Home References How to calculate churn rate?

Churn rate is the term used for the percentage of customers subscribing to a particular service that discontinue their subscription within a given duration of time. In order to further expand a company’s clientele, it must enhance its growth rate above its current churn analysis.

There’s no particular formula to derive churn rate but to illustrate- if 1 out of every 20 customers paying for an internet connection discontinues their subscription, the resulting churn rate for the internet service provider in question would stand at 5 per cent.

Why is churn rate important?

Churn rate is an essential matrix, especially for the telecom industry. Every service provider outlines their strategy on the basis of their churn rate and thus, decides their policy for the coming quarters.

The churn rate for any service is very closely tracked in the telecommunication industry. A company’s high churn rate statistics imply that it loses a high percentage of its subscribers almost every month. A low churn rate highlights the operator’s capability of retaining subscribers by offering quality services and is thus considered to be the best.

  • Churn rate is a major challenge for an operator as it is an effective medium to measure if its customers are happy with the provided service.
  • It implements the satisfaction index of the existing customers, while at the same time helping the company to find its weak points.

Five ways to minimize churn rates

The loss of customers has a significant impact on service providers, keeping in mind the scale of investments pumped in to acquire customers. Therefore, a variety of metrics have been established, to determine when the customers are about to opt out of the service. It becomes profitable for a service provider to explore the reasons behind the churn and then target the at-risk customers with alluring offers.

Some essential steps for advanced churn management:

  1. Finding out why customers are opting out of the service
  2. Keeping existing subscribers engaged
  3. Use e-mail campaigns to keep customers engaged
  4. Try down-selling to a basic offer if retention seems impossible
  5. Figure out what subscribers consider essential and introduce it


A variety of tactics are used by the companies to maintain their existing customer bases. The most efficient and thus, very popular way of saving customer re-acquiring cost is by providing a good customer service with cloud services like SaaS and increasing retention rates with customer experience management. Providing customers with an easy way to get their queries addressed and issues handled with self-care apps is an all-time key to maintain cellular clients. Offering upgrade without levying any extra charges on the customer’s availed service also works well. Offering discounts often results in the improvement of retention rate for the existing clients. The heavily increased regular usage of convenient mobile applications has made the free access to such applications, a very enticing bonus to reduce churn in cases of most of the subscribers.

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