The percentage of clients an agency keeps over a specific period, typically measured annually.
The percentage of clients an agency keeps over a specific period, typically measured annually.
Client retention rate measures the percentage of clients who continue working with an agency over a defined period. It's calculated by dividing the number of clients at the end of a period (minus new clients acquired) by the number of clients at the start, then multiplying by 100.
For marketing agencies, retention rate is a critical metric that directly impacts revenue stability and growth. Industry benchmarks suggest healthy agencies maintain 80-90% annual retention rates. Improving retention by just 5% can increase profits by 25-95%.
If an agency starts the year with 50 clients, acquires 15 new clients, and ends with 55 clients, the retention rate is: ((55-15)/50) × 100 = 80%
Angelwood's client health scoring helps identify at-risk clients before they churn, directly improving your retention rate.
Explore related concepts
The percentage of clients who stop working with an agency during a specific period.
The percentage of recurring revenue retained from existing clients, including expansions, contractions, and churn.
The total revenue an agency can expect from a client relationship over its entire duration.