Churn

Hi, this is Valerie and this is video about churn rate. We are going to speak about the importance of churn rate. We are also going to cover the benchmarks for the churn rate. I'm going to give you the formula to calculate the churn rate and we are also going to speak about the reasons why some users churn, unfortunately. Let'start. So part one, what is churn rate? Churn rate is the situation when users leave you. So you attract them, they stay with you for some period of time, they use your product, they pay for the subscription, but then they say goodbye or don't say anything and just leave you. So that situation is called churn. Part two, why is it actually important to pay attention to the churn rate? Well, simply because it is much more expensive to attract a new user into a product as that implies marketing, campaigns, so you're going to spend a lot on the content, on the website, on the acquisition, yeah, so the cost is really high and you are aware of it. If you don't know it, here's the video to calculate it. So it is much more expensive to attract a new person into a product rather than keep the ones that are already with you. So the retention strategy is much cheaper compared to the attraction. Part three, the benchmarks for the churn rate. So if So you shouldn't care a lot about it. So okay, 2% yeah, you're doing okay. But in case it is 8%, that is the time when you should ring the alarm. Next, definitely you want to calculate the churn rate for your business. So here's the formula that you can use. So you're going to take the n So here's the n If it is around 2%, you're okay. If it is around 8%, well, time to do something. So to calculate churn rate, you need to know the n Well, definitely it is important to know the n So you're going to create different types of dashboards. You're going to use some special products for these, but don't forget you need to track every n So analytics should be as granular as possible. So finally, let's take a look at the reasons why users might want to leave your product. Well, the obvious reason is that there is no value that they get from your product and the price compared to this value is much higher. So it's time to say goodbye for them. There is of course another reason for this and that is connected with the misunderstanding of your product. It is either complex or it doesn't give the clear value or the value is not instant. So they cannot measure it. They do not understand it from the very beginning of using your product. Well, again, that is connected with the value, but it is also connected with your product being complex. There may be actually one more reason from the design point of view that is really bad usability. So if there is a competitor on the market with the similar value, so they're So always test usability of your product. For example, you can check this video and find out how you can test the usability of your product. So basically that is it enough theory for today. Right now we are going to work on the practice and that is the next video about churn. See you.