📐 Key Retention Formulas
Retention Rate
R = Customers(end) / Customers(start)
Percentage of customers retained period-over-period
Churn Rate
C = 1 - R
Percentage of customers lost each period
Average Lifespan
L = 1 / C
Expected customer lifetime in periods
Half-Life
t(1/2) = ln(0.5) / ln(R)
Time for 50% of cohort to churn
📦 What You Get
5% retention improvement = 25-95% profit increase
Bain & Company research