Renewal Rate Calculator

How to use the renewal rate calculator

To calculate the renewal rate, enter the number of customers or subscribers who renewed their subscription/ membership/ contracts in a given period and the total number of people who were up for renewal. The tool will instantly calculate your renewal rate, providing insights into how well you are retaining your customers.

Renewal rate formula

Renewal Rate (%) = (Number of Customer Renewals/Total Number of Customers Up for Renewal) × 100

Understanding the renewal rate result

The ideal renewal rate will depend on your industry, targets and type of product. In general,

• A high renewal rate indicates strong customer satisfaction, loyalty, and that the perceived value of your product or service is high.
• A low renewal rate signals potential challenges in retaining customers. This may require closer analysis of customer experience, product fit, or your pricing strategy.

When to calculate renewal rate

Some of the key scenarios where you should calculate renewal rate include:

• During monthly, quarterly, or annual performance reviews
• After implementing new customer engagement, onboarding, or support strategies
• To compare the effectiveness of different pricing models, contract terms, or product features
• While assessing the impact of product updates, feature releases, or service changes on customer loyalty
• To benchmark against industry standards or competitors' renewal rates

How to calculate Renewal rate with example

Imagine that your company had 800 customers up for renewal last quarter, and 640 of them renewed their contracts. You can calculate your renewal rate as follows:

Renewal Rate (%) = (Number of Customer Renewals/Total Number of Customers Up for Renewal) × 100

Renewal Rate = (640/800) × 100 = 80%

In this example, your renewal rate is 80%, which means that 80% of your customers renewed their contracts or subscriptions.

How to improve your renewal rate

You can improve your renewal rate by using the following strategies:

• Provide exceptional customer support to build loyalty.
• Regularly communicate value through updates, newsletters, or case studies.
• Offer incentives or discounts for early renewals.
• Monitor customer satisfaction and address any concerns proactively.
• Implement a personalized renewal reminder strategy.
• Use feedback to enhance your product or service.
• Build a robust customer onboarding and engagement program.