In this article I'll quickly and easily tell you what churn is, how it's calculated and how you can reduce it.

Churn is an essential fact in many businesses, and reducing it should always be an objective.

Let's get to the point.

What is Churn

Churn is something simple to understand, but fundamental.

It's the cancellation rate, the people who sign up somewhere and unsubscribe.

It's the percentage of your customers or readers who abandon you each month.

‍The goal will always be to reduce churn, reduce the% of people who unsubscribe from what you offer.

When should you look at this fact

Although churn can apply to many situations, here are 2 examples you should look at:

👉 Your subscriber list

‍If you have a newsletter, for example, the churn reflects the% of people who unsubscribe each month.

👉 Your customers in a membership

‍Recurring payment tool or software.

This is where it matters most, because the more churn the fewer customers, and therefore the less money.

If you offer something with a monthly payment, the fewer people leaving each month, the better. It's not just about bringing in people every month, it's also about losing as few people as possible.

A business that brings in 50 new people a month, but loses only 5, will be better than a business that brings in 100 a month and loses 60.

How is the churn rate calculated

Churn is a percentage. The calculation is very simple.

Basically, you should divide the number of people leaving you by the total number of customers you have.

For example, in a newsletter where you have 10,000 subscribers, if you lose 500 a month, the churn is 5% .500/10,000=0.05*100= 5%

3 quick tricks to reduce churn

How to reduce churn?

I'm going to give you 3 simple tricks so you can start reducing it without complicating yourself or getting into long and difficult projects.

My advice, before getting into the tricks: You should be clear about why people leave.

What causes your customers or subscribers to unsubscribe?

You can know that in many ways, but the easiest way would be to ask directly.

When they unsubscribe, ask them to respond to a 1-question survey, Why did you unsubscribe?‍

I'll show it to you with an example, the one we applied in Generator Landing.

‍At generator landing, we think that customers can unsubscribe for several reasons:

1. They sign up, but they fail to create their First landing. They don't start, and they end up unsubscribing without having done anything.
2. They start, and they create a landing, but they don't know how to drive traffic to it. They don't sell, and they are written off.
3. They start, and they create a landing, to which they drive traffic, but they don't get sales.

Those are the 3 main reasons, because then there are people who create a landing, bring traffic and sell, who don't unsubscribe because it works for them.

‍How do we know what the main reason is?

‍We know with a survey, but also looking at data.

‍We analyze the casualties, and we see which of the 3 previous cases they were in.

How did we decide to lower the churn?

] We have proposed create a solution for each of the above cases.

‍They have been these:

1. When they sign up, we guide them step by step so they can make their first landing. We make it as easy as possible for them to get started.
2. We have created knowledge pills and step-by-step tutorials that anyone can apply, to teach them how to drive traffic to their sales page.
3. We have added tips and tricks for them to write better their texts, to better develop their value propositions and their sales funnel.

In addition, we have complemented everything with individualized services, which help our clients to have better results in all 3 cases.

As a plus, these services are an extra income, which, in addition to lowering churn, makes us earn more per customer.

It increases the customer's LTV, Life Time Value, the money that each customer brings us on average from the moment they start with us until they abandon us.

Therefore, the 3 easy tricks to reduce churn in your business are:

👉 Focus on making life easier for the main ones who are leaving

‍Once you know why people are leaving, focus on finding a solution for the core group.

Something simple, small changes that focus on eliminating the problem they have gone through.

👉 Focus on attracting more customers than they don't leave

‍Imagine that you have a gym, for example.

You'll have different customer profiles.

For example:

• People who want to start getting in shape and weren't exercising until then
• People who go to the gym every day
• People who come 2 or 3 times a week, without much perseverance, but don't stop going in the long term

If you find that 90% of the customers that leave you are in the first group, you have several options.

You could focus on making them not go away.

But you could also decide to focus your gym only on the people that go every day, and do the best you can for them.

‍Focusing on the group of customers that you least like is as good an option as focusing on not leaving those of other groups.

‍👉 Incentive when someone leaves

‍I remember a day when I canceled my subscription to a tool I used, and when I gave it, I got an offer for the next 3 months for the price of 1.

That made me stay 3 or 4 more months.

You can opt for other types of incentives, such as a 30-minute session to help you get more out of the tool, for example.

There are many ways to reduce churn.

What is clear is that It must be one of your focuses, especially if you have a recurring payment business.