What is a churn rate?

Churn refers to the users' action to stop using a particular app over a specific period of time. Thus, churn rate can be used as a metric that measures the number of users that stopped using an app over a specific period of time and is expressed as a percentage of the total number of mobile app users.

Why is churn rate important?

Measuring churn rate is important for marketers because it helps them understand how well their products or services retain customers over time. A high churn rate can indicate that there may be some problems with the app that are causing customers to leave, such as poor performance, lack of features, or inadequate customer support. In contrast, a low churn rate can be an indicator of a positive sign, as it suggests that the app is successful in retaining its user base. By understanding the reasons for churn, marketers can identify opportunities to improve their products or services and make changes that will help reduce churn and increase customer retention. Additionally, measuring churn rate can help marketers understand the lifetime value of their customers, which can be used to inform marketing strategies and budget decisions. Overall, tracking and analyzing churn rates is an essential aspect of customer relationship management and can help marketers make more informed decisions about retaining and growing their customer base.

How to calculate churn rate

To calculate the app’s churn rate, you can follow the same process.

1. Identify the total number of users at the beginning of the period being analyzed.
2. Identify the number of users who stopped using the app during that time frame.
3. Calculate the churn rate by dividing the total number of users who left by the total number of users at the beginning of the period. Then multiply by 100 to express the result as a percentage. The formula is as below:

Churn rate = (Number of users who left by the end of the period / Number of total users at the beginning of the period) x 100

For example, if an app had 1,000 users at the beginning of the month and 100 of those users stopped using the app during that month, the churn rate would be (100/1,000) x 100 = 10%.

When calculating churn rates, it is important to consider the time frame you use. This is because the churn rate for an app may vary depending on the length of the time period being analyzed. You should also make sure that you properly define what "stopped using the app" means in the metric. For example, it could vary from the user uninstalling the app to the user canceling a paying subscription.

‍