Of 100,000 customers who were active in the year 2005, only 60,000 are still active in 2006. What would the average retention rate be?
A)It cannot be determined because the initial 100,000 have not been segmented into cohorts.
B)0.4
C)0.54
D)0.6
E)None of the above

Question

Quizplus · Accepted Answer

The average retention rate is calculated by dividing the number of customers still active by the initial number of customers. Here, 60,000 of the initial 100,000 customers are still active, so the retention rate is 60,000 / 100,000 = 0.6 or 60%.

Of 100,000 Customers Who Were Active in the Year 2005