Understand how many customers continue to be active over time
Mesure the impact of your customer engagement activities
Increase customer retention
Understanding retention, and how it evolves over time is key if you're a subscription business. Indeed, you won't make much money the first month of your customer's subscription. Your business makes sense only if they stay long enough to pay back your acquisition cost and more.
A cohort analysis is the best way to look at this. By week or month cohort (ie. all the customers who started using your product during that time period), we'll look at whether they're still active in the subsequent months.
If you see your cohort rapidly go to zero, then you have a big problem. There's no point continuing working on acquisition if you have this problem. You need to figure out why your customers stop using your product and fix it, otherwise you'll go out of business very soon.