A customer churns when they do not renew their subscription at the conclusion of their current subscription period.
How to use it:
- Understand that a high amount of churn will significantly reduce the growth of your company.
- Churn is an excellent indicator of problems with your product or service.
- A sudden increase in churn can be a sign that a competitor is encroaching on your business or that a recent change to your product has reduced customer satisfaction.
The basics of how we calculate churn:
- Churn occurs when a customer's only subscription expires and they do not renew their subscription or activate a new subscription the same day that their previous subscription expired.
- If a delinquent payment is eventually paid, we don't consider that customer to have churned. They might be temporarily flagged as churned until their payment is processed.
- A customer with multiple subscriptions does not churn if only one of their subscriptions expires. The expiration of a single subscription is tracked under subscription contraction instead.