Churn Rate Calculator

The equation for churn rate is simple.

Churn rate = (Customers you lost over a month) / (Customers you had at the beginning of the month)

When you multiply your results by 100, you’ll see the figure expressed in a percentage, which is your churn rate.

The benefits of using a churn rate calculator are seemingly endless. Here are a few of the best:

YOU DON’T HAVE TO WORRY ABOUT MISCALCULATIONS
If math isn’t your strong suit, or you’d rather not worry about doing multiple calculations with a calculator, using a churn rate calculator can clear up your issues.

Our churn rate calculator gives you results in seconds — and all we require from you are two numbers — the customers you lost over a month and the number of customers you had at the beginning of the month.

THE RESULTS PROVIDE A BUSINESS CHECKUP
Your churn rate can be extremely eye-opening when you calculate it for the first time. Typically, you’ll want to keep your churn rate around 2%.

If your churn rate is higher than you expected, it can encourage you to make better business decisions in order to retain clients.

WHEN YOU IMPROVE CHURN RATE, YOU IMPROVE REVENUE
When you use a churn rate calculator and realize that you need to make business improvements, you can see a dramatic increase in your revenue year over year.

A churn rate calculator can help you make sense of your growing or shrinking customer base and help encourage you to make improvements that could help your business grow financially.

Your churn rate tells you a lot of things about your company, and when you use a churn rate calculator, you can gain insight into your changing customer base.

If your churn rate is high, it means that you have a high percentage of clients dropping your company every month in relation to the number of clients you attracted. If your churn rate is low, it means that you’re keeping a high percentage of the clients that you attracted within that monthly period.

Either way, your churn rate is an important metric that you can use to determine the health of your business.

If you ignore a high churn rate, you’ll likely lose more money than you’re making, and over time, your revenue will collapse. A high churn rate also sounds the alarm that you need to improve something within your business — whether it be the quality of your products or services, customer satisfaction, or quality of targeting.

Picture this, it’s a hot sunny day, and you’re trying to fill a watering can to water your garden, but there are holes in the bottom.

Just as quickly as you are filling the watering can, water is also leaking out.

Over a few minutes, if you’re losing more water than you are adding, you’ll end up with a watering can that’s never full.

You can use the same idea to illustrate churn rate. The water going into your watering can is new customers, and the water seeping out the bottom are those who churn.

If you have a lot of water, or customers, coming in, you’ll likely be able to keep your vessel full. However, if you don’t have a lot of customers coming in, those who are churning will cause a customer deficit.

Over time, you’ll see a decrease in your customer base, which means a decrease in revenue.

It’s important to pay attention to your churn rate so that you can keep track of holes in your strategy to keep loyal customers from dropping your product or service.

If you don’t you could find your business in serious financial trouble.

The hardest part about churn rate is that it can sneak up on your business. If you don’t consistently monitor your customer attrition with a churn rate calculator, you won’t have any insight into what direction your company is headed.

If you find a high churn rate, it’s time to make changes immediately before your loss of customers changes your company forever.

There are a few things that can affect your customer attrition or churn rate.

Below, we’ll talk about the most important areas, along with providing you with some tips to fix them.

Targeting

If you fail to target users who need your products or services long term, you could see a high churn rate. Targeting users who will keep coming back for your products or services is the best way to go when you want to decrease churn rate.

The fix: Target users who can use a wide variety of your products instead of just one, or if you only offer one product or service, make sure that you target users who can use your product long-term.

Marketing

Marketing is an expansive term that includes a wide variety of strategies. However, at a high level, your marketing strategy can affect your churn rate. Remember how we just mentioned the importance of targeting? The marketing strategies you choose can allow you to target more effectively.

The fix: Use marketing strategies like local SEO or pay-per-click advertising (PPC) that allows you to hyper-target your audience to help you decrease your churn rate. Not only that, but you could also use marketing strategies like remarketing ads to ensure that your audience keeps coming back for more.

Satisfaction

Plain and simple, if your audience doesn’t like your products or services, or even your customer service, they won’t continue to buy from you. Customer satisfaction is key to churn rate.

The fix: Provide out-of-this-world customer service, be thoughtful, and create products and services that are good for your customers — not your wallet. Also, be sure to put in the time and effort upfront to create products that are worth coming back for and create high client satisfaction.

Product or service quality

The quality of your product or service can greatly affect your churn rate calculator results. Although it might sound harsh, if you don’t create a quality product or provide quality services for your audience, their dissatisfaction could lead to a high churn rate.

The fix: Even if it costs a little more for your company to produce higher-quality products, spend the money upfront to decrease your churn rate over the life of your business. It will also pay off to put the extra time into creating quality service benchmarks to ensure that you always provide your customers with the very best in terms of service.

WebFX knows that customer retention is one of the most important factors of your business. Not only can it reflect badly on your company if you don’t retain customers, but it can also decrease your revenue year over year.

If you’re looking to improve your churn rate and your bottom line, WebFX is here to help.

We’re a full-service digital marketing agency that can provide you with key marketing strategies to help you target your perfect audience in order to decrease churn rate.

We offer marketing strategies ranging from SEO and PPC to video production and customer geofencing.

If you want to get started improving customer retention and churn rate, contact us online or give us a call at 888-601-5359.