On Retention (formerly, N Day Retention)
"On" Retention calculates the percentage of users who come back on a specific time unit (e.g. day, week, month).
After a user completes the “A criteria”, they will belong to a time unit cohort that corresponds with when they did the "A event" and the Retention report will start the clock counting from the time that particular user performed that "A event". When using "On" Retention, that same user must return to fulfill the “came back and did B criteria” on a specific and exact time unit relative to when they did the A criteria to be counted as retained.
For example, day 5 retention is the percentage of users who “came back and did B” exactly on the fifth day after they did the A event.
"On" retention is useful to understand high-level usage patterns. We also recommend using "on" retention when your product relies on users returning in each and every time unit.
On or After Retention (formerly, Unbounded Retention)
"On or After" Retention calculates the percentage of users who come back on a specific time unit (e.g. day, week, month) or any time unit afterward. A user can fulfill the "came back and did B criteria" on a specific time unit or any time in the future to be counted as retained in "On or After" Retention.
"On or After" Retention gives you a better sense of how long you are holding on to your users in an absolute sense. It will tell you how many users used your app and then ever returned to find more value. In other words, it's the opposite of the overall churn of your user base.
We think "On or After" retention is a better fit for most businesses and it is the default calculation for the Retention report. This is because it’s more common that a product doesn’t require users to come back in each time unit to achieve the product’s value proposition, and more often than not when doing retention analysis we don’t only value the user coming back in a specific time unit as long as they eventually do. However, if this is important to you and your business, please utilize "On" Retention.