Whether you’re the C-level at a megacorporation or a burgeoning entrepreneur, you need to understand a few tenets of modern commerce to survive. High on the list of essential concepts is “churn,” a term initially used to describe the rolling agitation of dairy products into butter. Obviously, we aren’t discussing butter. Instead, this article concerns mobile app churn – a different kind of rolling agitation concerning customers and loyalty.
What is an “app churn rate,” and why is it important? Importantly, how can your organization reducechurn to foster a loyal, advocative consumer base? This is a beginner’s guide to one of modern commerce’s most significant measurements.
What Is App Churn Rate?
Churn rate was named after the dairy manufacturing process, believe it or not – and the process still serves as a useful analogy. When you churn milk, you rotate the liquid repeatedly, eventually separating the valuable butter solids from the “churned product,” a less-useful whey. Similarly, app churn rate describes the inflow and outflow of users/customers, whereby some customers stick around while others “churn” or abandon your app.
Companies often calculate churn rate within a given time period using the following (simplified) equation: lost customers divided by the total number of customers at the start of a time period, multiplied by 100 to determine a percentage. For instance, if you had 3,000 customers at the beginning of Q1 and lost 2,300 customers, your churn rate would be 76.6%.
Why Is Churn Rate Important?
In a nutshell, app churn rate is a vital flipside of customer/user retention. Take the figure above;you can express a 76.6% churn rate inversely as a 23.4% retention rate. However, expressing the figure in terms of lost potential (rather than realized opportunities) allows you to focus on what needs fixing.
High churn rates (typically over 72%) should provide a catalyst for improvement. They communicate the need for a more intuitive UI, increased app “stickiness,” a more engaging user experience, better customer service, more effective marketing – or a combination of all the above.
Reducing Churn: First Steps
The first step in reducing app churn rate should always be complete self-evaluation. What’s wrong with your app that’s driving away customers beyond a normal statistical baseline?
Team up with an experienced, collaborative custom app development team like The App Labb to determine custom solutions for user retention. Retread the discovery and research processes to analyze your current customer interactions and determine a proper course of action from there. An intuitive app that provides an engaging human experience shouldn’t experience undue churn – so expert app customization is always the best place to start.
Reducing Churn: Next Steps
After building out an intuitive UI that fosters engagement, consider ramping up customer support and marketing. If your user/customer support drags behind competitors’, you want to know about it; consider implementing AI-powered chatbots to stay on top of user support 24/7. Likewise, implement a multi-channel marketing strategy that loops in email, SMS, push notifications, etc., to re-engage users.
Finally, working with a professional app development team, prioritize maintenance. Plug any leaks, fix any bugs that might ward off new and recurring users, and consistently evaluate incoming data for insights, including the direction of your churn rate.
To summarize, churn rate is essentially the volume of users rejecting your app. To keep your company competitive, use churn rate to spur meaningful change by re-evaluating your app strategy, building an engaging product from the ground up.