Customer churn

Sara Heegaard March 3, 20222 minute read

Sara is a copywriter focused on lifting up Recharge's merchants, partners, and their customers. Before Recharge, her past lives included writing and editing at four different subscription... Full bio

What is customer churn rate?

Customer churn (also referred to as customer attrition) is when customers stop using a business’s products or services over a certain period of time. Reducing churn and improving customer retention rates increases revenue and customer lifetime value for merchants. Conducting churn analysis is crucial for understanding the causes of customer churn, identifying where in the customer journey the churn occurs, and generating solutions to improve customer retention. 

Churn rate is one of the most important measurements for subscription companies to track. If the number of new customers joining your subscription program is less than the total number of customers lost from your brand, your business is losing its lifeblood. The “leaky bucket” is an analogy that is often used to envision customer attrition. Methods for reducing customer churn are known as retention strategies. 

Strategies for reducing churn in subscription businesses

Offering skips and swaps are two best practices to reduce customer churn, keep existing customers engaged, and boost brand loyalty. Allowing customers to skip or delay their deliveries retains them as active subscribers for a longer period of time, boosting lifetime value and increasing customer satisfaction. Swaps are another proven retention strategy for subscription model businesses, creating a more personalized user experience. Finally, conducting customer churn analysis is an important last step for understanding negative churn and optimizing any frustrating aspects of the service.