The Ultimate Guide Of Customer Loyalty Program
Why Customer Churn Rate Matters
Why Customer Churn Rate Matters:-
Customer Churn and Retention- In marketing, we spend tons of your time trying to draw in new customers, but it is also important to understand what percentage of customers you would possibly be losing.
So, we're gonna discuss the churn rate. Unfortunately, not all customers are loyal. Sometimes, no matter how hard you try, some customers decide to move on to another company and its product. Knowing what percentage of customers you lose to the competition, versus what percentage you keep will help inform your marketing strategy and should even guide your product and pricing strategy.
Your customer churn rate refers to a percentage of customers that your business loses over a specific period of time. And the way to figure that out is pretty straightforward. So to understand your customer churn rate, you take the number of customers lost over a time period over the number of active customers at the start of that time period. So for example, let's look at Netflix.
Customer Churn Rate Formula at the beginning of 2016, let's say Netflix had 45million U.S. subscribers, and then they had a grandfathered in a pricing structure that expired during the middle of that year, and they lost half a million subscribers. So you are doing some quick math thereon and therefore the churn rate is 0.01, or 1%. Now, a 1% churn rate. , or any churn rate, doesn't necessarily mean Netflix is doing poorly, they could've added millions of subscribers during that year.
All this is doing, is looking at how quickly they re losing subscribers, regardless of how quickly they re gaining subscribers. So depending on your product and industry, knowing your churn rate can help you understand why customers are leaving so that you can reduce that number in the future, through revised marketing, product plans or even changing the pricing.
customer churn rate saas, The reason it's important to identify and address these issues is that it's often much more expensive to acquire a new customer than it is to keep a current customer happy.
Final Words I hope this article helped you know about churn rate and customer lifetime.
Tags: Churn Rate, Customer Service, Hospitality Industry, Hospitality Management, Customer Retention, Customer Expectations, Customer Matters.
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