Cohort

The customers who first signed in the same period, usually a quarter. Fixed at signing: a customer never moves cohort. Retention per cohort reconciles to the ARR bridge because every movement belongs to exactly one cohort.

DefinitionThe customers who first signed in the same period, usually a quarter. Fixed at signing: a customer never moves cohort. Retention per cohort reconciles to the ARR bridge because every movement belongs to exactly one cohort.

Why fixed

A customer moved to a new cohort on upsell breaks the reconciliation and flatters the old cohort.

What it shows

A company retention figure of 101 percent can hold a cohort at 126 and one at 82. The 82 is the finding.

How it is used

Customers are assigned once, by the period of their first contract or purchase, and never move. Retention, expansion and product depth are then read per cohort over time.

Example

The 2022 cohort retains at 120 percent of its starting revenue, 2023 at 104 and 2024 at 89. The blended figure of 103 percent hides that the newest customers are shrinking.

Where it goes wrong

Cohorts redefined each year, or customers moved when they are re-contracted. The comparison over time stops being about the same customers.

Articles that use this term

Wallet share and penetration · Education

Adoption by purchase cohort: what institutions that bought three years ago hold now

How an education provider reads its base by first-purchase cohort, from the order history: the institutions that first bought in each year, how many are still customers, what programmes they hold now against what the cohort held at first purchase, the cohorts that expanded and the cohort that stalled, and why a cohort view finds the year something changed in onboarding or product that the renewal rate never explains.

16 Sept 20262 min read Board and management reporting

Concentration by industry: where a large top-ten share is normal, and where it is risk

Concentration is measured the same way everywhere, top-n share, count to half, the index, and what a high figure means depends on the desk: normal in a category with a few large buyers, a dependency in one with many. This hub gives, for twelve industries, what is concentrated, on which axis, what a typical top-ten share looks like, when it is a strength and when it is a risk, and the guide for each.

16 Sept 20263 min read Board and management reporting

Gross retention and net retention: the two tables that belong on one page

Why gross revenue retention and net revenue retention are computed on the same customers and answer different questions, gross capped at 100 percent as the leak, net with expansion as the growth from the base, the four combinations a cohort can show, leaking and growing, leaking and flat, tight and growing, tight and flat, what each means for where the next dollar comes from, the identity that ties both to the bridge, and why reporting either alone misleads.

16 Sept 20262 min read Board and management reporting

How to read a cohort retention table: the diagonal, the column, and the cohort that broke the pattern

A reading guide for a cohort retention table, rows by signing period and columns by months since signing: why the columns are read before the rows, the diagonal as the most recent data and the least settled, the cohort whose row falls faster than its neighbours, the too-young cohorts to leave alone, the difference between the gross and net versions of the same table, and the row to open, the one that broke the pattern in a column where its neighbours held.

16 Sept 20262 min read Data quality and reconciliation

Identifier drift: when a system re-keys an account and the history breaks

What happens to every measure when a CRM migration, a merge or a re-numbering changes an account's identifier: the account appears new, its history appears lost, dormancy fires, concentration drops, and share of wallet resets. The dated identifier map that prevents it, the three ways drift is detected on upload, the rule that old identifiers are never reused, and the worked recovery after a migration that re-keyed a third of the base.

16 Sept 20263 min read Board and management reporting · SaaS

Net revenue retention by cohort, reconciled to ARR

How a SaaS finance or revenue team computes net revenue retention per signing cohort from the subscription ledger, the four movements that make it up, expansion, contraction, churn and reactivation, the identity that ties every cohort's movements back to the ARR bridge, and why a single company NRR figure hides the cohort that is quietly failing.

16 Sept 20262 min read