Definition
A retention cohort groups customers by a shared start point (for example signup month) and tracks how many remain active or paying over time.
How to use it
- Use retention cohorts to see where churn happens (early vs late).
- Segment cohorts by channel and plan to find quality differences.
- Track retention by activation milestone to separate onboarding issues from long-term fit.
- Use the same definition of active (login, usage, payment) across cohorts.
Common mistakes
- Mixing cohorts defined by different start events (signup vs first value).
- Using blended averages that hide weak cohorts.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Retention Cohort" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Sanity-check with a related calculator from the same category on MetricKit.
- Read the related guide (e.g., Cohort analysis playbook: retention curves, LTV forecasting, and payback) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Net New ARR Calculator: Calculate net new ARR from new, expansion, contraction, and churned ARR movements.
- ARR Waterfall Calculator: Build an ARR waterfall: starting ARR + new + expansion - contraction - churn = ending ARR.
- Burn Multiple Calculator: Calculate burn multiple: net burn / net new ARR (a growth efficiency metric).
- Unit Economics Calculator: Model CAC, payback, LTV, and LTV:CAC together from ARPA, gross margin, and churn.
- Bookings vs ARR Calculator: Compare bookings vs ARR (and cash) for a contract with term length and one-time fees.
Guides
- Cohort analysis playbook: retention curves, LTV forecasting, and payback: A practical cohort analysis workflow: build retention curves, forecast LTV, and translate retention quality into payback and growth decisions.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.