The calculation of the retention rate is with the number of users that retain over a given period of time. Therefore, it is important to know how many users were present that day.

There are two main factors for the calculation: 

User Action –

The user action required to calculate the rate using the app, purchasing a plan, or visiting the website.

In simple terms, it is a basic action that takes place for the user that determines whether or not the user has been retain and the organization can decide based on their goals. 

Time Period – 

We can calculate this over time. Many industries use a 30-day timeframe to calculate retention rates, but we can achieve a larger picture by using semi-annual or annual rates.

To show its calculation, let’s take an example. Suppose we want to calculate the retention rate for a mobile game over a 30-day period. This is what the retention rate will look like.


Retention rate formula

Retention Rate = (number of users who played the game in 30 days / total number of active users at the beginning of the 30-day period) * 100 So if the game has 1000 players at the beginning of the 30-day period and 400 people have played the game during the period, the retention rate is : Retention rate = (400/1000)*100 = 40%.

retention rate formula

New users must also be subtracted and Joined during the Calculation Period

Therefore, the formula for the retention rate can also be: retention rate = (number of users who performed the user action during the  period – new users added during the  period / total number of user assets at the beginning of the calculation period) . Period) * 100.

So if an app has 1000 active users at the beginning of the  period and 400 users have performed the user action in the period and 150 new users join and perform the user action, the retention rate is: retention rate = (400-150/1000)*100 = 25%

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