Top 6 Customer Retention KPI to Track for SaaS Growth

What are customer retention KPIs?

‍Customer Retention KPIs help you measure how well you're maintaining long-term relationships with your paying customer accounts.

Customer Retention KPI vs. Metric: What is the difference?

When it comes to tracking customer retention, one of the most common sources of confusion is the difference between KPIs and metrics.Let’s break down the key difference between the two:

Customer retention KPI 

A KPI is a focused number your whole team tracks to see if you’re hitting your retention goals. It’s usually reported monthly or quarterly and tied to big-picture business results.

For example, your customer retention rate might be 85%. If that number drops, everyone knows it’s a problem to fix because it means more customers are leaving.

Customer retention metric

A customer retention metric is a supporting number that helps explain why your retention KPI moves up or down. For example, the average number of weekly logins per user can show how engaged customers are.

If logins drop, it might explain why retention rate falls later. This metric helps you spot problems early and take action before customers churn.

Top 6 customer retention KPIs

Below are six essential customer retention KPIs for B2B SaaS companies

1. Customer Retention Rate (CRR)

Customer Retention Rate measures the percentage of customers who continue doing business with you over a given period. 

CRR = ((Customers at end of period – New customers acquired) / Customers at start of period) × 100

CRR is usually calculated using CRM or subscription management software.The simple equation mentioned above is used within the software to provide a clear retention percentage that teams monitor regularly.

2. Customer Churn Rate

Customer Churn Rate shows the percentage of customers lost during a specific period. Like CRR, it’s measured at the account level and indicates the rate at which customers leave or cancel.

Churn Rate = (Customers Lost During Period / Customers at Start of Period) × 100

Churn is tracked through billing or subscription platforms such as Zuora or Chargebee. These systems log cancellations and expirationsto quantify customer loss, helping teams understand retention challenges clearly.

3. Net Revenue Retention (NRR)

Net Revenue Retention measures how much revenue you keep from existing customers after accounting for expansions, contractions, and churn. 

NRR = ((Starting MRR + Expansion MRR – Contraction MRR – Churned MRR) / Starting MRR) × 100

NRR is calculated via subscription analytics tools like ChartMogul or Baremetrics that track monthly recurring revenue (MRR). These platforms automate data collection and apply the formula to give a revenue-focused view of retention performance.

4. Gross Revenue Retention (GRR)

Gross Revenue Retention measures the percentage of recurring revenue retained from existing customers, excluding any expansion revenue. 

GRR = ((Starting MRR – Contraction MRR – Churned MRR) / Starting MRR) × 100

GRR is tracked through the same subscription management platforms as NRR. It highlights revenue lost due to churn or downgrades, helping companies isolate and address retention problems.

5. Time to First Value (TTFV)

Time to First Value measures how long it takes new customers to reach their first meaningful success with your product. It’s measured at the user level, focusing on onboarding effectiveness.

TTFV = Date of First Value – Customer Start Date

TTFV is typically measured with product analytics tools that track user behavior and milestones. These tools capture the key dates automatically and calculate the duration, helping teams optimize the onboarding experience.

6. Customer Health Score

Customer Health Score is a composite metric combining various signals like product usage, support tickets, and customer feedback to assess how likely a customer is to stay. 

There’s no standard formula; instead, it’s a weighted score based on factors like usage frequency, Net Promoter Score (NPS), and support interactions.

This KPI is often calculated in customer success platforms like Gainsight or Totango, which aggregate data from multiple sources. The software applies customized formulas to generate a health score that helps teams proactively identify and retain at-risk customers.

4 key challenges when tracking customer retention KPIs

Tracking customer retention KPIs isn’t always straightforward. Let’s look at a few of the biggest hurdles and how they can impact your data.

1. Defining what counts as a “customer”

In B2B SaaS, your users aren’t always your customers. Teams often get confused on “are we tracking individual users, entire teams, or whole companies?”. Different products and pricing models make this even trickier.

To prevent this, get your team together and agree on what a 'customer' really means for your business. Once you’re aligned, document that definition so everyone is tracking the same way.

2. Tracking across multiple touchpoints

Customers engage with your product in many ways like logins, purchases, support requests, and more. Gathering all this data into one place can be difficult, especially if your tools don’t integrate smoothly. 

Invest in tools that integrate well across departments like customer success, product analytics, and billing. Use platforms like Segment or Zapier to connect your data sources and create a single view of customer activity.

3. Dealing with delayed or infrequent data

Retention trends usually unfold over weeks or months. Waiting too long to analyze data can delay important decisions, but acting on incomplete or early data can cause mistakes. Finding the right balance to measure retention accurately and on time is a common challenge.

Use dashboards or analytics tools that automatically update with the latest customer activity like logins, renewals, or usage trends. Then, schedule monthly review meetings to analyse full retention performance. This gives you timely insights without jumping the gun on incomplete data.

4. Accounting for customer lifecycle differences

Customers vary widely based on industry, contract length, or how they use your product. Treating all customers the same when measuring retention can mask important differences and reduce the accuracy of your insights.

Segment your retention analysis by customer type, plan, or lifecycle stage. This gives you a more nuanced view of retention and helps identify which groups are at higher risk of churn or more likely to grow.

Rounding up

So there you have it, that’s exactly how you measure customer retention KPIs. Hopefully, you now have enough information to start off on the right foot and improve results in your business.

And if you’re looking for software that helps you provide better customer support so you can improve retention, then Mevrik is probably the right fit.

To get started, why don’t you try out Mevrik’s 14 days free trial and see how it can help you build stronger, longer-lasting customer relationships?

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