What is Churn Rate, and how do you calculate it?
In short – The percentage of customers who stop using the service over a specific period.. A key marketplace metrics you should track.
Churn Rate Formula
Churn Rate = (Customers Lost / Total Customers at Start of Period) × 100
Churn Rate measures the proportion of users who stop engaging with the platform over a given period. A high churn rate suggests problems with user retention, product-market fit, or customer satisfaction. Reducing churn is essential for sustainable growth. This metric provides deep insights into business performance, helping to identify trends, optimize strategies, and improve overall marketplace efficiency. This metric provides deep insights into business performance, helping to identify trends, optimize strategies, and improve overall marketplace efficiency.
How can you find your Churn Rate?
You should generally be able to calculate your Churn Rate with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Net Promoter Score (NPS)
A measure of customer loyalty and satisfaction based on user feedback.
Average Order Value (AOV)
The average value of orders placed on the platform.
Supplier Lifetime Value (SLV)
The projected revenue generated by a supplier over their tenure on the platform.
Repeat Purchase Ratio
The proportion of customers who make repeat purchases over a given period.
Customer Lifetime Value (CLV)
The projected revenue a customer will generate during their relationship with the business.