Now, customer churn is the number of customers or subscribers who have stopped using your product or left your company. Calculating and tracking churn rate can help businesses understand how they’re performing against competitors, and create strategies to enhance and improve brand loyalty.
Here is an example how you can easily calculate churn.
Let’s imagine at MASS DATA we have 1000 customers at the start of January this year, and in the beginning of April we have 900 out of the previous 1000 left. Although we got new customers we are not going to add them here. Now, we find that we have lost 100 customers and that out of the original of 1000 is 10% and thus our churn here is 10%.
You can also calculate Gross revenue churn which oftentimes is also called monthly recurring revenue of MRR. This church calculation helps you realize how much revenue is lost due to customers leaving or downgrading from your product of services. The gross revenue churn rate can be determined by subtracting the revenue at the end of the time frame from the revenue at the beginning of the same span of time, then dividing the resulting number by the revenue at the start of the period.
The complete cost of customer churn contains both lost income and the marketing expenses involved with swapping those customers with new ones. Reducing customer churn is a key objective of every online business.
The Importance of Predicting Customer Churn
When a business is able to predict well ahead of time that a customer is at risk of churning, MASS DATA smart tactics can help recover or stop this customer from leaving. This adds immense credibility to your business along with lost revenue.
We have to always remember, that it is always better to have a loyal customer stay with you as long as possible and that customer acquisition is difficult and expensive. MASS DATA uses well tested methodologies such as our proprietary targeted provocative retention. You can rest assured that we will help you find several ways to make sure you can seal that leaking funnel of customers and keep your bottom line rising every quarter. Contact us today for a free consultation!