What is a good retention rate?

A good retention rate varies by industry, but it generally means users keep coming back to your product over a specific period. For SaaS products, over 35% retention after eight weeks is elite. For media and finance, 25% retention at the same mark is top-tier. Mobile apps can see 6-20% retention depending on the app type. These benchmarks help you see where you stand compared to others in your field.

Why is a good retention rate important?

A high retention rate is crucial for several reasons. It directly indicates customer satisfaction and loyalty. When users consistently return to your product, it shows they find value in what you offer. This ongoing engagement is a strong signal that you're meeting or exceeding customer expectations.

Retention is also essential for sustainable revenue growth. When users stick around, they continue to contribute to your revenue stream, often through repeat purchases or subscriptions. This ongoing income is vital for long-term business health and helps ensure steady growth over time.

Moreover, a good retention rate reduces the need for constant new customer acquisition, which is typically more costly and time-consuming. Acquiring new customers involves marketing spend, sales efforts, and onboarding processes. In contrast, retaining existing customers usually costs less and delivers a higher return on investment.

By focusing on retaining your current users, you not only save money but also build a loyal customer base that's more likely to refer others to your product. This organic growth loop further enhances your business stability.