Your Churn Rate is one of the key indicators of the health of your subscription business. Reducing your rate of churn impacts your business outcomes more than any other single factor including your rate of subscriber acquisition.
Your churn rate is closely connected to your subscriber lifecycle. For example, a monthly retention rate of 80% implies a subscriber lifecycle of 5 months. Increasing that retention rate by 10% increases the average subscriber lifecycle to 10 months, and doubles the lifetime value of your subscribers.
Cleeng measures your retention performance using an 'adjusted churn' methodology. This is a more nuanced method for measuring churn in high-acquisition businesses like subscription services.
Measurement: (Customers churned in month/Customers at start of month + New customers in month)*100
Customers who first churn and then restart during a single month do not contribute to your churn rate. This is because they are still active at the end of the month.
Variations on the presentation of your churn rate
Churn Rate This Month
Your churn rate will be presented in the Overview and Retain dashboard scorecards for this month. This is the exact same calculation as defined above, however, it will be showing you the rate of churn for this month to date.
By contrast, trend charts displaying historical data will always display your data for complete months. Your churn rate for the month to date will usually increase gradually over the course of the month, as the number of churned subscribers accumulates.
Churn rate for paid subscribers
Another important distinction to be aware of is the churn rate for different subscriber views. This provides you with the option of looking at the churn rate for paying customers only.
This may be a more useful metric for you than the churn rate for the overall subscriber base, given that free subscribers were not contributing revenue.
The calculation for paid subscriber churn is exactly the same as defined above, however, each element (churned, start of month, new in month) only considers paying subscribers.
You can also view the churn rate for free subscribers, but this is less meaningful. These subscribers have a limited time for which they can be free, and in case you do not want them to remain part of the free subscriber base forever.