Renewal rate is the percentage of customers who choose to continue their subscription or service after the initial contract period ends.

It’s a key metric for subscription-based businesses and reflects customer satisfaction, product value, and long-term revenue stability.

Formula:

Renewal rate = (Number of customers renewed ÷ Number of customers up for renewal) × 100

Example:

If 80 out of 100 customers whose contracts were expiring decide to renew, your renewal rate is 80%.