📌 Method: LengthOfEngagement
This article explains how we calculate how long a member typically stays in the system and presents it as an engagement score.
How is engagement score calculated?
Find Lost Members
We see how many members canceled their subscription in a given month.
Churn rate calculation:
Churn-rate=Number of members who leftNumber of members at the beginning of the month\text{Churn-rate} = \frac{\text{Number of members who left}}{\text{Number of members at the beginning of the month}}Churn-rate=Number of members at the beginning of the monthNumber of members who left
Calculating the 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, which means that members stay longer.
A high churn rate gives a low score, which means that members leave quickly.
Compare over time
The calculation is repeated for several months to find trends.
Example calculation
We calculate engagement scores for January and February:
Month | Number of members (start) | Terminated 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?
Engagement score helps companies understand how long an average member stays in the system.
A high score means strong member retention
A low score can indicate low satisfaction or poor retention strategies
💡 Result: A graph that shows how well the company retains members.
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