Cohort Revenue Retention
Cohort revenue retention follows recurring revenue from a fixed group of customers over time.
Cohort revenue retention compares a customer cohort’s recurring revenue at each age with its original recurring revenue. It includes expansion and contraction within that group, so it can exceed 100% even while some customers leave.
Example
Customers acquired in March initially generate $8,000 MRR. Six months later they generate $8,800 despite losing five accounts. Revenue retention is 110%. The customer-count retention figure may be below 100%, describing a different outcome.
How to use it
Use the table to see whether customers become more valuable after adoption or gradually spend less. In the example, investigate whether the $800 gain comes from broad seat growth or one large upgrade. Pair dollar retention with account retention to expose concentration.
Do not add later acquisitions into the original cohort. Treat upgrades, discounts, cancellations, and reactivations consistently. Comparing a six-month-old cohort with a twelve-month-old cohort confuses customer age with performance; align the columns before deciding which group is healthier.
Further reading: ChartMogul on Cohort Revenue Retention.
Related: Net revenue retention, Cohort retention.