Retention and Churn

This post was written 10 months ago… yep, right after Retention 101. Since then it has been in an out of the publishing queue. I’ve been picking up things to improve it but it doesn’t make sense to keep it out… and it took too long really! I wanted to improve it beyond this but it’s better to simply publish it and follow up if I make up my mind about what is that magical improvement than to leave it lingering in the Drafts section any longer.

This post is about ways of measuring retention, how each of them relates with true churn and which should be used.

Retention 101 post was an overall intro. I gave the formula generally used to calculate retention and mentioned there are other ways of calculating it. This post is about those additional formulas, namely rolling retention and rolling window retention and also about churn.

Each retention formula has strengths and weaknesses. Some are more adequate for reporting, other’s for modelling and each has a different relationship with churn. Let’s start! Continue reading