Cohort retention
Cohort retention tracks what share of the customers acquired in one period are still active, paying, or buying in each later period. It shows how customer quality changes over time and by acquisition source, which a company-wide average hides.
A company-wide retention figure mixes customers acquired years ago with customers acquired last week. When acquisition grows fast, the mix shifts toward new customers and the average moves even if nothing about customer behavior changed. A cohort fixes the group: everyone who started in March, followed month by month.
A worked example, as arithmetic. Of 1,000 subscribers who started in March, 700 are still paying in month two, 540 in month four, and 400 in month ten. Laid beside the April and May cohorts, the curves show whether the product is keeping people better or worse over time, and split by acquisition channel, they show which channels bring customers who stay.
For paid media, cohort retention is what turns a cost per customer into a decision. A cheaper channel whose cohorts decay fast can be worth less than an expensive one whose cohorts hold. Read cohorts in the billing system or the store, which record what customers actually paid, and give new cohorts time to mature before judging them.
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