Renewal Retention tracks how customers retain when they are going through a renewal cycle.

‍

Formula
‍

‍

Renewals are when customers have contracts (typically 1 year, sometimes multi-year) ending, and they need to be sold a new contract. For SaaS companies that sell annual deals, renewals are when they are most vulnerable to churn, since many SaaS contracts don’t allow customers to churn, or even contract, during their contract. Renewals are also opportunities to upsell customers new products or raise prices, so the risk of churn and contraction is offset by contraction potential.