Friday, June 09, 2006


Comparison of churn rates

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 ChurnCompanyIndustryData YearCountry
1.0%Cox (triple-play customers)Cable TV2002US
4.0%C I HostWeb Hosting2003US
4.0%EarthlinkInternet Service1999US
4.5%Greenberg Traurig (lawyers)Legal2003US
4.6%Reed Smith (lawyers)Legal2003US
4.6%Sonnenschein (lawyers)Legal2003US
4.9%Local Telecom2000US
5.0%Piper Rudnick (lawyers)Legal2006US
5.3%Baker & McKenzie (lawyers)Legal2005US
5.7%Local Telecom2002US
6.0%SiriusSatellite Radio2005US
6.0%Wireless2002US
6.1%Local Telecom2001US
6.3%Holland & Knight (lawyers)Legal2004US
6.4%White & Case (lawyers)Legal2003US
6.5%McGuire Woods (lawyers)Legal2003US
6.6%SiriusSatellite Radio2004US
7.0%Morgan, Lewis (lawyers)Legal2003US
7.2%SiriusSatellite Radio2006US
7.5%NextelWireless2001US
7.9%Howrey (lawyers)Legal2003US
8.0%Triton PCSWireless2001US
8.0%U.S. CellularWireless2001US
9.0%Wireless2001US
9.6%Duane Morris (lawyers)Legal2003US
9.6%Wireless2000US
10.0%Web Hosting2003US
10.0%Western WirelessWireless2001US
10.3%Akin Group (lawyers)Legal2003US
11.0%Alamosa PCSWireless2001US
14.0%Virgin MobileWireless2005GB
15.0%Nascar.com (premium subscribers)Sports Media2004US
16.0%NextelWireless2005US
17.0%Colorado teachers in 'excellent' schoolsEducation2004US
17.0%Schnader Harrison (lawyers)Legal2003US
17.0%DBS TV2002US
17.2%VodaphoneWireless2005IT
18.0%DirecTVDBS TV2003US
18.3%VodaphoneWireless2005DE
19.0%AlltelWireless2005US
20.0%Hutchison TelecommunicationsWireless2005IN
20.0%Wireless2001AU
21.9%VodaphoneWireless2005ES
22.0%Analog cable subscribersCable TV2002US
23.0%CingularWireless2005US
23.0%SprintWireless2005US
23.0%Colorado teachers in 'unsatisfactory' schoolsEducation2004US
25.0%Wireless2005GB
26.0%SprintWireless2005US
26.0%SubscribersCable TV2002US
29.7%VodaphoneWireless2005GB
30.0%LD Telecom2002US
31.0%GlobePrepaid Wireless2003PH
31.0%Pagers1998US
34.8%T-MobileWireless2005GB
35.0%Maricopa County (anglers)Recreation2002US
36.0%Las Americas - Cable CaliforniaCable TV2002MX
37.0%E-mail addresses2003US
45.0%E-mail addresses2004US
46.0%Prepaid Calling Cards2004US
46.0%Digital cable subscribersCable TV2002US
51.0%GlobePrepaid Wireless2004PH
52.0%Florence (AL) Times Daily (readers)Newspapers2005US
58.0%Snowball.comE-mail newsletter2000US
78.0%Touch MobilePrepaid Wireless2004PH
93.0%VOOMHD TV2004US
93.0%Runoff at time of saleHome Mortgage2002US


Source material link:
http://tinyurl.com/churn-rates


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25 Comments:

At 5:53 PM, June 09, 2006, Anonymous Fara said...

Well done!

That is a pretty nasty chore and I am glad someone did it. Some of the rates surprised me. Thanks for posting where you got the original information.

 
At 12:13 PM, June 12, 2006, Blogger Gregory Kohs said...

Thank you for the supportive comment, Fara. While this was a bit of a chore, I look forward to other visitors updating me with either corrected or newfound data points.

 
At 4:29 AM, June 23, 2006, Blogger heart5 said...

I don\'t think the rate above 50% would be believeable.The company should collaspe if so many customer churn.

btw,sorry for my poor spelling.

 
At 9:45 AM, June 23, 2006, Blogger Gregory Kohs said...

I agree, Heart5 -- that was astounding to me. But, those were the actual numbers (sometimes extrapolated from a monthly rate). I think many of those businesses were not "thriving", and merely had marketing programs that were constantly addressing new customer acquisition and "win back" of lost customers.

 
At 8:11 AM, July 10, 2006, Anonymous Al the Pedant said...

I dont think you can compare a monthly churn annualised with an annual churn. Your example of a monthly churn of 2% looks right. But an annual churn will be expressed as the % of current subscribers who will not be subscribers in 1 years time. It does not include new subscribers who sign up and depart again within the coming year (and most services have a large very volatile short term churn rate).

Typically annual churns are for weasels.

 
At 4:22 PM, August 24, 2006, Anonymous Anonymous said...

This is a really great start. I love the idea behind creating this resource and am very happy that you've taken it on. I'd like to see it improved in the following ways, if you could:

- monthly AND annual churn rates
- explanation of various methods on how to annualize monthly figures, with better justification for your particular choice.

Again, this is an awesome resource. Thank you!

 
At 1:10 AM, March 29, 2007, Anonymous David Peters said...

Mate, awesome job. I run a software company that works with telecommunications companies to reduce churn in Asia, Europe and Africa. We get a lot of this data under Non-disclosure - so it was great to fund a "publically available" list.

In my experience you will find this information buried in the Annual reports of the listed telco's also.

Best Regards
David P

 
At 2:14 PM, May 09, 2007, Anonymous Juan Damia said...

Thanks Greg, this is a great start I hope we count with an update of this information. Which sources have you taken for this analysis? Thanks again!

 
At 12:38 PM, January 30, 2008, Blogger AlliSea said...

Fantastic summary of the data - really appreciate your labor on this.

Regarding the 50% number, I can attest to the validity of this number. For certain online, technical service providers this is on the high end but not an outlandish number. Further, you are correct - when a company has a churn rate of this magnitude, a huge effort goes into customer acquisition and winback programs.

 
At 9:52 AM, January 23, 2009, Anonymous Anonymous said...

This is great. What are the blank spots where there are no company names? For example, righ under Sirius there are a few blank spots for names?

 
At 11:07 AM, January 23, 2009, Blogger Gregory Kohs said...

The blank spots represent data which I had obtained that referred to "an industry average", in general. Not a specific company.

I'm glad that you found value in this page, especially considering how old is this data now!

 
At 9:20 PM, June 12, 2009, Anonymous niko ---- thenerdproject at gmail said...

excellent work!

let me ask you your opinion since you are now a churning expert :-)

what sort of practices would you recommend for companies who want to and have the ability to introduce monthly subscriptions to end-customers delivering online content? the customers sign yearly contracts and are bounded by an initiation fee and A cancellation fees if they cancel the contract. they pay a monthly fee for the online content.

any best practices that you've uncovered?

 
At 10:30 PM, June 12, 2009, Blogger Gregory Kohs said...

Niko, I'm not an expert at this, but I appreciate the butter-up.

Two ideas that I've seen work. If you've already got customers willing to engage, even with an early termination penalty, that's more than half the battle right there. But, to take it even further.

(1) Give an incremental discount to your tenured customers re-upping for another year. Keep piling on the discounts every year. Sure, by the end of three or four years, they may be paying 10%, 20%, 30%, or even 40% less than "new" customers. But that's smart. It costs anywhere from 3x to 10x more to find, market, and capture a new customer than to retain an existing customer. So keep those repeat customers happy in the knowledge that they're paying LESS than your new subscribers.

(2) Swag. Make your existing subscribers feel valued with an occasional special "thank you" gift, above and beyond their normal deliverables. This could be a free white paper, or a prize contest, or just a Starbucks gift card in the mail.

And, of course... never, ever drop the ball on continuous good product and service, month after month.

 
At 6:25 AM, June 26, 2009, Anonymous Rocky said...

Wow, well done, what a nice an7 informative blog. I am very thankful to you. It helps a lots of people in the whole world. Great.... keep it up!!!!!!

 
At 4:27 PM, September 03, 2009, Anonymous Anonymous said...

This is really useful. Did you find any information about factors causing the churn? Unhappiness with the service? Got a better deal elsewhere? Other factors?
SG

 
At 11:23 AM, September 16, 2009, Blogger Gregory Kohs said...

There's a bit of a flurry of debate on Wikipedia, over whether or not to include an external link to this blog post (now cited in a scholarly journal!) from Wikipedia's article about "Churn rate".

Join the fun!

http://en.wikipedia.org/wiki/Talk:Churn_rate#Database_of_churn_rates

 
At 4:35 AM, December 03, 2009, Anonymous Anonymous said...

Hi Gregory,
What about factors that contribute to employee churn rate in an organization?

 
At 8:33 AM, December 12, 2009, Anonymous Anonymous said...

Well Done!

Highly appreciated your work.

I need updated figure, if anybody have please email me on armaghan.n@mobilink.net

Thanks

 
At 1:39 AM, April 20, 2010, Anonymous Research Paper said...

Many institutions limit access to their online information. Making this information available will be an asset to all.

 
At 10:35 PM, June 17, 2010, Anonymous Market Research Company India said...

This is a great start. Actual churn models often include analysis like survival analysis etc. In this we can predict the churn rate through cox regression

 
At 12:21 PM, November 02, 2010, Anonymous Anonymous said...

I hit several brick walls while trying to locate industry churn rates. Thanks for the huge effort and for making the data available to all.

Please post updated numbers, if available.

 
At 6:42 AM, January 08, 2011, Anonymous Kabel Internet Provider said...

Thanks for the information..I was so much confused with the churn rate but you explain it so well that all my doubts related to it are cleared now..Your post is a huge source of information and I gather lot of knowledge..

 
At 1:12 PM, October 27, 2011, Blogger Sondra said...

Love this, just what i was looking for, but could I impose on you to update it from 2006? It would be an amazing resource and I would sing your praises far and wide (at least as wide as my reach, lol).

Cheers!

 
At 4:05 AM, July 30, 2013, Blogger gabriele magi said...

Greg, have you ever found any data about software industry? Thank You

 
At 4:42 PM, April 01, 2014, Anonymous Chris said...

This is a great analysis. I've come back to it many times over my career. I wish you'd update it though! And crowdsource it! Would love to see rates for new industries that have since sprung up like mobile apps.

Chris

 

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