What you learn from this is that you should never consider churn and acquisition in isolation, but in the right context. Churn cohorts One way to give context to your churn numbers is to zoom in on cohorts . A cohort is a specific group of customers, in the example below customers Customer Acquisition Rate who joined in a specific month: January 2019, February 2019, et cetera. Each group is then tracked over time. The table shows the situation in August 2019. If we look at the cohort from January 2019, we have now built up 8 months of history. There is no history yet for the cohort of the month of August, only the month of August itself.

Monthly recurring revenue (MRR)

That is why the table ‘runs back’ at an angle. Cohort churn In this example, if we zoom in on the cohort of customers who were recruited in February, you will see that 89% of this group is still left in month 2 (11% churn). The following month, this percentage drops to 85%. By looking at your customer base in this way, you gain insight at a glance what is going on Latvia Phone Number with the quality of your influx of new subscribers. For example, it can be concluded from the table that something seems to be going wrong with the customers who were recruited in the months of May and June.

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Make or break subscription metrics

The customer loss there is in fact much higher than in the previous 4 months. This requires further investigation by the churn specialist. Tip: once you have the correct cohort numbers available, it is very easy to present them in Excel in a heatmap , as I did above. To do this, use conditional formatting -> color scales (conditional formatting and color scale). 4. Value Churn Some churns are more painful than others. Suppose you have 200 customers. One half of the customer base has a ‘basic subscription’ and pays €10 per month. The other half is a ‘premium subscriber’ and pays €25 per month.