What is Retention Rate?

Retention rate measures the percentage of users who continue to use a product or service over a specific time period after their initial interaction. It's typically measured at different intervals like Day 1, Day 7, Day 30, or monthly and yearly periods.

When to track Retention Rate?

Retention rate should be monitored continuously, especially for subscription services, mobile apps, SaaS products, or any business where customer lifetime value depends on ongoing usage. It's crucial for understanding product-market fit.

When might Retention Rate be misleading?

Retention rates can be misleading if measured over inappropriate time periods, if they don't account for seasonal usage patterns, or if they don't distinguish between different user segments or acquisition channels.

What is the importance of Retention Rate in Analytics?

Retention rate is a key indicator of product value, directly impacts customer lifetime value, helps identify product issues early, guides product development priorities, and is essential for sustainable business growth.