📌 Method: LengthOfEngagement
This article explains how we calculate how long a member typically stays in the system and present it as an engagement score.
How is the Engagement Score calculated?
Find lost members
We check how many members canceled their subscription in a given month.
Calculate churn rate:
Churn rate=Number of members who leftNumber of members at the start of the month\text{Churn rate} = \frac{\text{Number of members who left}}{\text{Number of members at the start of the month}}Churn rate=Number of members at the start of the monthNumber of members who left
Calculate engagement score:
Engagement Score=1Churn rate\text{Engagement Score} = \frac{1}{\text{Churn rate}}Engagement Score=Churn rate1
A low churn rate gives a high score, meaning that members stay longer.
A high churn rate gives a low score, meaning that members leave quickly.
Compare over time
The calculation is repeated for multiple months to identify trends.
Example Calculation
We calculate the engagement score for January and February:
Month | Members (start) | Canceled Members | Churn Rate | Engagement Score |
January | 200 | 20 | 10% | 10 |
February | 210 | 30 | 14% | 7.14 |
Calculate churn rate for February:
30210=14%\frac{30}{210} = 14\%21030=14%
Calculate engagement score:
10.14=7.14\frac{1}{0.14} = 7.140.141=7.14
Why is this important?
The engagement score helps businesses understand how long an average member stays in the system.
A high score means strong member retention.
A low score may indicate low satisfaction or poor retention strategies.
💡 Result: A graph showing how well the company retains members.
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