Article · 15 min read

Customer Retention Metrics: Which Ones Actually Matter for Your Model

Carlos Gonzalez de Villaumbrosia · Product School Free Beginner

This is the cleanest side by side of the two retention worlds: it names which metrics belong to a subscription/SaaS product (churn, net revenue retention, CLV, active users) versus a transactional or ecommerce one (repeat purchase rate, time between purchases). The point it drives home is that the right metric depends entirely on your model, so a transactional founder tracking monthly churn is measuring the wrong thing. Good starting map before you pick what to instrument.

  • SaaS retention is measured on recurring revenue (churn, net revenue retention, CLV); transactional retention is measured on repeat behaviour (repeat purchase rate, time between purchases).
  • There is no single retention number: your business model, usage frequency, and customer journey stage decide which metric is honest for you.
  • Universal metrics like cohort retention and CLV apply to both, but the levers you pull to move them are different in each model.
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The question it answers

  1. How is retention different for a subscription SaaS versus a one-time-purchase or transactional product?

Read with it

  1. Reforge is where the modern retention playbook is written down, and this program treats retention as the power plant of growth... Reforge Book · Multi-week program Retention + Engagement (Reforge program) Brian Balfour and Reforge
  2. For a transactional or one time purchase product, retention lives in lifecycle nudges: onboarding, cart recovery, post purchase... Customer.io Tool · Product / platform Customer.io (lifecycle and behavioral messaging platform) Customer.io
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