CLV & Cohort Analysis Interview Questions & AnswersAnalytics & Measurement Interview Questions & Answers

Calculating Retention Rate the Right Way

Avoid common pitfalls in retention math so your cohorts tell the truth. Master start-of-period denominators, excluding new customers, and the difference between gross and net measures.

Monthly retention rate is (customers at end − new customers acquired) divided by ______.

total website sessions

customers at start of the month

new customers acquired

customers at end of the month

To measure retention, you track how many starting customers remain. You exclude new acquisitions from the numerator to avoid inflating retention.

Gross retention tracks logos kept; net retention allows for ______ within the base.

cookie resets

expansion and contraction

ad impressions

trial signups only

Net retention includes upgrades and downgrades across retained customers, showing whether revenue grows or shrinks within the cohort.

Cohort retention should group users by common ______ such as signup month.

color theme

start event

browser type only

ad frequency

Cohorts align customers by a shared starting point so that period 1, 2, and 3 have comparable exposure times.

A retention curve that flattens after a few periods indicates a stable ______ of users.

creative sequence

loyal core

bot cluster

cookie pool

Flattening suggests churn slows and a durable base remains active. This tail often drives most lifetime value.

Logo retention counts whether the customer is still present, while revenue retention weights by ______.

pageviews

spend or ARR

IP addresses

email opens

Revenue retention reflects dollar-weighted durability, capturing the impact of upgrades and downgrades along with churn.

For trial-to-paid funnels, Day-30 retention should use the ______ as the cohort start for like-for-like comparisons.

cookie consent date

ad impression time

activation or first-value date

last error log

Starting at activation aligns measurement to when users begin receiving value, reducing bias from pre-activation drop-off.

Rolling retention on Day N means the user was active on day N ______.

with at least five sessions

or any day after

and no day after

and also on day 1

Rolling retention credits continued activity at or beyond the target day. Classic N-day retention requires activity on the exact day N.

When churn is seasonal, comparing single-month retention can mislead; prefer ______ across comparable windows.

time-on-page

bot-filtered traffic only

raw signups

cohort-based retention

Cohorts control for acquisition timing so seasonal patterns do not distort period-to-period comparisons.

If end-of-month count includes paused accounts that cannot churn, you should ______ for measurement.

exclude or segment them

merge with new users

double-count them

ignore activation entirely

Including non-churnable accounts overstates retention. Segmenting or excluding them yields a fair denominator and numerator.

To align with revenue recognition, use ______ retention instead of logo retention.

dollar-weighted

IP-weighted

timezone-based

cookie-weighted

Dollar-weighted measures tie closer to cash outcomes by giving larger customers proportional influence in the metric.

Starter

Revisit denominators and cohort setup to avoid inflating retention.

Solid

Good grasp—now refine edge cases like pauses, reactivations, and seasonal cohorts.

Expert!

Outstanding—your retention math is audit-proof and actionable.

Calculating Retention Rate the Right Way Interview Questions walk you through the proper formula and pitfalls to avoid when measuring how many customers stick around. For more scenario-based practice, explore our cohort analysis interview questions designed to deepen your understanding. You can start by testing yourself with the Break-Even Retention Goals practice quiz, then tackle real-world cases in the Uplift Modeling for High-CLV Acquisition guide, and finish by reviewing the LTV:CAC Ratio Benchmarks interview resource. Working through these examples will make sure you’re ready to explain retention calculations clearly in your next interview.
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