Does it worth to have the WeChat-CRM at the beginning?
- Kailey
- 2023-04-27
The formula for calculating the customer churn rate is as follows:
Customer Churn Rate = (Number of Customers Lost ÷ Total Number of Customers at the Beginning) × 100%
Here, “Number of Customers Lost” refers to the number of customers who no longer conduct business with your company during a certain period, and “Total Number of Customers at the Beginning” refers to the total number of customers during the same period.
For example, if your company had 1,000 customers at the beginning of a quarter, but at the end of the quarter, 100 customers no longer conducted business with your company, then the customer churn rate would be:
(100 ÷ 1,000) × 100% = 10%
Therefore, in this quarter, your company’s customer churn rate is 10%.
It should be noted that this formula is a basic method for calculating customer churn rate, but in practical applications, it may need to be adjusted and modified according to different business situations and industry characteristics.
How to calculate the customer revenue churn rate?
Customer revenue churn rate refers to the percentage of revenue loss caused by customer churn within a certain period. The formula for calculating customer revenue churn rate is as follows:
Customer Revenue Churn Rate = (Total Revenue Lost from Churned Customers ÷ Total Revenue) × 100%
Here, “Total Revenue Lost from Churned Customers” refers to the total revenue lost from all churned customers during a certain period, and “Total Revenue” refers to the total revenue generated by all customers during the same period.
For example, in a month, your company’s total revenue is $10,000, including revenue from 50 customers. At the end of the month, you found that 5 customers no longer conducted business with your company, and the total revenue lost from these customers is $500. Then, the customer revenue churn rate would be:
(500 ÷ 10,000) × 100% = 5%
Therefore, this month, your company’s customer revenue churn rate is 5%.
It should be noted that customer revenue churn rate can help you better understand the impact of customer churn on company revenue, but it also needs to be analyzed in conjunction with other indicators to better formulate countermeasures.
