Question

Topic: Research/Metrics

Negative Retention Rate!!

Posted by r.helwe on 8/19/2016 at 10:12 AM ET 25 Points
Hello,

So i have these Numbers which i'm using to calculate a mobile app retention rate, yet i'm getting a negative rate when i use them for a 3 months period:

12 August Installs: 708
12 May Installs: 535
new acquired customers during this period: 1768

Based on the retention formula, i'm gettin a -198%

If i take each month separately, i get reasonable numbers such as 17% 2% and 25%

I'm really confused.
any advice on this would be highly appreciated
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RESPONSES

  • Posted by Jay Hamilton-Roth on 8/19/2016 at 11:03 AM Member
    Retention Rate = ((CE-CN)/CS)) X 100

    CE = number of customers at end of period
    CN = number of new customers acquired during period
    CS = number of customers at start of period
    What are your specific values for CE, CN, and CS?
  • Posted by mgoodman on 8/19/2016 at 11:18 AM Accepted
    The only way you can have a negative retention rate is to lose lots of new customers (acquired during the period). Let's say you started with 5 customers and have 100 customers at the end of the period, but you acquired 150 customers during the period. That would suggest that you LOST 55 customers during the period. And since you only had 5 at the beginning, at least 50 of the lost customers must have been acquired during the period.
  • Posted by r.helwe on 8/22/2016 at 5:06 AM Author
    CE = 708
    CN = 1768
    CS = 535

    Actually i lost more than i have customers in the first place, yet i read that Retention Rate couldn't ever be a negative number.
  • Posted by r.helwe on 8/24/2016 at 9:05 AM Author
    Any answer on my retention rate? i got 198%
    is this number acceptable?
  • Posted by r.helwe on 8/24/2016 at 9:07 AM Author
    - 198%*
  • Posted by mgoodman on 8/24/2016 at 12:13 PM Accepted
    Wherever you "read that Retention Rate couldn't ever be a negative number" was obviously wrong. You lost a bunch of the new installs before the period ended. They installed and uninstalled during the period.

    As for whether the number is acceptable or not, that's for you to decide. Can you learn WHY these folks uninstalled? If it's something you can fix easily, maybe it's a cheap [and fast] education. If not, then you probably want to pause and reevaluate your business premise and plan.
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