The customer churn rate in a subscription-based ISP business is a measure of the number of subscribers/customers that cancel their services over a specified period of time, e.g. a monthly churn rate of 10% means that, on average, customers will retain their services for around 10 months before cancelling. Another example is an annual churn rate of 50% where a customer cancels on average every 2 years, etc.
Losing customers is as natural to business as gaining them. ‘Customer Churn’ is a measurement of your customer gain-to-loss ratio. Low churn indicates a well performing business in a stable environment, whilst high churn can be a sign of bigger business or environmental challenges.
A certain amount of natural customer churn is to be expected as people grow, change preferences or pass-away. And a business might experience a relatively high rate of churn that is standard for their product or industry.
It’s the rate of ‘un-natural’ churn that you need to monitor closely. This is when your numbers creep above what YOU deem to be regular or acceptable.
A higher than average churn rate can be a result of a number of factors - here’s our list of the top 4 things to keep in mind if you notice any significant changes in your customer base.