The formula
Client retention rate = (clients at the end of the period - new clients won in it) / clients at the start x 100
You're counting how many of your starting clients are still with you. A rate of 90% means you kept 9 of every 10. Gainsight's guide uses this formula.
As of November 2026.
How to calculate retention rate
Count three numbers for one period: the clients you had on day one, the clients you have on the last day, and the new clients you won in between. Take the new ones off the end count. Then divide by the start count.
Worked example, with made-up figures: Harbour Lane Supplies starts the year with 200 clients and ends it with 210. Its reps won 30 new clients. (210 - 30) / 200 = 180 / 200, so retention is 90%. It lost 20 of the clients it started with, so churn is 10%.
Leave the new clients in and it reads 210 / 200, or 105%, which hides the 20 who left.
Gross and net revenue retention
A client count treats a S$50 account and a S$5,000 account the same. When your clients differ in size, work out revenue too. Both versions start from the monthly revenue of the clients you had on day one, and new clients stay out.
Gross revenue retention = (starting revenue - revenue lost - cuts) / starting revenue x 100
Net revenue retention = (starting revenue - revenue lost - cuts + upsells) / starting revenue x 100
Worked example, with made-up figures: your clients start at S$50,000 a month. The ones who left took S$4,000, and others cut S$1,000. Others bought S$6,000 more. Gross is S$45,000 / S$50,000, or 90%. Net is S$51,000 / S$50,000, or 102%.
Net can pass 100%, because upsells can outrun what left. Gross can't, so it shows the leak that net covers up.
Upsell rate
Upsell rate = clients who bought more in the period / clients at the start x 100
Worked example, with the same made-up 200 clients: 24 of them added something during the year, so the upsell rate is 24 / 200 = 12%. Retention says how many stayed, and upsell rate says how many of them grew.
Rep retention uses the same sum
Retention rate in HR means staff. Indeed's employer guide gives it as employees retained, divided by employees at the start, x 100.
Worked example, with made-up figures: you start the year with 20 reps and end with 22, after hiring 5. (22 - 5) / 20 = 85%, so you kept 17 of your 20 and lost 3.
How to measure it in your team
- Decide what counts as a client. For a one-off purchase, it's someone who bought again within a set time, such as 12 months. For a contract, it's someone still paying on the last day.
- Keep the period fixed. Keeping 98% a month is about 78% a year (0.98^12), so a monthly rate and a yearly rate aren't comparable.
- Split it by rep, because your team's 90% can hide one book of clients at 70%.
- Write down why each lost client left. After a quarter, one line per client tells you which reason to fix first.
What a good retention rate looks like
No single percentage fits every team. Gainsight's guide says benchmarks vary widely by industry, because contract structures, switching costs and buyer behaviour differ. So set your bar from your own last four quarters.
| Who's looking | What they check | What good looks like |
|---|---|---|
| Sales manager | Yearly retention and net revenue retention | Both steady or rising, with the reasons for losses written down |
| Account owner | Renewals decided before the due date | No renewal reaches its date without a conversation |
| Rep who keeps clients | Clients not spoken to in 90 days | That list gets shorter each month |
Where clients slip away
Check these first:
- The first 90 days, when a new client decides whether they made the right call.
- A long gap with no contact, so the first thing they hear from you is a renewal or a price rise.
- A price rise with no conversation before it.
- A change on their side, such as a new decision maker or a smaller budget, that nobody asked about.
Then run one check each month. List every client nobody has spoken to in 90 days, and give each one to a rep with a date to call.
Work out your retention rate
Put in your own counts. The boxes start with the worked example's numbers.
Retention: 90%
- Churn: 10%
- Upsell rate: 12%
Where it shows up in your week
Palby Sales Tracker doesn't work out retention. That number lives in your sales records. It counts the calls behind it: rename a starting tile to "Client call", and each one is a tap on the rep's phone. The board shows each rep's count of that tile for this week, last week or any dates.
Keep reading
Common questions
Yes. It's the same formula. Service businesses tend to say clients and product businesses say customers.
You kept 8 of every 10 clients you started with, and lost 2. Check the period before you judge it: 80% a year is a very different business from 80% a month.
One that beats your own last four quarters. Contract length, price and market change the figure, so another firm's percentage says little about yours.
Take starting monthly revenue, subtract what lost clients took and what others cut, add upsells, and divide by starting revenue. From S$50,000, losing S$5,000 and adding S$6,000 gives 102%.
The share of staff at the start of a period who are still there at the end. It's the same sum with reps in place of clients.
Retention asks how many of your starting clients are still there. Leave the new ones in and a busy sales quarter hides the clients you lost.
They're two sides of one count. With 90% retention, churn is 10%.
Sources
- Gainsight, How to calculate customer retention rate (formula and net revenue retention), read 2 November 2026
- Indeed, Calculating retention rate, read 2 November 2026