courses › Growth & Marketing Math

Track groups of customers over time, by head count and by dollars.

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skills · practice stats

From rounds of this course only: box, review and trial answers are left out. Once a skill has 40 tries, it compares your first 20 tries with your last 20.

• Net revenue retention par 20 s not tried yet

  worked example

  A group of customers starts the year paying $550,000 a month. Over the year, upgrades add $212,500 of monthly revenue, downgrades remove $63,000, and cancellations remove $83,500. New customers are not counted. What is net revenue retention, as a percent?

  Answer: 112%

  1. ($550,000 + $212,500 − $63,000 − $83,500) ÷ $550,000 = $616,000 ÷ $550,000 = 112%.

• Gross revenue retention par 24 s not tried yet

  worked example

  A group of customers starts the year paying $1,000,000 a month. Over the year, upgrades add $179,500 of monthly revenue, downgrades remove $73,500, and cancellations remove $30,500. New customers are not counted. What is gross revenue retention (upgrades not counted), as a percent?

  Answer: 89.6%

  1. ($1,000,000 − $73,500 − $30,500) ÷ $1,000,000 = $896,000 ÷ $1,000,000 = 89.6%.
  2. It can never be above 100%.

• Expected contribution over a few months par 25 s not tried yet

  worked example

  A new customer contributes $780 in each month they are active. They are active in month 1. Assume that each month after that they stay with probability 80%, and once gone they don't come back. What is the expected total contribution over the first 2 months?

  Answer: $1,404.00

  1. Chance still active by month: 100%, 80%.
  2. Expected: $780 + $624 = $1,404.
  3. This is contribution, not revenue, and it isn't discounted.

• Read a cohort par 19 s not tried yet

  worked example

  The August cohort started with 60 customers, and 51 were active in month 2. The September cohort started with 40, and 15 were active in month 4. What share of the August cohort was still active in month 2, as a percent?

  Answer: 85%

  1. Use the cohort's own starting size: 51 ÷ 60 = 85%.

• Heads versus dollars par 22 s not tried yet

  worked example

  Total monthly revenue is up 20% on a year ago, yet 26% of the customers you started the year with have cancelled, and those who stayed pay the same as before. What best explains this?

  1. Prices must have been cut
  2. New customers hid the losses from the starting group
  3. The two numbers must be a reporting error
  4. Churn was calculated using the ending customer count

  Answer: New customers hid the losses from the starting group

  1. Customer retention counts heads; revenue retention weighs each customer by what they pay, including upgrades and downgrades.
  2. The starting group shrank by 26% with no upgrades, so all of the 20% growth came from new customers.

rest ladder

Win 3 of your last 4 rounds and the course rests. A win is 90% right, within 2× the round's par. Pass the review when it comes back and the next rest is longer.

1. 1 day
2. 3 days
3. 7 days
4. 14 days
5. 30 days
6. 60 days
7. mastered · every 90 days

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