Churn rate is the number of subscribers who cancel or don’t renew a subscription. It is the opposite of retention rate which is the percentage of customers a business retains over a given period of time. Churn is calculated by dividing the number of leaving customers to the total number of customers.
Churn is like cancer and will kill your business if you don’t control it and to control it we must first understand it. In the AppStore world, Churn is broadly divided into two main categories: Voluntary Churn and Involuntary Churn.
Voluntary Churn happens when your users “decide” one way or another to leave your app. Since it is a conscious decision, it might be more difficult to handle but there are several ways to tackle Voluntary Churn by analyzing its intensity and other properties.
Please click to learn more about Voluntary Churn and how to handle it.
Involuntary Churn is a result of payment method failure. If Apple can’t process the subscription payment in a period, it flags the user’s status as “Billing Retry” and tries to process the payment for the next 60 days. If still unsuccessful after 60 days, Apple stops trying and considers the user lost. This type of churn is called Involuntary Churn.
Please click to learn more about Involuntary Churn and how to handle it.
It is also important to introduce the notion of cohorts while talking about churn: A cohort is a group of people with a shared characteristic. In the subscription business this is usually a date or a period relating to an action such as the subscription or the launch of an introductory period.
It is very insightful to track a group of people that subscribed at the same date (or same period of time) and analyze their behavior. How many of them never renewed their subscription, how many of them renewed once, twice or more.
Even though we show a snapshot view of your churn in the dashboard, most of the insights we create are based on cohort analysis.