METRICS AND PERFORMANCE 7 CHAPTER 1 MEASUREMENTS 01 Logo Retention Customer, or "logo," retention is the measure of how many customers in a cohort remain after a certain period. Logo retention can be represented as a single figure. For example, if a company says they "have 67% logo retention," it means they have been able to retain 67% of their customers on average every 12 month, or 67% x 67% = 45% in two years. Cohort Cohort size Share of customers remaining #of customers Sign-up month added Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 2021 July 178 100% 97% 93% 90% 87% 84% 82% 80% 78% 75% 73% 71% 60% 58% 2021 August 180 100% 97% 97% 93% 91% 89% 87% 84% 84% 82% 80% 78% 69% 67% 2021 September 149 100% 100% 97% 95% 92% 92% 89% 89% 87% 84% 81% 79% 68% 68% 2021 October 191 100% 98% 96% 96% 94% 92% 90% 87% 85% 83% 81% 79% 69% 2021 November 200 100% 98% 96% 94% 92% 90% 90% 90% 88% 88% 86% 86% D 2021 December 210 100% 98% 96% 94% 92% 90% 89% 87% 87% 87% 87% 2022 January 208 100% 100% 98% 98% 98% 98% 96% 96% 94% 92% 2022 February 179 100% 98% 98% 98% 98% 97% 96% 94% 94% C 2022 March 176 100% 100% 100% 100% 100% 100% 99% 98% 2022 April 227 100% 100% 99% 98% 97% 96% 96% 2022 May 193 100% 100% 100% 99% 99% 99% 2022 June 233 100% 99% 99% 99% 99% 2022 July 202 100% 100% 99% 98% 2022 August 243 100% 99% 99% B 2022 September 213 100% 100% 2022 October 215 100% A E Weighted average 100% 99% 98% 96% 95% 93% 91% 90% 87% 85% 82% 79% 67% 64% The weighted average logo retention rate is in relation to the number of customers added from each cohort. While the aggregate retention figure can be used to compare the company against others, it doesn't tell the full story, and that is not the reason why retention metrics are used. Instead, analyzing the developments of individual cohorts is what reveals how the company is performing. For example, looking at the table above, we can see that: A. The number of customers added each month is increasing, indicating the company is getting better at acquiring new customers. B. A larger share of customers remains from more recent cohorts than from older ones, indicating the company is either acquiring more sticky customers or they are getting better at customer success. C. There is a significant increase in the share of customers remaining between the December 2021 and January 2022 cohorts, indicating the company likely started identifying more sticky customer segments to target for new sales.