Ep 189: How to Calculate Churn and Retention Rate

Sep 30

How to Calculate Churn and Retention Rate

Most memberships lose money because they don't track retention.

That ends today.

Retention rate tells you exactly how many members stick around month to month. It impacts lifetime value, churn, and revenue growth.

If you're not tracking this, you're flying blind.

Here’s how to fix that.

What Is Retention Rate?

Your membership retention rate measures how many members stay active from the start to the end of a given month.

Retention rate = stickiness.

If you’re not retaining members, you’re constantly stuck in acquisition mode.

Why Retention Rate Matters

Determines customer lifetime value
Helps you forecast recurring revenue
Reveals how fast you need to acquire new members
Drives long-term profitability

Retention is your growth strategy.

The Formula for Retention Rate

Use this simple formula:

(E − N) ÷ S × 100 = Retention Rate (%)

Where:

E = Members at the end of the month
N = New members gained during the month
S = Members at the start of the month

You subtract the new members from your end-of-month total. Then divide that by your start-of-month total. Multiply by 100 to get a percentage.

Example Breakdown

Let’s say:

You start May with 100 members
You gain 20 new members in May
You end May with 110 members

Apply the formula: (110 - 20) ÷ 100 × 100 = 90% retention

You kept 90% of your members from April to May.

Translation: 1 out of every 10 members left (10%). That’s your churn rate.

What Your Retention Rate Tells You

High churn = weak experience or poor fit
Steady retention = sustainable growth
Small changes = big profit increases

Retention isn’t sexy, but profit is.

Stop Guessing. Start Tracking.

Here’s how to keep this simple:

Track start-of-month, new, and end-of-month members
Plug numbers into the formula
Repeat monthly

Make it part of your routine.

Shortcut: Free Retention Calculator

If you want the easy button, I built it for you.

My free Membership Metrics Calculator gives you:

Instant retention rate
7 other key metrics
Lifetime value per member

Grab it at memberltv.com

Know Your Numbers. Grow More Revenue.

Keep more members. Grow more revenue.

Retention rate is the #1 metric every recurring revenue business should track.

Don’t build for more members. Build to keep the ones you have.

Apply now at joinretain.com

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Shana Lynn