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What is the Churn Rate and how is it calculated?

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What is the Churn Rate and how is it calculated?

Measure the loyalty of your customers by calculating the Churn Rate to know how many of them stay with you and how many leave you to go with the competition. Today in Soy de Marketing we are going to see his formula to find out exactly the proportion of customers who leave us.Attracting new clients is estimated to be about ten times more expensive than keeping those we already had in our portfolio. In order to develop mobile number data information strategies that allow us to retain customers, we first need to see an X-ray of the current state. For this, the calculation of the Churn Rate is essentialSome brands like Harly Davison have managed to create a truly strong user community around a lifestyle that includes, for example, the need to own a brand motorcycle. To get into context, in the next section I comment on some of the results of a study on brand loyaltyPoinThe research carried out by Andema had 1009 surveys carried out in all the Autonomous Communities of Spain and taking into account their population, so a weighting was made. The error is +/- 3.1%Based on the results, a positive relationship is observed between age and the degree of loyalty , which means that in general terms we find more unfaithful to brands among young people.
The women are more faithful than men in almost all categories except those that refer to female cosmetics.
In the intermediate-sized cities in the study, that is, those with between 50 and 100,000 inhabitants ”are the groups with the most loyal consumers . It should be noted that in the largest cities, great loyalty is observed when we talk about car brands.

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Those consumers in charge of making the purchase of the home are postulated as more loyal than those who make individual purchases for the home. gulf email list The group of respondents who declares to be a student seems to be more loyal to brands in those groups of products and services where we are less loyal in general .In addition, the study reflected the most demanded factors when evaluating a product / service according to the respondents. Social desirability must be taken into account in the results. However, they serve our starting point:
Churn RaChurn Rate is a percentage that measures the rate of customer abandonment with respect to a service that is generally contracted by subscription. For example, phone companies struggle to minimize their churn rate, which is synonymous with higher loyalty.
The CR formula iChurn Rate (CR): Clients who have fallen in the period / Total clients for the perioThe theory is always better understood with an example, so we are going to see the practical application. In the following image we see the sales of a real service marketed over the internet, launched in a certain country in SeptemberThe columns represent the customers that enter / remain month by month and are differentiated according to the month they arrived. In this way we can see that 141 entered in September and in February there were 114 of those who had hired in September. Likewise, 87 entered in October and a month later only one had fallen (86). So onIf we calculate the Churn Rate for each month (low / total customers) and make the average, we obtain the monthly Chrun Rate of our service in the country. In this case the Churn Rate is 3.20% Knowing the number of average clients that contract the service and the Churn Rate, we can calculate thaverage cancellations per month. In our example there are 77 new clients and 10 monthly cancellations.

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