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Monthly Subscription Churn Rate

What is Monthly Subscription Churn Rate:

Monthly Subscription Churn Rate can be straightforward concept: the churn rate is the percentage of your subscriptions that cancel their ongoing orders over a month.

For an eCommerce company, subscription churn should be defined in two ways:

1) The moment the subscription ends and renewal isn’t completed (involuntary churn).

2) The moment of the subscription cancelation (voluntary churn).

The data for this metric can be discovered in eCommerce subscription or finance tools such as Stripe.

How to calculate Monthly Subscription Churn Rate:

Monthly Subscription Churn Rate can be simply calculated by taking the number of subscription churns in a select month then dividing by the number of subscriptions at the beginning of select month. After finding this number times by one-hundred to find the final percentage.

An example of this metric:

(7 subscription churns) / (100 starting subscriptions) x 100 = 7% Monthly Subscription Churn Rate

Notes

- Involuntary and voluntary churn can be tracked separately, but your team will need to have a custom definition on what distinguishes a churn.

- In Yaguara Monthly Subscription Churn Rate can be tracked when creating a Key Result:


Why Monthly Subscription Churn Rate is Important:

Churn is a necessary evil for any eCommerce business that is subscription-based or has a subscription offering, so not getting a handle on churn can make a significant impact to the bottom line.

By defining this metric you can actively combat this rate with instead of watching the slow, unpredictable death of your hard-earned customers. And when you consider all the marketing costs to acquire said customer, it amounts to a terrible waste of time, money, and energy.

It’s also important to find root causes of your churn. Voluntary churn shows there could be customer dissatisfaction, and involuntary churn points to payment or operations flaws. So digging deep into wild success or major red flags of your Monthly Subscription Churn Rate are vital.

How to improve Monthly Subscription Churn Rate:

Time to make things personal

Special inserts, handwritten notes, personalized welcomes via marketing technology, lifetime journey highlights. All these are ways to make your interaction more personal and show the human care at the other end of the transaction.

VIP Status

eCommerce companies tend to experience wider variances in churn rates at higher price points. So if you are in the upper tier, try implementing additional storytelling so they can get a behind the scenes look into the purpose behind your business.

Cohorts

Slicing your referral sources and product categories by subscription churn will tell much more of a story of where loyalty lies rather than looking at a top-down sum.

Additional Subscription Support

Provide an elite helpdesk, such as Gorgias or Zendesk, for an effective churn prevention strategy. Make sure to customize this support process from the main ticket funnel.

Trusted Advice on Monthly Subscription Churn Rate:

34 Ways to Market Your Subscription Boxes via Urban Tastebud

Churn Rate Benchmarks via Recurly

How to Effectively Personalize the Subscription Experience via Zaius