Before we dive straight into the matter in question, let a Website Designing Company in Phoenix Arizona AZ aware you of few churn statistics.
Churn rate describes the health of your business. So it is important to ensure that your business is taking the right turns to reduce the churn rate and to improve the health of your business.
According to different studies and resources
- Reducing churn by 5% can increase your company profits by 25-125%.
- 70% of the times, the reason why customers switch companies has nothing to do with the product and everything to do with the quality of service.
- If your customer service representatives are not responding to customers over social media, your churn can increase by up to 15%.
- 82% of consumers have stopped doing business with a company because of bad customer service.
Keep these statistics in mind as we analyze the different varieties of churn.
Varieties of Customer Churn
Subscription churn is the percentage metric that calculates the total number of people who cancel your services during a given period, based on the number of people subscribed during that period. For example, if you have 100 customers and 20 had cancelled your services, you had a 20% churn rate.
Gross Revenue Churn
Gross Revenue churn is described as the percentage of your revenue that you have lost during a given period due to customers cancelling, switching or downgrading.
Remember customers with low purchasing power are most likely to churn more quickly than the customers with high purchasing power.
Net Revenue Churn
Net Revenue Churn is the best indicator that determines the health of your business. It is described as the percentage of revenue that your company has lost from existing customers during a given period.
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