What Is Renewal Rate?
Renewal rate is the percentage of customers, contracts or revenue that renew at the end of their term. It's a direct measure of retention at the renewal moment, and can be calculated by logo count or by revenue depending on what you're managing.
Key takeaways
- Renewal rate = renewed ÷ up-for-renewal, measured by count or by revenue.
- It captures retention specifically at the contract renewal point.
- It's closely related to, but distinct from, churn and gross retention.
How to calculate it
Renewal Rate = Renewed ÷ Up-for-Renewal × 100
Count customers/contracts for logo renewal rate, or MRR/ARR for revenue renewal rate.
Logo vs revenue renewal rate
Logo renewal rate counts how many customers renewed; revenue renewal rate weights by how much revenue renewed. As with churn, the two can diverge — so pick the lens that matches what you're trying to manage.
Frequently asked questions
How do you calculate renewal rate?
Divide the number (or revenue) of customers who renewed by those up for renewal in the period, then multiply by 100.
What's the difference between renewal rate and retention rate?
Renewal rate measures the renewal event specifically; retention rate can measure customers kept over any period, including those not yet up for renewal.
What's a good renewal rate?
It depends on segment and contract length, but strong B2B SaaS products renew the large majority of revenue, with enterprise typically higher than SMB.
Related service: Manage renewals in HubSpot