Churn | Scout Research

Tag Archives: Churn

How to Calculate the Breakeven Point for Digital Subscriptions

In subscription-based business models, maximizing customer lifetime value is understood to be a key success factor to a profitable business. But how do you know at what point a customer relationship turns profitable? While there are obvious differences between customers, it turns out you can calculate your average customer lifetime to reach the breakeven point using your existing operating metrics. So how is this done? Here are the standard operational metrics known by every online service: Customer Acquisition Ratio (CACR) – the sales and marketing costs to sign up a new customer as a ratio to revenue acquired Customer Renewal Cost ratio (CRCR) – the sales and marketing costs of closing a renewal as a ratio to revenue renewed Research [...]

Demand Rating™ in the Real World—Churn

Posted by: Matt Shanahan Another critical use of Demand Rating™ is to better understand and reduce churn—a threat to any subscription business model. A no-churn mentality drives profits and creates a platform for growth. Unfortunately, most organizations don’t have the necessary optics to determine which subscribers have waning loyalty and are at risk of defection. While web analytics tools might deliver standard low usage reports, they can be misleading. Demand Rating enriches web analytics with contract and firmographic data—supplying a normalized metric for comparison—and giving new insight into preventing churn before it happens. Here’s how Demand Rating helps: Which subscribers are at risk? While low usage is never good, often it’s difficult to know what’s low. Take a global financial [...]