📌 Method: MemberChurn
This article explains how we calculate how many members leave the system each month.
How is churn calculated?
Find the number of active members at the start of the month
Find the number of members who canceled their subscription during the month
Calculate churn rate:
Churn rate=(Number of members who leftNumber of members at the start of the month)×100\text{Churn rate} = \left( \frac{\text{Number of members who left}}{\text{Number of members at the start of the month}} \right) \times 100Churn rate=(Number of members at the start of the monthNumber of members who left)×100
Calculate average and median churn rate
We calculate the average churn rate over a given period to identify trends.
Example Calculation
We calculate the churn rate for January, February, and March.
Month | Members (start) | Canceled Members | Churn Rate |
January | 200 | 20 | 10% |
February | 210 | 25 | 11.9% |
March | 215 | 18 | 8.4% |
Calculate the average churn rate:
10+11.9+8.43=10.1%\frac{10 + 11.9 + 8.4}{3} = 10.1\%310+11.9+8.4=10.1%
Calculate the median churn rate (the middle value of the churn rates):
Sorted values: 8.4%, 10%, 11.9%
Median: 10%
Why is this important?
Churn rate shows how many members the company loses each month. A high churn rate indicates:
⚠️ More cancellations than usual
⚠️ A possible need for improvements in the membership experience
💡 Result: An overview of churn rate per month, along with the average churn rate for the period.
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