Skip to main content

And why are they important?

Customer churn is one of the most important metrics of any business. 

The phrase refers to the overall percentage of customers who have stopped using your product or the number of accounts that have become inactive.

A company’s churn rate is a valuable metric used to measure growth and retention.

We’ll walk you through how to calculate your company’s churn and explain why it matters here.

How Do I Calculate Churn Rate?

There are actually several different ways in which a business can calculate its churn rate. You must choose which way is right for you.

You can calculate your churn rate based on any of the following metrics:

  • The number of total customers lost
  • The value of recurring business lost
  • The percentage of recurring value lost

You will also need to calculate your churn rate based on a specific period of time:

  • Monthly
  • Quarterly
  • Annually

This will help calculate your churn rate over a set duration. Having multiple churn measurements can also help a company notice patterns at specific points during the fiscal year.

Why Is Churn Prediction Important? 

There are numerous reasons why a business wants to know and understand its churn rate. 

  • To budget accordingly

Once a company can identify patterns in churn, it has gained knowledge of when to tighten and loosen the purse strings. 

When the churn rate is on average high, you will allocate for less spending and vice versa. 

  • To measure success

When a business is looking to expand, gain investors, or go public, showing low churn predictions is an excellent metric to have in your arsenal.

This will give others confidence in your business and show that it has the potential not just for retention but more growth. 

  • ID “at-risk” customers

If you have good churn predictions on hand, it will give you a better understanding of trends happening in your business. 

Once you have pinpointed those trends, you can then locate “at-risk” customers who might become churned in the near future. 

This gives you more data to focus on these “at-risk” customers and prepare adequate retention campaigns targeting them. 

Ultimately, churn predictions are key to any business’s success. Once you have defined your data, you can then use your predictions for better business modeling.

Turning Churn into Return

Get in touch with your players directly.  Give them a call on the phone to find out more about their preferences and how you can improve their experience, just for them.   This more personalised approach will win you brownie points for caring and let the individual player know that you value them and you want to tell them!

At Enteractive, we see our Reactivation call campaigns convert 15% upwards of dormant player databases for our operator partners, highlighting that if you give you players a call, you can really make a difference to your revenues.

Find out more about Player Reactivation in our articles section or get in touch with Andrew Foster, Director of our B2B team, andrew.foster@enteractive.se.