What is churn analysis ?

Churn analysis involves studying the rate at which customers cancel their subscriptions. Understanding why customers leave is essential for implementing strategies to reduce churn and retain valuable customers. This process often involves analyzing customer feedback, usage patterns, and other relevant data.

Example: A streaming service might analyze churn rates to identify patterns among users who cancel their subscriptions, such as common reasons for cancellation or specific demographics that are more likely to churn.

What does 5% churn mean?

A 5% churn rate indicates that 5% of customers or subscribers have stopped using a service or product over a specific period, typically a month or a year. This metric is often used to assess customer retention and the health of a business.

What is KPI for churn analysis?

Key performance indicators (KPIs) for churn analysis typically include:

• Churn rate: The percentage of customers lost over a specific period.
• Customer lifetime value (CLV): The total revenue a business can expect from a customer over their entire relationship.
• Retention rate: The percentage of customers who remain with the company during a specific period.
• Net promoter score (NPS): A measure of customer satisfaction and loyalty based on their likelihood to recommend the service or product.

These KPIs help businesses monitor and analyze customer retention and churn effectively.

What is the concept of churn?

It reflects customer dissatisfaction, competitive pressures, or changes in market demand. Understanding churn helps businesses identify areas for improvement in customer retention strategies.