Consumer Tech
Consumer subscriptions do not churn at a flat rate. Model acquisition cohorts against a retention curve, with revenue as active users times ARPU, so month one drop-off and the long tail are both visible.
Cohorts, ARPU, retention
The problem
Consumer retention is brutally front-loaded. A large share of a cohort is gone within the first month or two, and what survives can stay for years. Apply one flat monthly churn rate to that and you get a model that is wrong in both directions at once: too optimistic about the first quarter, far too pessimistic about the tail.
What a SaaS template gets wrong
A B2B contract model assumes a customer is either in or out for a full term. Consumer users churn on a curve that depends on how long ago they joined, so a single churn percentage cannot represent them no matter how carefully you pick the number.
The drivers
How YourCFO models it
Each month of new paying users is its own cohort, kept as a matrix rather than a single base number, so you can see which months are carrying the business.
Retention is age-dependent. A cohort's survival at month one, month six, and month twenty-four are different numbers, and your existing user base is decayed as a cohort of its own age rather than reset to new.
Blended monthly revenue per active user drives the revenue line, so a pricing or mix change moves the forecast directly instead of through a fudge factor.
Drive acquisition from a spend funnel when you are buying growth, or enter new paying users directly when you already know the number. Paid and viral loops both feed the same cohorts.
you put another
installs and new paying users rise that month, and the revenue that cohort contributes decays along your retention curve rather than staying flat forever.
The numbers that matter
What share of a cohort is still paying at month one, month six, and beyond.
Blended monthly revenue per active user, and what pricing or mix changes do to it.
Whether the revenue a cohort produces over its life covers what it cost to acquire.
The net of what you acquire and what decays, which is the number the revenue line actually rides on.
The chart of accounts seeds subscription revenue, platform and payment processing cost of sales, and marketing as its own block, so acquisition cost is visible rather than buried in operating expenses.
Common questions
Other models
Contracts, ACV, churn
Model B2B revenue the way it actually behaves: per-customer contracts, ACV, churn, and expansion, driven by a sales-led and marketing-led funnel rather than a growth percentage.
Units, price, landed COGS
If you sell physical units, margin is made or lost after the sale. Model buyer cohorts, repeat purchase, and a channel margin waterfall across D2C, marketplace, and wholesale, on landed cost rather than list price.
Order book, capacity, yield
Demand you cannot produce is not revenue. Model an order book against real production capacity from machines, shifts, and yield, with output clamped to whichever is lower and unit cost moving with utilization.
Further reading
Set up the model that matches your business, then watch what your next decision does to the bottom line.