Subscriber churn
What is subscriber churn?
Subscriber churn refers to the percentage of customers who cancel or stop using a subscription service within a given time frame. It’s a critical metric for any business operating on a subscription model, as acquiring new customers is often significantly more expensive than retaining existing ones. Keeping churn low helps businesses grow sustainably, boosting revenue, customer lifetime value (LTV), and monthly recurring revenue (MRR).
Churn rate can be calculated in several ways, but what matters most is establishing a clear method and tracking it consistently over time. This allows businesses to spot trends, identify problems, and refine their strategies for keeping customers engaged.
How can subscription businesses reduce churn?
There are various approaches businesses can take to reduce churn and hold on to subscribers for longer. A key strategy is to make subscriptions as flexible and customer-friendly as possible. This might include allowing customers to swap products, skip a delivery, or adjust the timing of their orders. Giving subscribers control over how and when they receive their products or services enhances the customer experience, making it more likely they’ll continue their relationship with the brand. Retaining existing subscribers not only increases lifetime value but also strengthens overall business stability and profitability.
