Calculating a retention rate from a user retention chart (for dummies)

I had an extremely hard time grokking how to read user retention rate charts, and kept wishing that I could find one for “dummies”. If you’re like me, you hate thinking you’re a dummy at anything, “just ignorant”, I say to myself! But here’s the article I wish I’d found. If you’re an expert in user retention charts, there’s nothing to see here, please move along!

This is assuming that you already have your percentages of users. If you don’t, you’ll need to calculate them.

User retention chart

Here’s an example user retention chart showing user retention rate across 12 weeks. In this case, I was checking user retention across a 30-day free trial to determine if it should stay at 30 days or be reduced. I also wanted to see retention over 3 months. Since I was interested in how quickly I needed to get SaaS customers to value, I tracked weekly retention.

Export to a spreadsheet and average each column

If you’re lucky, your user retention chart tool will have a handy-dandy export CSV function. If you’re not, like me, you’ll need to manually enter all of the numbers yourself. The green row just uses =AVERAGE(A1:A12), for example. I averaged the week n numbers for each column.

(For this example, there’s not enough data in Week 11, so I’ll delete that one from the chart you see below, so that the flattening is extremely apparent.)

Chart your retention rate

I‘m using Google Sheets, but please follow along even if you’re using Excel.

1. Select the cells from the cell above the week range all the way through Week 0-Week 12 column header cells. If you don’t select the week range or the cell above the week range, it won’t bring in Weeks 0–1, which will obviously throw off your retention curve.
2. Select the cells from AVERAGE through the Week 12 average (you may not have data in Week 12, which I don’t, so I excluded Weeks 11–12 from the chart below, for illustration purposes).
3. Select Insert > Chart
4. In the Chart editor > Setup tab, select Line chart as Chart type.
5. In the Series section, make sure you have the cells selected in the header row (starting from the cell above your week range).

Retention curve and getting the “flattened rate”

Now, this was the part that I found the most confusing. Everything I read kept talking about “when the retention line flattens out”. It wasn’t until I realized that I had to enter the entire chart, then average them that I finally got a retention chart like all of the experts were telling me I’d see.

In my example, there’s not an exact percentage that it flattens at, but they are all around 29–33%, so I estimated it at 30%.

Given this finding, I could easily see that there was a large drop-off in Week 1, so it was important to try to get users to that Aha! moment within those first few days.

I hope that this is helpful! Please let me know if I missed anything. Thanks for reading!