Your churn rate is lying to you. Look at the curve instead.
In short
Two companies can both report 5% monthly churn. One compounds forever and the other bleeds to zero. Same number, opposite outcome. The difference is the shape of the retention curve, and you can only see it when you look at cohorts.
Key points
- A single churn percentage hides whether retention flattens out or keeps falling.
- Plot retention by signup cohort to see the shape.
- Part 1 of 2. Part 2 covers the four curve shapes.
