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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