Retention Rate vs Churn Rate: What's the Difference?

Churn rate is the percentage of customers who stop using a product over a given period, calculated as customers lost divided by total customers at the start of that period.

Retention rate is the percentage of existing customers who continue using the product over that same period, calculated as customers remaining divided by total customers at the start - and mathematically, it's simply churn rate subtracted from 100%.

Because the two are opposite views of the same underlying number, tracking one always implicitly tells you the other - a 30% churn rate is, by definition, a 70% retention rate for the same period. The reason both terms still get used, rather than just one, is framing: churn rate draws attention to the customers being lost and the reasons behind specific departures, which suits a team focused on diagnosing and fixing what's driving people away. Retention rate draws attention to the base that's staying, which suits a team focused on measuring the health and stickiness of the existing customer relationship rather than the failure points. Neither framing is more correct than the other, but most growth and revenue reporting tracks both together, since a single number reported without its counterpart can make a business look worse or better than it actually is depending on which side of the story gets told.