Measuring retention, churn, and lifetime value

Retention and churn reveal whether users continue to find value in a product or decide to leave. These metrics go beyond initial adoption, showing the staying power of the experience.

• Retention rate tracks the percentage of users who keep using a product over time. A high rate indicates strong satisfaction and product-market fit.
• Churn rate is the opposite, capturing the percentage who stop using the product. Even a small increase in churn can have major effects on growth.

To see the financial implications, product managers often look at customer lifetime value (LTV). LTV estimates how much revenue a customer generates over the full length of their relationship. When combined with acquisition costs, it helps answer whether bringing in new customers is sustainable.

Together, these measures highlight whether growth is durable. High acquisition numbers mean little if users quickly churn, while strong retention and LTV point to a product that delivers long-term value.^[1]