Churn Rate
Churn rate (customer churn rate) determines the percentage of contract or subscription customers who have stopped using the company's services within a given time period. It can indicate customer dissatisfaction, better offers from the competition, or result from reasons related to the customer life cycle. This metric is usually calculated at the end of the month.
Formula for calculating churn rate:
Number of customers who stopped using the service in a given month / Number of customers at the beginning of that month
In the case of this metric, calculation results can take negative values. However, this is perfectly desirable - it means we are acquiring customers faster compared to losing them.
How to effectively lower the churn rate?
- Ask customers for the reason they left. Knowing the specific reasons for churn will help improve the offer in the future and teach building better relationships.
- Regularly measure customer satisfaction levels. This is a way to better understand their needs and observe how they change over time, enabling the offer to be adjusted to customer requirements on an ongoing basis. This promotes building bonds with customers and gaining their loyalty.
- Introduce a two-step cancellation process - its flow requires greater activity from the customer, e.g., clicking an additional link. This technique contributes to a decrease in the number of cancellations and, contrary to appearances, promotes increased engagement levels.
- Direct a special offer to customers who intend to leave or have already done so. Encourage them to stay (return) with a promotion, discount coupon, or special gift from your company's offer (ebook, specially dedicated webinar, etc.) Be sure to emphasize the individual character of the gift - it will encourage customers to maintain further contact with you.
- Personalize messages sent to customers. An individual approach in communication significantly increases customer click rates on messages - which in turn means greater effectiveness of activities.
- Launch a loyalty program - reward your customers for purchasing your products or recommending them to their friends. This will increase their engagement and encourage them to make purchases in the future, thereby building a lasting bond between you.
Read also
Useful links
https://blog.getresponse.pl/wskaznik-rezygnacji-konsumentow-wrog-twojej-listy-mailingowej.html
http://thedatadivers.com/churn-czyli-zatrzymac-klientow/