---
title: "Renewal curve: definition, formula and example"
description: "The renewal rate at each order number: who takes the second order, the third, the fourth. It starts low and settles higher as the casual leave."
url: https://offersuite.io/glossary/renewal-curve
updated: 2026-10-13
---

# Renewal curve

The renewal rate at each order number: who takes the second order, the third, the fourth. It starts low and settles higher as the casual leave.

## In plain words

A renewal curve is the list of renewal rates by order number. The first value is the share of new subscribers who take a second order. The next is the share of those who then take a third, and so on.

The curve is rarely flat. The first renewal loses the people who subscribed for the discount, so its rate is the lowest. Those who stay are the ones who like the product, and their rate climbs and levels off. A single average retention rate replaces this shape with a straight line, and gets the early months wrong.

## Formula

- Rate at renewal n = subscribers who take renewal n ÷ subscribers who took the order before it
- Share still subscribed after n renewals = rate₁ × rate₂ × … × rateₙ

## Worked example

A curve that starts at 70.0% and settles toward 90% runs 70.0%, 80.0%, 85.0%, 87.5% over its first four renewals. On it, the engine puts a coffee subscriber's twelve-month value at $53.29.

Replace the curve with a flat 85.0% at every renewal and the same subscriber appears to be worth $60.56, and to pay back in month 4 where the curve says month 5. The flat rate keeps too many subscribers through the early orders.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## A renewal curve is not a survival chart

A survival chart shows the share of the original cohort still subscribed at each point, which always falls. The renewal curve shows the rate at each step, which usually rises. They describe the same subscribers. Multiplying the curve's rates together gives the survival chart.

## Using it

Take the curve from your subscription app, by order number, for subscribers who started on the same offer. A curve from subscribers won at full price will not describe ones won with a deep discount. With thin history, use two numbers you can defend: the first renewal's rate and the rate subscribers settle at.

## In Offer Suite

Offer Suite's simulator takes a renewal curve per renewing option, either as a list of rates or as a first rate and a settled rate. The curve is the brand's own: renewal rates are not yet observed from its orders, and the simulator refuses to guess one.

Source: Offer Suite's offer simulator.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Subscription payback calculator: CAC and churn** How much a subscriber's first order loses against what you paid to acquire them, how many renewals it takes to earn that back with churn, and in which month.](https://offersuite.io/calculators/subscription-payback)
- [Calculator **Subscription intro offer calculator** Subscribe and save, a discount on the first order, a free trial or a free product: each as a cohort of subscribers with the same costs, ranked on profit per visitor after acquisition.](https://offersuite.io/calculators/subscription-intro-offer)
- [Glossary **Retention rate: definition, formula and example** Of subscribers who received an order, the share who receive the next one. Each renewal's profit is weighted by it, so small changes compound quickly.](https://offersuite.io/glossary/retention-rate)
- [Glossary **Churn rate: definition, formula and example** The share of subscribers who leave in a period, or between one order and the next. The complement of retention, and it compounds the same way.](https://offersuite.io/glossary/churn-rate)
- [Glossary **Cohort analysis: definition, formula and example** Following a group of customers who started together, month by month: how many remain, and what they have earned so far.](https://offersuite.io/glossary/cohort-analysis)