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Friendly reminder that churn rate isn't a meaningful metric, because churn probability is not constant throughout a customer lifetime: https://medium.com/swlh/y
by lars 7y ago
Friendly reminder that churn rate isn't a meaningful metric, because churn probability is not constant throughout a customer lifetime: https://medium.com/swlh/youre-all-calculating-churn-rates-wrong-cbab072cd992 https://medium.com/swlh/youre-all-calculating-churn-rates-wr...
The churn rate will almost certainly go down on its own as your user base gets older, and consist more of long term customers. What you're usually looking for is to compute average customer lifetime, which is better done without assuming constant churn probability, see the linked post.
- xyzzy_plugh 7y agoDon't folks usually track churn amongst cohorts anyways? Churn rate without any associated facts is almost completely meaningless, as you suggest, other than to elicit concern.
- jrochkind1 7y agoDid the OP?
- jlongster 7y agoI did not, but I was only focusing on the next year anyway. It's just something to take into account losing customers. If I take a pessimistic churn rate and it goes down over time I'll be better off. I haven't read the linked post, will do. I don't think I have nearly enough data to know customer lifetime though. I only have 4 months worth of data.