As user bases mature, it is likely that power user churn will continue to trend lower over time…why?

For consumer repeat products—think short-term credit financing, payday loans, or general subscriptions like SaaS—cohort churn typically declines as the cohort ages. For instance, in Month 1, churn rates can peak as high as 35%. Over time, however, these rates tend to stabilise and drop as users progress toward the projected LTV period.

This trend makes intuitive sense. Users who find less value in a product churn early—whether through cancellation in the case of SaaS subscriptions or default in credit products. What’s left is a base of more committed, high-value users who stick around.

The result? New user cohorts always exhibit higher overall churn than older cohorts, even when the retention dynamics are the same. Time, therefore, becomes a competitive moat for mature companies. Take Fido, Netflix, Apple Music, or Spotify as examples. A new market entrant might have identical retention rates, but Fido’s age and established user base give it an edge: lower overall churn.

Why does this matter?

Lower churn means Fido spends a smaller proportion of its revenue on marketing and recovery efforts to retain or replace lost users. That’s cash freed up for reinvestment in R&D, enabling Fido to innovate and outpace competitors.

For product managers, this underscores the value of nurturing customer loyalty over time. Retention doesn’t just impact user growth metrics—it creates a virtuous cycle where time becomes an asset, allowing you to build a resilient business and sharpen your competitive edge. For newer products entering into a competitive market, understanding the relationship between user maturity and churn to inform the growth strategy. The following considerations should be made:

1. Prioritise Early Retention Efforts: Newer cohorts are super volatile so doubling down on the early UX is crucial for example;
   1. Fido may offer tailored repayment schedules for first time borrowers or extend grace periods with penalties to build trust (Success indicator: Default Rates at 3 days past due date)
   2. Spotify has created onboarding flows that understand user needs and demonstrate value quickly (Success Indicator: Time To Value)
2. Use Time is a Trust Builder: Mature Products have a trust advantage but we cannot wail in this reality - what can we do to build trust faster?
   1. Leverage social proof - new products will likely have few user reviews / testimonials which and the market will likely be skeptical with the POV that these are paid Ads. It may be prudent to invest in a strong referral program from the onset. Referrals inherently carry trust because they come from known sources in a user’s network. This, however, is not full proof when you have a poor quality user base but we can still qualify ‘premium’ users and only open up the program to them. (Success Indicator - Virality as measured by referral rates & their CAC:LTV)
   2. Amplify Social Sharing: Allowing early users to share their value attained - neatly attained to their social circles may have similar effect. Additionally, enabling early users to share the value they’ve gained with their social circles can have a powerful impact. Features like Apple Music and Amazon Prime’s SharePlay, or Spotify and Apple Music’s lyric-sharing tools, demonstrate this. These experiences not only encourage organic promotion but also reinforce the emotional connection users have with the product, amplifying both engagement and word-of-mouth growth. (Success Indicator - Virality measured by user generated content driven sign ups)
3. Invest in feedback loops early on: The oldest users are a goldmine of insights. Create systems to gather feedback from this group regularly, to refine the product and create features or services that deepen long-term loyalty. This can be useful as we become more deliberate in acquisition spending - spend on channels where we expect higher quality users. Similarly, understanding drivers for churn is great for controlling these in the first place.
4. Focus on Customer Education: Churn often results from misunderstanding product value - as such we a lot of Product Led Growth initiatives and for self serve credit products we see out of app initiatives such as first disbursement calls.
5. Incentivise Behaviour that signals long term commitment: For example a PAYG portfolio at Watu, we determine the minimum amount of time for consistent payments to for low loss loss given default and reward users who get to this point in their tenure with discounts, loyalty points, cross or upselling opportunities.