The importance of measuring the churn rate for your business strategy

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In this context, the churn rate would indicate how many customers canceled that subscription during the last month. This is essential for this type of company, as their business model relies on the consumption of a large customer base.

For example, all alarm bells went off for Netflix in October ebay database 2020 when it was announced that its churn rate had dropped from 2.1% to 3.5% in 30 days.

This meant, when compared to the streaming giant's growth estimates, that in three years only (by adding and subtracting cancellations and new members) would result in a growth of barely 20,000 new subscriptions in the United States.

After analyzing the figures, it was established that the increase in the cancellation rate coincided with an increase in subscription prices and restrictions on the use of shared accounts.

The churn rate is an indicator that can be calculated for any company that has repeat customers and aims to gain new, loyal customers.