Retention Benefit Calculator
What is your lack of focus on improving retention costing you in acquisition spend?
When you improve your first-month retention, you need fewer new users each month to hold the same baseline MAU, which in turn will contain more valuable retained users.
How to use
Add your inputs to the side bar, using your real calculated first-month, and post-first-month retention rates. Enter a target rate that we might hit using the principles from The User Engagement Blueprint as well as your CPA, to see what improving retention means for your app. Please see a walkthrough of the calculator in part 1: the MAU ceiling and monthly cohorts and part 2: acquisition spend options.
Calculator
1The ceiling
Each month new users join and some previously active users churn, mathematically this means that MAU approaches a theoretical maximum ceiling over an infinite timespan.
At 10,000 new users a month and 6% first-month retention, the ceiling is at 13,000 users in total.
However MAU plateaus after 14 months, as its monthly rise becomes less than variations from one month to the next.
Still, to negate the timing from the comparison we use the ceiling to compare the efficiency of the current and target retention rates.
At 10% first-month retention, that ceiling becomes 15,000.
At 6% first-month retention, 23% of the ceiling MAU is made up of retained users, at 10% the ceiling MAU is made up of 33% retained users.
This means that over time your MAU will contain more longer-term, loyal, engaged and monetisable users.
Current vs target first-month retention rate
| Current retention rate | Target retention rate | |
|---|---|---|
| First-month retention | 6% | 10% |
| Ceiling | 13,000 | 15,000 |
| Likely range | 12,670 to 13,338 | 14,695 to 15,311 |
| Percent of retained users in MAU at ceiling | 23% | 33% |
| MAU plateaus after | 14 months | 16 months |
Active users by monthly cohort, first 12 months
Each band is one month of joiners. The MAU growth flattens as it reaches ceiling, retained users bolster the MAU as it grows.
The cohort model is simplified so that there is only one post-first-month retention rate for every cohort, unchanged over time, and the same tail in both scenarios even though retention work likely improves it.
Those simplifications understate the benefits of retention rather than overstate them. Treat the numbers as a floor, not a forecast.
2Reduce acquisition spend
By increasing first-month retention rate to 10%, you can maintain the ceiling of 13,000 users on 8,667 new users a month instead of 10,000.
Recurring acquisition spend drops from €32,500 a month to €28,167, which is €4,333 a month or €52,000 a year saved, for the same MAU.
Monthly acquisition needed to maintain 13,000 user ceiling
€32,500 per month at 6% retention → €28,167 per month at 10% retention
Increasing retention rate allows you to reduce acquisition spend in order to maintain the current MAU ceiling.
3Maintain acquisition spend
If instead you were to reach the 15,000 ceiling set by the target retention rate, it would take 11,538 new users a month on the current retention rate.
The increase of 2,000 users thanks to the improved retention rate is equivalent to acquiring 1,538 users a month, that would normally cost an extra €5,000 a month or €60,000 a year.
Monthly acquisition needed to maintain 15,000 user ceiling
€37,500 per month at 6% → €32,500 per month at 10%
Maintaining the 15,000 user ceiling on today's retention rate sits at an equivalent of spending an additional €5,000 a month. With first-month retention at the target, you reach 15,000 MAU on the budget you already spend.