Set plan-specific retention targets by equating discounted lifetime value to acquisition cost. Understand how margin, churn, and discount rate shift the break‑even point.
Break‑even retention for a plan is reached when discounted LTV ______ CAC.
is unrelated to
exceeds by 50%
is lower than
equals
All else equal, a plan with higher gross margin requires ______ retention to break even.
lower
undefined
the same
higher
If the monthly discount rate rises, the retention needed to break even generally ______.
becomes irrelevant
decreases
stays identical
increases
Which plan type typically lowers the retention needed to reach break‑even, all else equal?
Annual prepaid plans with lower churn
Short‑term pay‑as‑you‑go only
Monthly plans with higher churn
Free trials without commitment
In a simple subscription model, discounted LTV can be approximated as ARPU × margin ÷ (monthly churn + monthly discount rate). What happens if churn goes up?
LTV falls, so break‑even retention rises
LTV unchanged
Discount rate becomes zero
LTV rises, so break‑even retention falls
When CAC and margins differ by plan tier, retention goals for break‑even should be set ______.
from a single blended target
per tier, not from a single site‑wide average
only at the channel level
only annually
Expansion revenue (e.g., add‑ons or seat growth) generally makes break‑even retention targets ______.
harder to hit because LTV decreases
easier to hit because LTV increases
unrelated to retention
invalid to compute
If gross margin declines due to higher variable costs, break‑even retention required will ______.
increase
stay the same
turn negative
decrease
For break‑even analysis on base subscriptions (excluding upsell), which retention measure is most appropriate?
Gross revenue retention (GRR)
Daily active users
ARPU growth rate
Net revenue retention (NRR)
A 12‑month payback policy means you expect the cumulative discounted contribution to meet CAC by month 12. If churn rises, that crossover month will likely ______.
be unchanged
shift later
be undefined
arrive earlier
Starter
Good start—review the core definitions and formulas, then retake the quiz.
Solid
Nice work—tighten your grasp of edge cases and benchmarking nuance.
Expert!
Outstanding—your CLV and cohort analysis instincts are on point.
