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Two-stage Retention Curve Calculator

Model a retention curve with different churn rates for early months vs steady-state, and estimate expected value over time.

Many products have high early churn (activation/onboarding) and lower steady-state churn later. A two-stage model can match reality better than constant churn.

This calculator builds a simple retention curve with separate early and steady-state churn rates and estimates expected revenue and gross profit per original customer.

Prefer an explanation- Read the guide.

Two-stage churn: modeling early drop-off vs steady-state retention Cohort payback curves: how to model payback with early churn Retention & churn hub: cohorts, GRR/NRR, and retention curves PLG metrics hub: activation, trial conversion, stickiness, and adoption

Early monthly churn

Early phase months

Steady-state monthly churn

ARPA (monthly)

Gross margin

Months to model

Tip: you can type commas (e.g., 10,000).

Example

Using the default inputs, the result is:

75.9%

Early monthly churn: 6%
Early phase months: 3
Steady-state monthly churn: 1%
ARPA (monthly): $800
Gross margin: 80%
Months to model: 36

How to calculate

Set an early churn rate and how many months it applies (e.g., months 1-3).
Set a steady-state churn rate for later months.
Enter ARPA and gross margin to convert retention into expected value.

Formula

Retention(m) = (1 - churn_early)^(min(m, earlyMonths)) x (1 - churn_steady)^(max(0, m - earlyMonths))

Logo churn is modeled in two phases (early vs steady-state).
ARPA and gross margin are constant over the horizon.
Outputs are per original customer/account (expected value).

FAQ

When should I use two-stage churn-

When you observe a clear activation/onboarding drop early and much lower churn later. Two-stage models let you stress-test the impact of improving early retention vs improving steady-state retention.

Does this replace cohort analysis-

No. It's a planning shortcut. Real cohort curves (by segment) are the gold standard for understanding retention dynamics and forecasting LTV.

Common mistakes

Using churn rates from blended segments (plan/channel).
Treating this as a substitute for real cohort curves; use it for planning and sensitivity.
Ignoring expansion (revenue retention) when it's a major driver of value.