💼 Retention

Retention#

The share of users who remain active over a given period.

Important

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What it is#

Retention measures how well a business keeps its customers or users over time — the complement of churn, and a direct signal of product value: if people keep coming back, the product is working.

The metrics#

The customer retention rate (CRR) strips out new sign-ups to measure how many existing customers stayed:

\[\text{CRR} = \frac{E - N}{S} \times 100,\]

with \(S\) customers at the start, \(E\) at the end, and \(N\) newly acquired. Cohort retention tracks a starting group over time (100 sign up in week 1, 40 still active in week 4 → 40% week-4 retention), and revenue retention comes in two forms: gross (GRR), which ignores expansion, and net (NRR), which adds upsells and cross-sells.

Example#

Start with 100 paying customers, lose 10 and gain 20: the CRR counts only the kept ones, \((110 - 20)/100 = 90\%\). A mobile app with 300 of 1,000 installs still active at 30 days has 30% retention.

Why it matters#

Retention is cheaper than acquisition, drives predictable recurring revenue, and is the clearest indicator of product value — which is why it sits at the heart of lifetime value and growth. Teams raise it with onboarding, A/B tests and recommendations, and predict who is about to drop with the same models used for churn.

Theme: Business & Growth Analytics · All terminology

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Mind map — connected ideas

Churn · Revenue per User (RPU / ARPU) · Customer Lifetime · Cohort-Based LTV (Simple Version) · SaaS (Software as a Service) · Upselling

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More in Business & Growth Analytics

Blended CAC (Customer Acquisition Cost) · CAC (Customer Acquisition Cost) · Cannibalization · Channel-Specific CAC (Customer Acquisition Cost) · Churn · Cohort · Cohort-Based LTV (Simple Version) · Conversion Rate (CR) · Cost-Per-Click (CPC) Models · Cross-Selling · CTR (Click-Through Rate) · Customer Lifetime · Customer Segmentation · D2C (Direct-to-Consumer)