Comparison of churn rates
Posted on | May 14, 2007 | Comments Off
One of the most closely guarded secrets in business seems to be the churn rate. This is the rate of attrition, over a period of time, that subscriber-based customers “churn out” (unsubscribe) of the customer base. Churn rates are often measured in monthly terms, especially in the cable and satellite television and the wireless telephone industries. Business analysts will often look at the churn rate on a quarterly basis. Likewise, an annual rate of churn is a commonly used measure.
Recently, I got to searching the Internet for a comprehensive list of churn rates, if such a thing existed. A churn rate table, across industries. But alas, nobody seems to have compiled a database measuring the percent of customers who churn out of various companies, across sectors. So, I had no choice but to create such a table.
If you try to discover reported churn rates, the first thing you’ll notice is that companies will use various time periods as the basis. Monthly, quarterly, annually. I even found one study of lawyer retention rates that spanned a four-year period. So, to try to make this an apples to apples comparison, I converted all of the churn rates I found to “per year” terms. Note, however, if a company reported a 2% monthly churn rate, I did not say that equates to a 24% annual rate (2% times twelve months). Rather, I calculated a sliding count, such that in the first month, 100 customers would dwindle to 98. But in the second month, the 98 customers would decrease to only 96.04 customers (98 minus 2% of 98).
The table below expresses 67 different churn rates at different companies in different industries at different times. As I discover more churn rates in my travels, I will update my spreadsheet and occasionally edit this chart. I’m quite certain that I will get feedback in the Comments section, pointing out the perceived errors in my table, or suggesting new data points worthy of adding. I look forward to that! For verification, I have placed a link at the bottom of the table, showing the source material for this table. It would be fantastic if this post became the Internet’s number-one repository of publicly available churn rates.
Since I’ve put in some backbreaking coding work creating this table, I would at least appreciate that if you use it and get value out of it, please return a favor by subscribing to my blog via FeedBlitz. Just type your e-mail address into that form over there, on the right. That way, you’ll be updated when I have something new to report.
And now, without further ado, Inside Market Research presents the…
BIG LIST OF CHURN RATES
Annual Churn Company Industry Data Year Country
1.0% Cox (triple-play customers) Cable TV 2002 US
4.0% C I Host Web Hosting 2003 US
4.0% Earthlink Internet Service 1999 US
4.5% Greenberg Traurig (lawyers) Legal 2003 US
4.6% Reed Smith (lawyers) Legal 2003 US
4.6% Sonnenschein (lawyers) Legal 2003 US
4.9% Local Telecom 2000 US
5.0% Piper Rudnick (lawyers) Legal 2006 US
5.3% Baker & McKenzie (lawyers) Legal 2005 US
5.7% Local Telecom 2002 US
6.0% Sirius Satellite Radio 2005 US
6.0% Wireless 2002 US
6.1% Local Telecom 2001 US
6.3% Holland & Knight (lawyers) Legal 2004 US
6.4% White & Case (lawyers) Legal 2003 US
6.5% McGuire Woods (lawyers) Legal 2003 US
6.6% Sirius Satellite Radio 2004 US
7.0% Morgan, Lewis (lawyers) Legal 2003 US
7.2% Sirius Satellite Radio 2006 US
7.5% Nextel Wireless 2001 US
7.9% Howrey (lawyers) Legal 2003 US
8.0% Triton PCS Wireless 2001 US
8.0% U.S. Cellular Wireless 2001 US
9.0% Wireless 2001 US
9.6% Duane Morris (lawyers) Legal 2003 US
9.6% Wireless 2000 US
10.0% Web Hosting 2003 US
10.0% Western Wireless Wireless 2001 US
10.3% Akin Group (lawyers) Legal 2003 US
11.0% Alamosa PCS Wireless 2001 US
14.0% Virgin Mobile Wireless 2005 GB
15.0% Nascar.com (premium subs.) Sports Media 2004 US
16.0% Nextel Wireless 2005 US
17.0% Colorado teachers Education 2004 US
17.0% Schnader Harrison (lawyers) Legal 2003 US
17.0% DBS TV 2002 US
17.2% Vodaphone Wireless 2005 IT
18.0% DirecTV DBS TV 2003 US
18.3% Vodaphone Wireless 2005 DE
19.0% Alltel Wireless 2005 US
20.0% Hutchison Telecommunications Wireless 2005 IN
20.0% Wireless 2001 AU
21.9% Vodaphone Wireless 2005 ES
22.0% Analog cable subscribers Cable TV 2002 US
23.0% Cingular Wireless 2005 US
23.0% Sprint Wireless 2005 US
23.0% Colorado teachers Education 2004 US
25.0% Wireless 2005 GB
26.0% Sprint Wireless 2005 US
26.0% Subscribers Cable TV 2002 US
29.7% Vodaphone Wireless 2005 GB
30.0% LD Telecom 2002 US
31.0% Globe Prepaid Wireless 2003 PH
31.0% Pagers 1998 US
34.8% T-Mobile Wireless 2005 GB
35.0% Maricopa County (anglers) Recreation 2002 US
36.0% Las Americas – Cable California Cable TV 2002 MX
37.0% E-mail addresses 2003 US
45.0% E-mail addresses 2004 US
46.0% Prepaid Calling Cards 2004 US
46.0% Digital cable subscribers Cable TV 2002 US
51.0% Globe Prepaid Wireless 2004 PH
52.0% Florence (AL) Times Daily (readers) Newspapers 2005 US
58.0% Snowball.com E-mail newsletter 2000 US
78.0% Touch Mobile Prepaid Wireless 2004 PH
93.0% VOOM HD TV 2004 US
93.0% Runoff at time of sale Home Mortgage 2002 US
For more information visit Gregory Kohs Blog, Insider Market Research, the guy who did this incredible job.
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