What Is Churn, and How Does It Affect Your Subscription-Based Company?
As a subscription-based company, your business is centered around one thing: your loyal subscribers. You want to gain as many subscribers as possible, but the inevitable result is that every company implementing recurring billing strategies will have customers who end their subscriptions. This is what’s known as “churn.” You can’t keep 100% of your customers—some subscriptions simply come to an end. However, if you understand churn and its effect on your business, you can keep these cancellations to a minimum. Here is a breakdown of everything you need to know to keep your churn percentage as low as possible. The Basics: What Is Churn? Churn sounds like a scary thing to happen to your business, but it isn’t. Put simply, churn is the percentage of canceled subscriptions you company receives in a certain amount of time. That time frame is up to you when you are making your calculations. Calculating your churn rate allows you to see how many customer subscriptions ended in