Subscription Churn Rate
Definition
Subscription churn rate is the percentage of subscribers who cancel or do not renew their subscriptions during a given time period.
It’s calculated by dividing the number of lost subscribers by the total number of subscribers at the beginning of the period, then multiplying by 100.
Good or Bad?
Good?
Low churn means customers find value in your subscription, and your retention efforts are working.
Bad?
High churn can indicate poor user experience, pricing issues, or a lack of perceived value.
Why does it matter?
Recurring revenue is the backbone of any subscription-based business.
A high churn rate drains potential profits and increases the cost of acquiring new subscribers just to stay even.
Common Mistakes
- Ignoring reasons for cancellations
- Not offering flexible subscription options
- Failing to engage users after signup
- Making it difficult to pause instead of cancel
- Using a one-size-fits-all communication approach
How to Improve It?
- Offer discounts for long-term plans
- Gather and act on cancellation feedback
- Use automated email reminders before renewals
- Provide added value like exclusive content or perks
- Let users pause subscriptions instead of canceling
Recommended Plugin
WooCommerce Subscriptions allows you to introduce a variety of subscriptions for physical or virtual products and services.
Real-World Example
You start the month with 1,000 active subscribers and lose 80 by the end.
Your churn rate is 8 percent.
After introducing mid-tier plans and automated renewal reminders, you reduce churn to 4 percent the next month.
Related Terms
- Customer Lifetime Value
- Retention Rate
- Monthly Recurring Revenue
- Cancellation Feedback
FAQs
What is a healthy subscription churn rate?
It depends on your industry, but rates under 5 percent are often considered stable.
Is it better to focus on getting new subscribers or reducing churn?
Reducing churn is usually more cost-effective and leads to long-term growth.
How can WooCommerce store owners track churn automatically?
Plugins like WooCommerce Subscriptions can provide churn data and automate engagement to help improve retention.
