Churn Rate
Churn rate, or cancellation rate: what is it and how to reduce it?
Churn rate, or cancellation rate, refers to the percentage of customers or subscribers who stop using our services during a given period of time. It is a term widely used in email marketing and a very useful metric for our bulk email sends, although it is also used in other sectors to track customer loss.
In our field, email marketing, if we have 100,000 subscribers to our daily news newsletter and 1,000 of them ask to unsubscribe using the unsubscribe link or any other means in the last month, dividing 1,000 unsubscribes by 100,000 subscribers gives us a churn rate of 10%.
It is calculated by dividing the total number of unsubscribes by the number of subscribers and multiplying the result by 100.
1. How to reduce the churn rate?
First of all, it’s important to clarify that we’re talking about reducing, not eliminating the churn rate, because achieving 0% churn is practically impossible. There will always be subscribers who, for whatever reason, want to stop receiving our newsletters.
But what we can do is try to keep the churn rate as low as possible. To do this, we need to follow these best practices:
– Analyze yourself and your competition: when subscribers give you their email address to subscribe, it is because you offer them content or information that is valuable to them. When they unsubscribe, it is because what they receive no longer interests them. So be self-critical and review the content you offer to see if its quality has dropped.
Similarly, the problem may not be that your quality has dropped, but that your competitors are offering better content than yours, so it is always advisable to subscribe to your competitors’ newsletters to stay on top of this.
– Update and take risks: more or less frequently, you need to update your newsletter, because what works today may not work so well after a few months. For this reason, try changing elements of your newsletter, such as the design (without straying from your brand image) and the type of content. After some time, measure the results and consider improving again whatever you find is not being well received.
– Find out why your subscribers unsubscribed from your newsletter: the best way to solve a problem is to know why, so ask your subscribers what led them to unsubscribe and then solve what led them to unsubscribe.
– Define an email marketing strategy: Sending bulk email marketing campaigns and running email campaigns properly is not just about sending emails and hoping sales will increase on their own.
It is necessary to set objectives, define the periodicity of the campaign, segment subscribers, have reliable metrics, offer valuable content, etc.
Only with a solid strategy can you achieve the desired KPIs and contain the churn rate.