Churn Rate is the percentage of customers who cancel their subscriptions over a set period of time. Understanding your store’s Churn Rate can provide you with valuable insights into customer satisfaction, and is a helpful metric when planning for future growth.

Access the Churn Rate metric

Recharge provides two Churn Rates so you can better understand your customers' behaviors:

• Subscribers: The total number of subscribers who churned during the reporting period. A subscriber is considered to have churned when they have no remaining active subscriptions.
• Subscriptions: The total number of subscriptions that churned during the reporting period. A subscription is considered to have churned when it is no longer active.

The churn rate dynamically corresponds to the date range set within the filter. For example, if you entered the date range of October - December 2022, the Churn Rate metric provided is a quarterly churn rate, representing the percentage of customers who ended their subscriptions in that quarter.

Alternatively, if you enter the date range of October 2022, the Churn Rate metric would be a monthly churn rate, representing the percentage of customers who ended their subscriptions that month.

The Churn Rate is accessible in multiple places throughout the Recharge merchant portal:

• Home analytics: View the subscriber and subscription Churn Rates when you log into the Recharge merchant portal.
• Customer churn dashboard: View the Churn Rate at a subscriber level, plus additional subscriber-related churn metrics.
• Subscription churn dashboard: View the Churn Rate at a subscription level, plus additional subscription-related churn metrics.

Home analytics

You can access both the Subscriber and Subscription Churn Rates from the Home Analytics:

1. Open the Recharge merchant portal.
2. Scroll down the Home Analytics page to the Churn section of the dashboard.
3. Toggle between Subscribers and Subscriptions to view the Churn Rate per Subscribers or Subscriptions.

Customer churn dashboard

Review the Customer churn dashboard to view data on the Subscriber Churn Rate: 

1. Select Analytics in your merchant portal.
2. Select Dashboards and then Customers.
3. Open the Customer churn dashboard.
4. Set the time period for the data using the Filters option. Once you’ve selected the correct timeframe, press Run (or the reload icon) to pull the relevant data.

Subscription churn dashboard

Review the Customer churn dashboard to view data on the Subscription Churn Rate: 

1. Select Analytics in your merchant portal.
2. Select Dashboards and then Subscriptions.
3. Open the Subscription churn dashboard.
4. Set the time period for the data using the Filters option. Once you’ve selected the correct timeframe, press Run (or the reload icon) to pull the relevant data.

Understand how the Churn Rate metric is calculated

Recharge gathers the following information before calculating the churn rate:

• The total number of days in the specified period.
  • • This is specified using the filter function in the Revenue Trends dashboard.
• The sum of all daily churned customers for the specified period.
  • • A customer is considered churned the day after the subscription is cancelled or expired. For example, if a customer cancelled their subscription on April 1st, 2022 they would be considered to have churned on April 2, 2022.
• The sum of all daily total active customers for the specified time period.
  • • Since customer churn is identified the day after the customer’s subscription is cancelled, the number of daily customers is the total number of customers who were active on the previous day.

We then take those three values to calculate the churn rate using this formula:

This provides us with a churn rate that accurately reflects the percentage of customers that churned in a given time period.

Benefits of calculating churn with this formula

• With this formula, we are looking at the number of customers each day in the period, instead of only the number of new customers, so that the churn rate represents the entire growth of the business.
• Using historical data tracking, the total active customer count in the churn rate calculation is a sum of the total active customers at the beginning of each day in the time period. This normalizes your data so that it can be used to better assess your business’s growth and you can see a more robust churn rate, especially when looking across longer timeframes.
• If we were to calculate the total active customer count for the beginning, middle, or end of the timeframe, new customers may be missed. With this calculation, new customers are successfully accounted for.
• We also realize that the churn rate should not be directly influenced by the new customer count, as it can artificially inflate your data. Instead, our calculation looks at each day specifically in the time period to better account for new customer growth.
• This model allows you to compare your churn rate percentages so that you can predict the probability of future churn. With this method, you can confidently rely on the churn rate percentage as an accurate forecasting tool.

Churned customers

A customer is considered churned when their customer status is inactive. The customer status may be inactive because the customer:

• Actively churn: Either you or the customer cancelled the subscription, or the subscription expired after a set number of charges
• Passively churn: The customer's order had an error, and 

Customers are considered churned the day after their last active subscription is canceled. For calculation purposes, churn is recorded on the first full day of inactivity. For instance, if a customer cancels on July 5th at 11:00 am, they are recorded as churned in our database on July 6th.

Considerations

Consider the following when reviewing the Churn Rate metric: