This article will walk you through on how churn is calculated on the Cratejoy platform.
What is churn?
Churn is a measurement of how many subscribers your store is losing month after month. It is one of the most important statistics that can be measured for a subscription business.
The opposing side of churn is retention, which is the measurement of how many subscribers your store is keeping month over month, and churn plus retention should always equal 100%.
How do you calculate 30 day churn?
The calculation is as follows:
Churn = B / A
A = The number of subscribers who were active 30 days ago
B = The number of subscribers from A that have left since then
So if you start the period with 100 subscribers, and lose 25 of them, then your churn is 25% for the period in question.
What represents a 'good' churn rate?
Churn is always going to be unique to your business and your business category, and so what is considered good will be different between different merchants. Here are some rough breakdowns on how the average merchant should judge their own churn:
- < 7%: Fantastic
- 8-15%: Good
- 15-20%: You can likely improve this
- > 20%: You should improve this ASAP