Renewal Rate Calculator [2025]

Predictable Revenue

A high renewal rate indicates that a company can rely on a consistent stream of revenue from its existing customer base.

Customer Loyalty

The renewal rate is a direct reflection of customer satisfaction and loyalty. Customers who renew are demonstrating their continued trust in your product or service.

Reduced Acquisition Costs

It's generally more cost-effective to retain existing customers than to acquire new ones. A high renewal rate means you're maximizing the return on your customer acquisition investments.

What is a good renewal rate?

A "good" renewal rate depends on the industry and business model. However, for SaaS companies, a renewal rate of 80% or higher is generally considered healthy. Top-performing SaaS companies often achieve renewal rates above 90%.

What's the difference between renewal rate and retention rate?

While often used interchangeably, there's a subtle difference. Retention rate measures the percentage of customers a company retains over a period, regardless of whether their contracts were up for renewal. Renewal rate specifically measures the percentage of customers who actively renew their contracts at the end of a subscription period.

How can I improve my renewal rate?

• Focus on Customer Success: Ensure that your customers are achieving their desired outcomes by using your product or service.
• Proactive Communication: Reach out to customers well before their renewal date to address any concerns and reinforce the value they're getting.
• Gather Feedback: Regularly collect feedback from customers and use it to improve your product, service, and renewal process.
• Offer Incentives: Consider offering discounts, exclusive features, or other incentives to encourage renewals.
• Streamline the Renewal Process: Make the renewal process as easy and frictionless as possible.