Cohort Retention Rate

‍What is cohort retention rate?

Cohort Retention Rate measures the percentage of subscribers from a specific group (or “cohort”) who remain active after a set period of time. A cohort is typically defined by a shared characteristic, such as month of sign-up, acquisition channel, pricing tier, or campaign source.

Within Subsets, cohorts are automatically built from integrated billing, engagement, and subscription data. This makes it easy to see how long different subscriber groups stay engaged, renew, or upgrade, without the manual effort of pulling separate reports from multiple systems.

Why cohort retention rate matters

• Pattern recognition: Reveals differences in retention between groups based on acquisition source, plan type, or sign-up period.
• Targeted optimization: Helps refine onboarding, engagement, and pricing strategies based on the needs of specific cohorts.
• Product-market fit insights: Strong cohort retention indicates that the offering meets customer expectations and delivers sustained value.
• Benchmarking success: Enables performance comparisons over time to measure the impact of changes in marketing, product, or service delivery.
  

How to Calculate Cohort Retention Rate

The general formula is:

Cohort Retention Rate (%) = (Number of active subscribers in cohort at time period ÷ Number of subscribers in cohort at start) × 100

Example:

If 1,000 subscribers joined in January and 720 are still active after three months:

Cohort Retention Rate (Month 3) = (720 ÷ 1,000) × 100 = 72%

In Subsets, this calculation is automated, and results can be filtered by acquisition source, pricing tier, or engagement profile for deeper analysis.

Inclusions and exclusions

• Include: All subscribers within the defined cohort who are still active according to your retention criteria in Subsets (e.g., paying, logged in, engaged in the last 30 days).
• Exclude:
  
  • Subscribers outside the defined cohort.
  • Those who churned and did not return within the same reporting period (unless measuring winback rates separately).
    

Related metrics 

Key considerations

• Time intervals: Cohort retention can be tracked daily, weekly, or monthly, depending on the business model.
• Engagement definition: Clearly define what “active” means, logins, transactions, subscription renewal, to ensure consistency.
• Comparative analysis: Tracking multiple cohorts side by side helps identify external factors (seasonality, marketing campaigns, product updates) that affect retention.

Cohort retention rate in subscription businesses 

In subscription models, cohort retention rate provides a granular view of subscriber loyalty and churn risk. For example, if cohorts from paid acquisition channels churn faster than those from organic referrals, marketing teams can adjust budgets accordingly. Similarly, content publishers might discover that subscribers who joined during major coverage events retain at a higher rate, prompting strategies to replicate those conditions. By breaking retention down into cohorts, subscription businesses gain the clarity to act on precise drivers of retention rather than relying solely on broad averages.

By embedding cohort retention-related insights directly into its segmentation, experimentation, and automation flows, Subsets turns what is traditionally a static metric into a live driver of retention growth. Book a demo to learn how you can increase the cohort retention rate for your company.

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