Measure what happens after acquisition: who stays, who leaves, how often customers buy and whether lifetime value supports the acquisition cost.
Acquisition economics are incomplete without retention. A customer with a strong first order but no repeat behavior can be less valuable than a modest first order followed by several profitable purchases.
This category separates observed retention behavior from assumptions. Use mature cohorts, a consistent activity definition and the same time period when comparing channels or customer segments.
Each tool answers a different part of the same operating question.
Two cohorts each contain 1,000 new customers. Cohort A retains 80% through the chosen period; Cohort B retains 60%. If retained customers also purchase more frequently, the difference in customer value can be much larger than the first-order revenue suggests.
Illustrative only. Replace every input with your own business data before making a decision.
Start with what customers actually did, then connect it to acquisition.
Choose a retention or lapse rule.
Track the same cohort over a comparable window.
Calculate order frequency and AOV.
Use LTV:CAC only after the value inputs are defensible.
Early repeat behavior may not represent full-year value.
Retention needs the same rule across periods.
Lifetime revenue is not lifetime contribution.