If you use Recharge to manage subscription payments and have your Recharge account integrated with Polar Analytics, you can easily leverage Custom Metrics to quickly calculate both your churn and retention rates of your subscription customers.
Why should I track churn and retention rates?
Before we detail how you can create this analysis, let's clarify why it's important to track both churn and retention rates for subsets of your customers.
Churn and retention rates provide your business with a comprehensive view of customer behavior over time. Churn rate highlights the percentage of customers lost in a given time frame, pinpointing potential issues or weaknesses in your product or service. On the other hand, your retention rate measures the percentage of customers retained, revealing the effectiveness of retention strategies and overall customer satisfaction. By analyzing both metrics together, you can assess the effectiveness of your customer retention strategies and make data-driven decisions to minimize churn, increase customer loyalty, and ultimately drive long-term profitability.
How-To: Track Churn Rate from Recharge Subscriptions
Step 1. Launch the Custom Metric builder, either via the Custom Report "+" or within Key Indicators.
Step 2. Duplicate the setup below in your Custom Metric.
The formula for Churn Rate is Churned Customers / Total Customers.
Step 3. Format this metric as a percentage.
Select "Formatting" on the righthand side of the screen, and select "Percent". You can also add a description here to detail what this metric calculates.
Step 4. Pull this metric into a Custom Report.
We recommend visualizing this report as a chart, so that you can easily track churn rates over time and identify periods of peak performance.
How-To: Track Retention Rate from Recharge Subscriptions
Step 1. Launch the Custom Metric builder, either via the Custom Report "+" or within Key Indicators.
Step 2. Duplicate the setup below in your Custom Metric.
The formula for Retention Rate is 1 - (Churned Customers / Total Customers).
Step 3. Format this metric as a percentage.
Select "Formatting" on the righthand side of the screen, and select "Percent". You can also add a description here to detail what this metric calculates.
Step 4. Pull this metric into a Custom Report.
We recommend visualizing this report as a chart, so that you can easily track retention rates over time and identify periods of peak performance.
Analyzing Churn and Retention Rates
The Custom Report examples below give you an idea of how you could track both of these metrics side by side. Keep in mind that you can also leverage the Retention tab in order to gain deeper insight into your Customer Lifetime Value, cohorts, and retention analysis.
This table enables you to track churn rate and retention rate side by side, using daily granularity. This approach is best if you'd like to identify churn or retention rates for a specific date or time period in order to gauge performance.
This graph (which is the same Custom Report as above, but visualized as a Chart), enables you to track churn and retention rates over time, using the granularity of your choosing. This approach is best if you'd like to clearly visualize changes in both metrics over a period of time.
