Explore the data
Is your churn rate within a healthy range?
Churn is a fact of life for any subscription business, and slight fluctuations in churn can make a significant impact to the bottom line.
Comparative data by industry, audience, and price point helps gauge the health of your business. Recurly has compiled comprehensive data on churn, based on a sample of over 1,500 sites over 12 months, to provide benchmarks.
How Does Your Churn Rate Compare?
Your churn rate is a critical indicator of the health of your subscription businesses.
Monitor this rate closely for any unusual changes which could indicate a problem or issue.
Overall Churn Rate
Churn rates vary widely, and minimizing churn is key to growth and long-term success of a subscription business.
B2B
5.00%
B2C
7.05%
B2B vs. B2C
B2C companies experience higher churn than B2B. B2B purchase processes can be complex, resulting in a more considered purchase.
Voluntary
4.21%
Involuntary
1.39%
Voluntary vs. Involuntary
Voluntary churn indicates customer dissatisfaction, while involuntary churn points to payment issues.
Minimizing Voluntary vs. Involuntary Churn
Different factors lead to different kinds of churn—each requiring a specific approach. Improving customer satisfaction reduces cancellations that result in voluntary churn, while using decline management techniques minimizes payment declines that lead to involuntary churn.
We found that 65% of sites experienced decreases in their overall churn rate compared to the previous year. Reductions in involuntary churn were the primary reason for overall churn rate decreases in 78% of those sites. We attribute this to new retry models Recurly introduced in 2018 to strengthen our decline management technology.
Increases in voluntary churn were the primary reason for growth in the overall churn rate for the other 35% of sites in this update. Subscription businesses must be sure to address both types of churn in order to effectively reduce their overall churn rate.
Churn Rate by Industry
Different industries have different factors that affect churn. Understanding these factors helps subscription businesses formulate effective strategies to combat churn.
All Industries
Median
Churn Rates
Median
Voluntary Churn
All
-%
B2B
-%
B2C
-%
Involuntary Churn
All
1.89%
B2B
1.39%
B2C
2.16%
Key Insight
Churn tends to be seasonal, mirroring the school year
B2C companies tend to experience wider variances in churn rates particularly at higher price points.
Churn Rates by Average Revenue Per Customer (ARPC)
Price has a definite effect on churn. Higher-priced subscriptions experience less churn, possibly because the purchase is more considered. Subscribers both sign up and cancel more readily in categories with lower price points.
All Cohorts
Median
Churn Rates
Median
Voluntary Churn
All
-%
B2B
-%
B2C
-%
Involuntary Churn
All
1.89%
B2B
1.39%
B2C
2.16%
Understanding the different factors that drive churn is the first step, taking action is the next.
Methodology
Study examined a sample of over 1,500 subscription sites processing subscription billing on the Recurly platform.
The study period ran over a period of 12 months (January – December 2018).
Transaction data was aggregated and anonymized; no personally-identifiable data was used in the study.
Churn rates are monthly, calculated by dividing the number of subscribers who churn during the month by the number of subscribers at the beginning of the month.
Study uses median, 25th, and 75th percentile values which eliminate outliers and provide a more accurate representation of the data.
The involuntary churn number excludes sites that may choose to leave a subscription active despite declined payments.
