Cohort: Customer Retention
The Customer Retention cohort groups customers by when they started their first subscription and tracks what percentage still have an active subscription over time.
For SaaS businesses, it's one of the most powerful tools for understanding long-term health — revealing not just how many customers churn, but exactly when in the customer lifecycle that churn tends to occur.
If this is your first time working with cohorts, read our guide on how a Cohort Analysis works in ChartMogul.
This metric can help you identify points in the customer lifecycle that result in churn, as well as the average number of days, weeks, months, quarters or years a customer will remain with your business after they sign up.
What is a good customer retention rate?
To grow your SaaS business, a customer retention rate as close to 100% is ideal, meaning that all or nearly all of your customers continue to renew their subscriptions and you, therefore, retain all (or nearly all) of your subscription revenue. Losing customers at even a seemingly low rate, e.g., 5% per month, corresponds to an annual loss of almost half (46%) of the cohort. Learn more in our SaaS Retention Report.
Companies with retention rates higher than 85% grow 1.5–3× faster. Use Benchmarks to compare your retention rate to industry peers.
Chart Notes
- Customers who begin their first subscription in the same interval are grouped in the same cohort.
- There are five intervals available for analysis: day, week, month, quarter and year.
- ChartMogul classifies customers who have an active subscription or have reactivated a subscription (they previously canceled) as Active and customers who have canceled all their subscriptions as Cancelled. Learn more about customer and subscription statuses.
Calculation
ChartMogul reports customers as retained (in their cohort) as long as they remain Active. Customers negatively impact the cohort’s Customer Retention Rate and number of active customers when they become classified as Cancelled. Conversely, customers positively impact the cohort’s retention rate and number of active customers when they continue to have an active subscription or reactivate a previously canceled subscription.
Cohort Table
Cohort Value is the number of customers in the cohort.
The metric displayed in each table cell is either the percentage change of the cohort’s Customer Retention Rate (relative to the previous interval or the starting interval of the analysis) or the number of active customers (depending on whether you’ve selected Rate % or Customers from the Show drop-down).
Select any cell with a value that has changed from the previous interval to view the MRR movements for that interval.
Next Steps
- Learn more about our other cohort analyses.
- See the estimated revenue you’ll receive from a customer with Customer Lifetime Value.
- See the rate of customers your business is losing with Customer Churn Rate.