Retention rate: which one you're measuring, and how to move it
There are two retention rates, and they get swapped mid-meeting. One counts subscribers who stay on your list. The other counts customers who come back. Know which you're quoting.
- 113Retention Rate
- The percentage of subscribers who remain on your email list over a given period.
- List version
- Subscribers who stay on your list over a period
- Customer version
- Customers from one period who buy again in the next
- Compare against
- Your own figure, on the same window, a year earlier
- Opposite of
- Churn, measured over the same window
The list version, and the version founders usually mean
Measured on your list, retention tells you how many subscribers are still there at the end of a period. It matters for reach. But a list can keep every subscriber and still lose its customers, because staying subscribed costs nothing.
Customer retention asks the question your forecast cares about. Of the people who bought from you last period, how many bought again this period? That's the one to put in front of a board.
Working out both retention rates without a data team
- List retention: take the subscribers you had at the end of the period, subtract the ones who joined during it, divide by the number you started with, and multiply by a hundred.
- Customer retention: take everyone who ordered in one period, count how many ordered again in the next, divide that by the first group, and multiply by a hundred.
Fix the window before you start, and keep it. A twelve-month window and a three-month one give different answers, and both are right. Read the list version next to engagement too, because people who stopped opening rarely bother to unsubscribe.
What moves customer retention, and what doesn't
- A first order that arrives on time and matches the photos
- A post-purchase flow that helps people use what they bought
- A second ask timed to when the product runs out, not to the calendar
- A reason to come back that isn't a code, like a new range, a perk or early access
- A win-back for people who've drifted past their usual gap
More discounts and a busier newsletter rarely move it. They bring back people who were coming back anyway, at a lower margin. The gap between a first order and a second is usually where the loss sits, and second purchase rate is the number that shows it.
Retention rate next to repeat purchase rate and churn
| Number | The question it answers | Watch out for |
|---|---|---|
| List retention | Are subscribers staying on the list? | Silent subscribers flatter it |
| Customer retention | Are last period's customers buying again? | The window changes the answer |
| Repeat purchase rate | Did a first order lead to a second? | It's narrower than retention |
| Churn | Who left, and how? | Unsubscribes and bounces lumped together |
Related terms
FAQs
What is a good customer retention rate for an online shop?
There isn't one you can borrow. A shop selling coffee should see far more customers come back than one selling sofas, so comparing the two tells you nothing. Measure yours on a fixed window, then compare it with the same window last year. That's the only benchmark with your customers in it.
Is retention rate the same as repeat purchase rate?
Close, but not the same. Repeat purchase rate asks whether a first order led to a second. Customer retention asks whether last period's customers are still buying this period, whether they're on their second order or their tenth. Both are worth tracking, and they move for different reasons.
Why is our list retention high when email revenue is falling?
Because staying subscribed is free. People stop opening long before they unsubscribe, if they ever do, so the list keeps its size while its attention drains away. Look at how many subscribers clicked or bought in recent months. That number falling under a steady list size is the real story.
Rather we explained it on your own account?
Bring your Klaviyo account to a growth consultation. We'll walk through what this means for your numbers, in plain English, and what we'd fix first.
Half an hour with Theo, our founder.
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