How To Calculate User Retention & Drive It Higher Fast

If you want to know how to calculate user retention and improve it fast, I’ve got some practical strategies to share with you.

When I think about user retention, I focus on these key factors:

• Understanding the percentage of users who continue using a product over time.
• Identifying what makes loyal users stick around.
• Finding ways to keep them engaged and reduce churn.

For subscription-based businesses, retaining users is just as important as acquiring new ones.

User retention is a direct reflection of how well your product delivers value; not just a metric.

From my conversations with SaaS founders and operators, I’ve learned that increasing retention often comes down to understanding why people leave in the first place.

How To Calculate User Retention: Heres’s A Quick & Easy Formula

Tracking user retention starts with a simple formula:

The User Retention Formula

Here is the only user retention formula you need:

User Retention Rate (%) = ((Users at end of period - New users acquired) / Users at start of period) x 100

This formula gives you a clear picture of how well you’re keeping users over time.

I always recommend tracking this metric at different intervals - weekly, monthly, and quarterly - to identify trends.

The best businesses analyze these retention numbers closely and dig into why users are staying or leaving.

Making Sense Of Cohort Analysis

One of the most valuable tools for measuring retention is cohort analysis.

This approach involves grouping users based on when they signed up and tracking their behavior over time.

Using cohort analysis, you can see patterns that wouldn’t be obvious in overall retention metrics.

For example, you might find that users who engage with a specific feature early on are far more likely to stick around.

You Need To Track Active Users

It’s not just about how many users you have, but how many are actively engaging with your product.

Tracking Daily Active Users (DAU) and Monthly Active Users (MAU) can give you deeper insights into retention trends.

A steady decline in active users is often an early warning sign of churn that needs to be addressed.

Are you…

• Seeing users drop off after the first month?
• Struggling to get people to engage with your product long-term?
• Unsure what changes will have the biggest impact on retention?

Many SaaS businesses face the same challenges.

The good news is that with the right approach, you can start making changes today that have a big impact.

5 Ways To Drive Retention Higher, Fast

Improve Your Onboarding Experience

First impressions matter.

If users don’t immediately see value, they won’t stick around.

I’ve seen businesses double their retention rates just by improving onboarding.

Make sure users understand the benefits of your product from day one.

Use tooltips, in-app guidance, and clear messaging to help them succeed quickly.

Build Engagement Habits Early

Encouraging users to develop a habit of engaging with your product early on increases the likelihood that they’ll stick around.

I’ve worked with businesses that saw retention skyrocket after introducing daily check-ins, streaks, and rewards for consistent use.

Making engagement fun and rewarding keeps users coming back.

Use Customer Feedback To Your Advantage

If you don’t know why users are leaving, how can you fix it?

I always recommend collecting feedback at key moments, especially in cancellation flows.

Understanding why someone is leaving allows you to address their concerns and potentially keep them.

Surveys, in-app prompts, and personal outreach can all provide valuable insights into what’s driving churn.

Personalize The User Experience

Generic experiences don’t keep users engaged.

Personalized recommendations, targeted messages, and behavior-based offers all help boost retention.

I’ve spoken with businesses that saw retention rates jump just by using personalized email sequences to re-engage inactive users.

AI-driven personalization can help create a more tailored experience that keeps users invested in your product.

Offer Flexible Subscription Options

Rigid subscriptions can push users away.

Allowing users to pause, downgrade, or customize their plans keeps them around longer.

I’ve seen companies cut churn significantly just by introducing flexible plans that adapt to user needs.

Giving users control over their subscriptions reduces the likelihood that they’ll cancel out of frustration.

You can push flexible subscription plans and discounts as part of your cancellation flow.

Strengthen Customer Support

Sometimes, users leave because they can’t get the help they need.

Providing fast, effective customer support can make a big difference in retention rates.

Live chat, AI chatbots, and proactive customer outreach can resolve issues before they lead to churn.

Small Changes To Your Cancellation Flows Make All The Difference

I’ve spent a lot of time helping businesses analyze and improve user retention.

What I’ve learned is that small, strategic changes can make a huge difference.

Retention isn’t about convincing users to stay, it’s about making sure they continue to find value in your product.

If you can identify why users leave and proactively address those pain points, you’ll see your retention numbers climb fast.

Retention is a long-term game, and the businesses that win are the ones that continuously optimize and refine their approach.

I hope these strategies help.

You can start improving user retention today with Raaft.

Our platform allows you to create custom cancellation flows which neatly integrate into your SaaS product.

When users choose to cancel their subscription, a tailor-made cancellation flow is exactly what’s needed to prevent churn.

Use Raaft for free, forever.