Churn Rate
Churn rate or cancellation rate: What is it and how to reduce it?
The churn rate or cancellation rate refers to the percentage of customers or subscribers who stop using our services over a given period of time. It is a widely used term in email marketing and a highly useful metric for bulk email campaigns, although it is also used in other industries to track customer loss.
In our specific field of email marketing, if we have 100,000 subscribers to our daily newsletter and 1,000 subscribers request to unsubscribe using the opt-out link or any other method within the last month, dividing 1,000 unsubscribes by 100,000 subscribers gives us a churn rate of 10%.
This 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, we must clarify that we are talking about reducing, not eliminating, the churn rate, since achieving a 0% churn rate is practically impossible. There will always be subscribers who, for whatever reason, will no longer wish to receive our newsletters.
However, what we can do is try to keep the churn rate as low as possible. To do this, you need to implement these best practices:
– Analyze yourself and your competitors: When a subscriber gives you their email to subscribe, it is because you offer them valuable content or information. When they unsubscribe, it is because they are no longer interested in what they receive. Therefore, be self-critical and review the content you offer to see if its quality has dropped.
Likewise, the issue might not be that your quality has decreased, but rather that your competitors are offering better content than yours. Therefore, it is always advisable to subscribe to your competitors’ newsletters to stay up to date with them.
– Stay updated and take risks: You need to update your newsletter more or less frequently, as what works today might not work as well a few months from now. 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 anything you find isn’t well-received.
– Find out why people unsubscribe from your newsletter: The best way to tackle a problem is to know what causes it. Therefore, ask your subscribers what led them to unsubscribe from your emails so you can address the root cause.
– Define an email marketing strategy: Sending bulk email marketing campaigns and doing email campaigns correctly is not just about sending emails and waiting for sales to simply increase.
It is necessary to set goals for your mailings, define their frequency, segment your subscribers, have reliable metrics, offer valuable content, etc.
Only with a solid strategy can you achieve your desired KPIs and keep the churn rate in check.