Vareto Finance Glossary

Renewal Rate


The renewal rate is also known as the customer renewal rate. It highlights the rate at which a business can further extend customer relationships. This is largely applicable to subscription or membership business structures. Expressed as a percentage, the renewal rate indicates a company’s growth prospects and its ability to derive long-term value for its clients.


It is calculated as the number of customers up for renewal in a given period divided by the number of customers who renew their contract. Suppose, in January 2022 Vareto had 7 clients up for renewal, 6 of them renewed their contracts. Thus, Renewal Rate = 6 / 7 = 86%.

Why it matters

The renewal rate helps companies to understand whether their existing customers are satisfied with the product or service and are willing to continue paying for it.

See Vareto in action

Give your finance team the tools needed to launch your company into the future.