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Metrics & Analytics

Churn & Retention

Turn 'we lost some users' into a churn rate, a retention rate, and an expected lifetime.

Your numbers

users
users

Results

Monthly churn rate
4%
Share of the starting cohort you lost this month
Monthly retention rate
96%
Share of the starting cohort still with you
Annualized retention
61.3%
How much of a cohort survives 12 months of this churn compounding
Expected customer lifetime
25 mo
1 ÷ monthly churn — how long the average customer stays at this rate (shows — at zero churn)

How it works

Monthly churn = users lost ÷ users at start of month. Retention = 1 − churn.

Churn is the tax on everything else you do: it caps LTV, stretches payback, and quietly compounds. A 4% monthly churn sounds harmless until you annualize it — retention^12 — and realize you keep barely 60% of a cohort after a year.

The classic mistake is hiding churn behind growth: counting new signups in the denominator so the rate looks lower. Measure churn on the cohort that existed at the start of the period, and count only losses from that cohort.

Worked example

You start the month with 1,000 users and 40 of them cancel. Monthly churn = 40 ÷ 1,000 = 4%; retention = 96%. Compounded over a year, 0.96^12 ≈ 61% of the cohort remains — 4% a month quietly cost you nearly 4 in 10 customers. Expected lifetime = 1 ÷ 0.04 = 25 months.