Churn is one of the biggest killers of brands. Despite this most brands have not been doing a good job of retaining disappearing users on mobile. And when it costs 5 to 25 times more to acquire a new user than it does to retain an existing one, this is hardly cost-efficient. But it hits revenue even harder. Let’s take a look at a theoretical example.
- If this business sees 1% monthly churn, ARR in a years time declines 11% to $16m
- If that monthly churn is 10%, ARR at the end of the year will have decline 72% to $5.1m