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The Retain step allows you monitor and act on retention trends within your subscriber base. Many different aspects of your retention performance can be accessed here, showing you who churns from your service, when they churn, and why.
This article focuses on your subscriber retention analytics.
- Click here for a guide to your subscription churn analytics.
- Click here for a guide to your retention cohorts.
- Click here for a guide to ChurnIQ.
Strong subscriber retention is a primary driver of growth in subscription businesses. The subscriber retention dashboard is the scoreboard for your retention performance. It focuses on 3 key elements of this performance, retention rate, retention length, and churn timing.
Key Insights From Your Subscriber Retention Analytics
- What proportion of my subscribers am I retaining?
- How long (days) do I keep subscribers for? Is this lengthening?
- Where in the subscriber lifecycle does churn peak? When should I take action?
Using Subscriber Retention Analytics
Your subscriber retention analytics have a large number of applications. Here we will describe some of the key points to focus on.
1. Monitoring your churn health
Marginal shifts in your retention rate (eg. 2-3%) are magnified in your revenue performance. With other factors constant, such improvements would by themselves grow your monthly recurring revenue by a quarter or a third after just 12 months.
Given the business impact of this trend, the most important application of your subscriber retention analytics is monitoring the general churn dynamics your subscriber base. A downward trend in your retention rate is a serious issue, and an upward trend is a major success.
Your subscriber retention analytics should be your starting point for evaluating the urgency of churn prevention campaigns. They should help you to establish your understanding of:
- What is my ‘normal’ or expected churn rate?
- What is an unacceptable rate of churn given my growth targets?
- What level of improvement should I target with campaigns?
2. Modelling the subscriber lifecycle
A second key use for your subscriber retention analytics is modelling the ‘typical’ subscriber lifecycle. The hyper-accelerated lifecycles of internet consumers makes a clear picture of the lifecycle structure more important now than ever before. Simply because of how easy it has become for customers to switch providers, and how quickly they are willing to do so.
The first question to ask is how long a typical subscriber lifecycle lasts? Based on this insight, you can quickly create at least 3 highly relevant segments for your marketing campaigns.
The first is the new segment. These are evaluators. They are new subscribers who have been customers for less than 50% of the typical lifecycle. These subscribers are still asking themselves if they have made a good purchase.
The second is the engaged segment. These are subscribers who have stayed for at least 50% of the typical lifecycle. They have evaluated at least some elements of the service positively. They may however have certain unaddressed needs, some sources of dissatisfaction, and some temptation to consider alternatives.
The third is the loyal segment. These are subscribers who have been retained for at least 150% of the typical subscriber lifecycle. They are potential social media advocates, and candidates for appreciation messages and upgrade offers.
Where these segments are for you entirely depends on your service. They are unique to most subscriber businesses. Lifecycle segments are however a universally practical means of organising marketing campaigns.
3. Anticipating churn timing
A third way to use your subscriber retention analytics is to anticipate points of high churn risk in the subscriber lifecycle. Typically a monthly subscription business will experience churn peaks inside the first 6 months of the lifecycle. Month 2 is typically a high risk period for example.
Knowing when churn spikes allows you to focus your retention efforts efficiently. Combining lifecycle data with subscriber engagement data will allow you to go one step further and target subscribers not only on the basis of their proximity to a high risk time point, but also on the basis of how much they seem to be enjoying your content.
Subscriber Retention Metrics
You can find definitions, calculation logic, and analytical uses for each Subscriber Retention metric on their respective pages.