What is retention rate and how to calculate it?

Retention rate — this metric shows the percentage of users who continue to use a product or service after a certain period following their first interaction.

Formula for calculating retention rate:

Retention Rate = (Number of users who returned in period X) / (Total number of users in the initial period) * 100%

For example, if 1000 users registered in January and 300 of them returned in February, the retention rate for the month would be 30%.

This metric helps understand user loyalty and the long-term effectiveness of the product.