Why is churn modeling so important in this day and age?

Everyone knows customer retention is good. Predictive analytics and modeling techniques make it easier to identify your high-risk customers. 

Without these kinds of metrics and forecasts, it is difficult to prevent clients from leaving. Fortunately, you can create a churn model and plan how you’re going to cope with these drop out rates.

We’ve also got an excellent article on how to model the relationship between your price and the churn rates. Definitely check it out!

Baremetrics makes it easy to stay on top of the data sets with their free trial. Use Baremetrics to pull the metrics you need for your modeling.

The Metrics You Need To Watch

There are a few metrics you need to consider as you create your churn model. Each of these will help you create a plan of attack so you can determine how to go about keeping those customers on board. 

First, you need to know how many customers are leaving each month. If you have a churn rate of 20%, for example, your business is in trouble.

A churn rate of 5-6% is quite respectable, though lower is always the end goal. Just take a look at what Nudge Coach did with their churn!

Companies lose over $1.5 trillion every year due to customer churn. If you can reduce your churn rate, you’ll be saving a lot of money. 

These data points indicate how vital it is to fully understand your churn and to come up with a strategy of slowing your dropout rate. 

How to Reduce Churn

Once you have a clear idea of how many people leave your company in a given period, you can fix the problem.

At Baremetrics companies find out just what they are missing and then they solve the problem without spending too much time and energy on it.

You now have the data sets to compare metrics as you make changes. From there, you’ll be able to determine exactly what is necessary for the next step.

• Surveys: A survey can help find out why people leave. While you can do written surveys, the most effective method is to just call a client and ask them their reason for leaving. If you notice there are a lot of people responding with the same issue, it’s time to address it.

• Emails: Stay in touch with your clients while they’re with you and encourage them to contact you with their needs. Email marketing is quite effective at reaching people, allowing them to send an email back or follow a link to give you feedback on your services or products.

• Education: If your customer base doesn’t know what to do with your service, or why they should continue using them, they’ll walk away. Often, all that’s needed is a little more education. Give your demographic ideas on how to use your products and ensure they know how to get the most out of them.

• Watch: When you have the datasets for the churn rate in your industry, you can begin to look for those who are walking away. What do they have in common? What made them leave? From there, it’s possible to identify others who are at risk of leaving and you can take steps to prevent that.

Staying on top of the number of customers you bring in and retaining them is a big part of managing your business. Sign up for Baremetrics and let us help.

Baremetrics: Helping You Lower Churn Rates with Great Data

Baremetrics has had great success in identifying why customers are leaving, making it possible to measure and track not only churn, but also growth. 

With this information, you can create a churn prediction model and work from that. 

This way when you look at logical regression and the usual churners, you can then come up with a plan to keep your subscribers and reduce churn risk.

What’s Next?

Now that you’re aware of why churn modeling guides are so important, it’s time to get on top of it before it’s too late.

Let Baremetrics help you figure out where your customers are vanishing from. Schedule a free demo today to find out exactly how it all works and get the best for your business.