Losing a new client is not a good news for any business. I know that sometimes you have to lose, so you can win at the end. But losing one of your biggest clients is not that kind of the good loss.

As a Digital Marketing Agency in Egypt; in order not to lose more, you should know what customer churn rate is, and how to calculate it.

What is customer churn rate?

Churn Rate or Rate of attrition, and also known as Customer Churn, is a rate that measures your company loss. 

In other words; it measures the rate at which your clients decided not to do a business with your company again. 

For example; it measures how many people have unsubscribed your channel, within a given period.

For sure; customer churn rate affects your company growth and profit.  

Types of Churn Rate and how to deal with them

Churn Rate is an important factor that you should pay attention for, exactly like the growth rate.

Churn Rate has many types, such as the following:

1- The Revenue Churn:

Okay, Revenue Churn and customer churn is not the same exact thing, but you still have to consider it as one of the most important metrics.

The Revenue Churn refers to the amount of money you have lost within a given period, and it can give you clear image about your current situation. 

It can be an alert for you, telling you that you are targeting the wrong customers, or your customers have downgraded their subscription, for a reason or another.

In general; it tells you that you are not making the same amount of money like before.

2- Competition:

As I told you before; in a way or another, you are going to lose some customers, and your competitors are going to win them somehow.

In this point, you should focus on targeting the right audience, and increasing your advantages.

Losing some clients is not the end of the world; it is part of the game. It may tell you that it is time to change your marketing strategy.

How to calculate it?

You can calculate churn rate like the following:

Determine a period of time, a month or a year for example.

The formula is: Your lost customers÷  your total customer number at the start of the time period you have determined × 100.

Determine the number of customers that unsubscribed at the end of the time period, which will show you whether you have gained or lost customers.

Advantages and Disadvantages of Churn Rate

Churn Rate like anything else has two sides; Positive and negative, let us know more about it.

Churn Rate provides you with a clear image about how your business is doing? 

It shows you what to improve, if you are standing tall in your industry, and if your strategy needs improvement.

On the other hand; Customer Churn Rate won’t give you a hint about the type of customers that leave.

Time to sum up:

Customer Churn Rate can be used to measure how many people decided to stop business with you, but it won’t give you accurate information about the type of people leaving.