The churn rate is one of the essential metrics that you must apply in your company if you want to know the churn rate of your customers. Now we will tell you more.
The churn rate indicates the percentage of customers or subscribers who stop using the services or unsubscribe from a subscription list or database. This rate not only measures the rate of customer churn, but also your company's ability to retain them.
It is a basic metric to understand customer satisfaction and thus evaluate the success of your brand, as the result of calculating this rate tells you all the customers that have been lost, and therefore are no longer in the conversion funnel.
In other words, the churn rate refers to the total percentage of customers who unsubscribed from a service in your company during a given period. This rate can be calculated on a monthly, quarterly or even yearly basis, depending on your needs.
The churn rate formula is the number of lost customers or subscribers divided by the total number of customers or subscribers multiplied by 100.
As you can see the formula is not complicated, but remember that it is calculated over a period of time, i.e. customers lost during the last quarter, for example.
It is difficult to determine between which percentages it is ideal to maintain the churn rate, as it depends very much on the sector, the company and the circumstances in general, but it is generally considered that more than 15% churn rate is an alarming indicator.
Ideally we would like to have a churn rate of 0, but this is almost impossible, so the ideal is to get it as low as possible. Here are some practices you can do to get your churn rate as low as possible:
To conclude, we recommend that you do not get overwhelmed with the result of the churn rate. Sometimes it is not so bad to lose customers, because if they do not adapt to your business and are not going to move from phase to phase in the conversion funnel, it is better that they no longer belong to your database. Remember that the churn rate is an important indicator so you should not leave it aside, but not get frustrated by the result. You have to find ways to attract new subscribers but never leave aside the ones you already have. In addition, keeping a customer is much more profitable than making a new one. Thanks for reading us!