Customer cohort retention value.

Cohort analysis tracks how a specific group of customers (usually signup month) behaves over time. Month 1 retention, month 3, month 6, month 12 show the retention curve. Strong products show mild decay (month 12 at 60-80% of month 1); weak products show steep decay (month 12 at 10-20%). Revenue cohorts add MRR to this to reveal cohort lifetime value.

1,000 customer cohort: 95% M1 (950), 80% M3 (800), 65% M6 (650), 50% M12 (500). 80 avg MRR per retained × 12 months × avg retention ≈ 672,000 cohort year-1 revenue. The decay pattern reveals product stickiness: if M6 is 65% but M12 is 50%, year 2 may land around 35% - project forward to see full cohort value.

Cohort analysis matters because aggregate metrics lie. A business reporting 'overall retention 70%' might have month-1 cohorts retaining 90% but stale cohorts retaining 40%. Breaking apart by cohort reveals whether product is improving (newer cohorts retaining better) or declining (newer cohorts retaining worse) - the leading indicator aggregate metrics completely miss.

A worked example

Try the defaults: cohort size of 1,000, month 1 retained of 95%, month 3 retained of 80%, month 6 retained of 65%. The tool returns 696,000.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Cohort Size, Month 1 Retained %, Month 3 Retained %, Month 6 Retained %, and Month 12 Retained %. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

The formula behind this

Retention at each milestone = cohort size × retention %. Avg retained = (M1 + M3 + M6 + M12) ÷ 4. 12-month revenue = avg retained × MRR × 12. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Using this as a check-in

Re-run this every three months. A single reading tells you where you stand; four readings tell you whether things are improving. The trend matters more than any individual snapshot.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.