Customer Churn rate? 😠 Example? Reasons? Tool to measure & Reduce it?
What is the customer churn rate?
The churn rate is the percentage of subscribers who cancel or do not renew their subscriptions over a particular period.
It is a crucial metric for subscription-based businesses, as it helps them evaluate the health of their customer base and make informed decisions to improve customer retention.
A high churn rate can indicate issues with customer satisfaction, product quality, or pricing.
For example
Let's say a subscription-based business has 10,000 customers, and its monthly churn rate is 5%. This means that every month, they lose 500 customers.
Over the course of a year, this would mean that the business would lose 6,000 customers. If the average monthly revenue per customer is $50, this would result in a loss of $300,000 in annual revenue.
Reasons for High Customer Churn
- Bad customer service
- Products or services not tailored to their needs
- High prices or poor value
- Extra charges
- Poor quality products or services
- Difficult or confusing experience using the product or service
- Lack of communication or engagement with customers
- Failure to meet customer expectations
- Limited payment options or payment problems
- Competitors offering better options
- Unsatisfactory post-sale support or maintenance.
Which industry is more affected by the high churn rate?
Churn rate can impact a variety of industries, particularly those with subscription-based or membership-based business models. These may include:
- Streaming services (e.g. Netflix, Hulu)
- Software as a Service (SaaS) providers (e.g. Dropbox, Salesforce)
- Health and fitness services (e.g. gyms, online fitness programs)
- Telecommunications providers (e.g. mobile phone, internet service providers)
- Credit card companies and banks
- Retail subscription services (e.g. Birchbox, Stitch Fix)
- Online education platforms
- Magazine and newspaper subscriptions
- Video game and app developers with recurring in-app purchases or subscriptions
- Insurance providers (e.g. health insurance, auto insurance).
- Others
It means that a high churn rate is a common problem for every online business. There are multiple ways to reduce it. Firstly, you need to understand the major causes of the high churn rate.
To do this, you can run a monthly/quarterly survey to find out what the common problem is your customer-facing while using your service or product. Once you receive their feedback, take action to improve your service as much as possible.
Another way to capture the reasons for customer churn is to find out why they are leaving your product. This can help you understand why your customers, who initially believed in your product, have left. You can use churnfree to capture the reasons why users are leaving. Churnfree is not only a tool for collecting feedback, it is an all-in-one solution.
Which is the best tool to track and manage customer churn rate?
Churnfree is one of the best customer retention tool which is helping multiple businesses to reduce their high customer churn rate and increase their monthly recurring revenue (MRR).
Why is it the Best tool? Features of Churfree:
Churnfree provides you with an all-in-one solution for your membership business. All the core feature which makes your business successful by measuring and reducing the churn rate.
✔️ Cancellation Feedbacks
Churnfree allows you to effectively collect valuable customer feedback to avoid churn. So, you can use the information as a guiding resource for the growth of your company.
✔️ Subscription Pauses
Directly integrate your subscription billing platform to Churnfree and allow your customers to stick around longer by pausing their subscription instead of canceling.
✔️ Customer Retention Offers
Churnfree allows you to create smarter discounts via custom offers to boost your retention rates by up to 35% and increase your company’s profitability with ease.
✔️ Customer Retention Insights Analytics
Handle Churn Management in a Single Dashboard Efficiently
✔️ Customer Retention Cancellation Flows
Form a better connection in every cancellation attempt to increase customer retention. Build interactive and engaging cancellation flows with Churnfree.
Sign up today for free to keep your business healthy with Churnfree
That was really effective
Thank you!
@buckyjames, thank you for sharing good content about customer churn. You're right about the first step being to get a review from our customers about the product.
Most companies don't focus on this, and instead, their main goal is to acquire as many new customers as possible. However, the reality is that retaining customers should be the major goal.
Churfree looks great for to retain customers.
Welcome; exactly, and thanks for your nice reply!
I truly believe that early and regular engagement with the customer is the true and only way to reduce churn.
People (past self included) always underestimate the value of a customer that feels seen, heard and cared for. Adapt on these things and watch your CLV 🚀
Exactly this is the best strategy or steps to make your business successful.
In our previous project we were facing high customer churn and our proudct is working great but we do not know what is the major cause of high churn rate.
After spending 20 days our team know what is the cause of high churn was high price where our competitor running ads and showing very low price to attract our customers.
We plan and ask the feedback for our customer and got useful insignts and we run deals promotion to attract the new and old customer and this worked for us.
Thanks i hope your product have all feature and will test it for our next project.
Sure, it will work for all membership businesses... If you have any query; you can contact us any time to get help for your business to reduce churn rate.
I like your example
thank you!