← Glossary Business

Retention

The opposite of churn: how many customers (or how much revenue) you keep over time.

Explained simply.

Retention is the percentage of customers (or revenue) still with you at the end of a period. It's usually shown as a cohort curve: of customers who signed up in January, how many are still paying in February, March, April, etc. The shape of that curve tells you everything about your business's long-term health.

An example.

Of 100 people who signed up in January, 80 are still paying in February (80% retention). By month 12, 40 are still paying (40% retention). If that 40% is stable (not dropping), you have a real business. If it keeps dropping, you have a leaky bucket.

Why it matters.

Retention is the single biggest lever on business valuation. Improving retention from 90% monthly to 95% monthly isn't 5% better, it's dramatically better, because it compounds over time. Investors value retention over growth for mature businesses.