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Retention

Retention curve

The share of a cohort still active plotted against months since they started. Whether it flattens is the single most important thing about it.

A retention curve plots how much of a cohort remains over time. Every curve falls; the question is whether it flattens.

A curve that flattens has found a group of customers for whom the product is durable, and the height at which it flattens is roughly the share of buyers who were a genuine fit. A curve that keeps declining at a constant rate has no such group, and LTV computed from it is not a real number, because the integral does not converge in any useful way.

Read the curve on revenue as well as logos. A revenue curve that rises above 100% while the logo curve falls is the shape of a business with strong expansion and weak fit at the small end.

Related terms

  • Cohort analysis Grouping customers by when they started and tracking each group over time, so retention and expansion can be read without new customers hiding them.
  • Customer churn The share of customers who cancelled in a period, counted as logos rather than as revenue.
  • LTV (Customer Lifetime Value) The total gross profit expected from a customer across their whole relationship with you.