Calculating churn rate provides raw insight into your customers' loyalty. By measuring the number of customers who stop using a service over a given period of time, whether that’s a month, a year, etc., we can identify trends, potential problems and opportunities for improvement. A high churn rate may indicate a problem with the product, service or customer relationship. Conversely, a low churn rate shows that customers are satisfied and loyal to the brand.
CALCULATE CHURN RATE
By calculating the churn rate, you can quickly identify potential problems in your offer or service. You can then make targeted improvements to retain your customers. By reducing the churn rate, you can increase the average lifespan of a customer, which can significantly boost your revenues in the long term! With a better analysis of churn rate, you can also better target your marketing actions. Instead of spending resources on acquiring new customers, you can concentrate your efforts on retaining existing ones, which is often less costly and more profitable. A loyal customer base can also serve as a solid foundation for your business, encouraging positive word of mouth and attracting new customers without additional advertising costs. Furthermore, by analyzing the reasons why customers leave, you can fine-tune your product or service to better meet market needs and boost your company's revenue!
| 👤 Start of the period | Number of customers at the start of the selected period |
| 🚨 Customers lost during the period | Number of customers who left during the period |
| 📊 Churn Rate | Automatically calculated indicator representing the percentage of lost customers |
HOW DO YOU CALCULATE CHURN RATE?
With our churn rate calculator tool, fill in the following data:
- Enter the number of registered customers at the beginning of the period under study.
- Add the number of customers who left during this period.
- Obtain the churn percentage.
OUR TIPS FOR OPTIMIZING YOUR CHURN RATE
The churn rate needs to be monitored and assessed according to various criteria in order to optimize it as much as possible. So what can you do to improve your performance?
- Understand the reasons for churn: before implementing solutions, it's essential to understand why your customers are leaving. Conduct a survey to gather data on why your customers are leaving.
- Improve the customer experience: make sure your customers are satisfied with your product or service, with better customer support, a more intuitive user interface or additional features.
- Set up a loyalty program: reward your most loyal customers with discounts, special offers, or unique benefits to encourage them to stay with you longer.
- Listen to customer feedback: encourage your customers to share their comments and take them seriously, because if several customers are experiencing the same problem, it's likely that others will be too.
- Offer flexible options: if a customer wishes to reduce their subscription level rather than terminate it completely, offer them this option. This kind of sales initiative can reduce churn in the short term and give the customer a reason to stay.
CHURN RATE FAQ
How do you define churn?
Churn, often referred to as the attrition rate, refers to the phenomenon whereby customers or users stop using a service or product. It’s a key indicator of customer loyalty. A high churn rate may indicate a problem with the company's product, service or strategy. In contrast, a low churn rate suggests that customers are satisfied and continue to use the service or product.
What’s a good churn rate?
A good churn rate depends on the industry and market in which a company operates. For some industries, 5% may be considered high, while for others 15% may be the norm. Generally speaking, a lower churn rate is preferable, as it indicates greater customer loyalty. It’s therefore recommended that companies compare their churn rate with that of their direct competitors, or with the average for their sector, to get a better idea of their performance.
What’s the relationship between churn and retention?
Churn and retention are two sides of the same coin. While churn measures the percentage of customers or users who stop using a service or product over a given period of time, retention measures the percentage of customers who continue to use that service or product. Let's take a simple example: if a company has a churn rate of 10% over a given period, this means that its retention rate is 90%. In other words, 90% of its customers have remained loyal over this period. So an increase in the retention rate generally means a decrease in the churn rate and vice versa.
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