Product usage tracking: Monitor how users interact with your product, identifying areas of high engagement and potential friction points.
  • NPS and CSAT surveys: Easily implement in-app surveys to gather feedback and measure your customer satisfaction score.
  • Feature adoption tracking: Track how users adopt features and create targeted campaigns to increase usage.
  • Analytics and reporting: Access detailed analytics on user behavior, guide completion rates, and other key metrics to inform your retention strategies.
  • Integration capabilities: Connect Userflow with your existing tools like Segment, Intercom, or Salesforce to create a unified view of your customer data.

No more guesswork needed — with Userflow in your corner, you can take a data-driven approach to master your retention KPIs and metrics, ultimately boosting your customer retention rates.

boost your customer retention rate with userflow

FAQs on Customer Retention KPIs

Q: How often should I measure retention KPIs and metrics?
A: It depends on your business model. Most SaaS companies should review retention metrics at least monthly. However, some metrics, like product usage, should be monitored daily or weekly.

Q: What’s a good customer retention rate?
A: Retention rates vary by industry but for SaaS businesses, a retention rate of 35-45% over a 12-month period is considered good. Anything above 50% is excellent.

Q: How do I know which retention KPIs are most important for my business?
A: Focus on metrics that match your business model and growth stage. Early-stage startups might prioritize Product Stickiness, while more mature companies might focus on Customer Lifetime Value.

Q: Can improving retention KPIs impact customer acquisition?
A: Absolutely! Happy, retained customers are more likely to refer new customers. What’s more, focusing on retention can help you optimize your customer acquisition costs as it ensures you target the right customers.

Q: How do I balance focusing on retention vs. acquisition?
A: While both are important, many successful SaaS companies follow the 40/40/20 rule: 40% of resources on acquisition, 40% on retention, and 20% on brand building. However, the exact balance will depend on your growth stage and business goals.

The Last Word on Customer Retention KPIs

Convinced on the importance of customer retention KPIs? By focusing on key metrics like Customer Retention Rate, Monthly Recurring Revenue, Net Promoter Score, and Customer Lifetime Value, you gain valuable insights into user behavior, so you know exactly what steps to take to reduce customer churn rate.

Remember, improving retention is not a one-and-done deal — it’s an ongoing process that requires continuous monitoring, analysis, and optimization. That’s why it’s a good idea to have a tool like Userflow on hand, so you can streamline the process and create tailored experiences that keep your customers coming back for more.

Ready to send your customer retention rate skyrocketing? Sign up for a free trial of Userflow today and see how our comprehensive suite of tools can help you track, analyze, and improve your retention KPIs. Your future self (and your customers) will thank you!