Academy · Lesson 5 · Retention
Retention measures who stays,
without counting the newcomers.
Customer retention rate answers a simple question: how many of the customers you had at the start of a period are still there at the end? Most mistakes come from counting new customers or defining "active" differently every month. This lesson shows the formula, a revenue variant and the limits.
What does "the customer is still here" mean in your business?
2 questions in the plan. First question: “How many of last year's clients do we still serve?”
The formula
Define Count three numbers
“How many of last year's clients do we still serve?”
(Customers at end − new customers in period) ÷ customers at start.
Customer retention rate answers a simple question: how many of the customers you had at the start of a period are still there at the end? Most mistakes come from counting new customers or defining "active" differently every month. This lesson shows the formula, a revenue variant and the limits. Example (fictional): 120 customers on 1 January, 126 on 31 March, 18 of them new in the quarter. (126 − 18) ÷ 120 = 108 ÷ 120 = 90% retention for the quarter.
From reading to doing
Your questions. For your numbers.
Prepare an evaluation.
2 questions selected
- “How many of last year's clients do we still serve?”
New customers are subtracted before dividing.
- “Do our customers buy again?”
The preview's approximation is not a rate and is never called one.
Define, count, add revenue.
without counting the newcomers.
Definition first, then the three counts, then a second view on revenue, because a few large customers can make the customer count misleading.
“How many of last year's clients do we still serve?”
New customers are subtracted before dividing.
DefinePick the period and the activity. For service firms often a quarter with at least one invoice, for shops a year with at least one order, for SaaS a month with a running subscription.
Count three numbersCustomers at start, customers at end, new customers in between. Then the formula. Someone who joined and left within the period counts neither at the start nor at the end.
Add revenueRevenue retention = (revenue of the starting customers at the end) ÷ (their revenue at the start). It can exceed 100% when existing customers buy more. Show both numbers side by side.
Customers at startas of 1 January · 120
Customers at endas of 31 March · 126
New customers in periodstarted between the two dates · 18
Retention(126 − 18) ÷ 120 · 90%
The playbook
Define, count, add revenue.
Retention in three steps
without counting the newcomers.
Define → Count three numbers → Add revenue
- 01
Define
Pick the period and the activity. For service firms often a quarter with at least one invoice, for shops a year with at least one order, for SaaS a month with a running subscription.
Example · Willowcourt Advisory (fictional)“How many of last year's clients do we still serve?”
120 at start, 126 at end, 18 new - 02
Count three numbers
Customers at start, customers at end, new customers in between. Then the formula. Someone who joined and left within the period counts neither at the start nor at the end.
Example · Nordwind Travel Goods (fictional)
Count per month as an approximation“Do our customers buy again?” - 03
Add revenue
Revenue retention = (revenue of the starting customers at the end) ÷ (their revenue at the start). It can exceed 100% when existing customers buy more. Show both numbers side by side.
Example · Taktwerk Software (fictional)“Are our existing customers growing with us?”
Revenue of the same customers at the end
Your quality check
Will the evaluation hold up?
Tick what you have checked. Your selection stays in this view only.
0 of 3 points checked
What this article is based on.
Editorial page with fictional examples (Willowcourt Advisory (fictional), Nordwind Travel Goods (fictional), Taktwerk Software (fictional)). The guide describes an approach; where Peak Analytics covers a step today, the page says so explicitly. No measurements, no customers, nothing is sent or saved.
- Editorial demo
Synthetic numbers in the browser. No real data is read, computed or saved.
- Checked evidence
Peak Analytics is a preview: pivot over orders, receipts, tasks, goals and files; count, sum, average, minimum, maximum; day to year; CSV export; sharing a released snapshot; largest value as a task.
peak-one app/w/[scope]/apps/analytics, lib/bi/model.ts, lib/views/pivot.ts, lib/bi/share.ts · checked 2026-10-29
The customers who stay count twice.
Lesson 6 is about the revenue that stays: MRR and ARR.
Frequently asked questions
Do I need Peak Analytics for this lesson?
No. The lesson works with any spreadsheet. Peak Analytics is a preview; where it covers a step today, the page says so.
How do I calculate customer retention rate?
(Customers at end minus new customers in the period) divided by customers at start. In the example: (126 − 18) ÷ 120 = 90%.
Why can revenue retention exceed 100%?
Because existing customers can buy more than lost customers took away. Always show it next to customer retention.
What does the Peak Analytics preview show for this?
Orders per month by new and returning customer. That is an approximation for shops, not a rate. Retention evaluations are planned.