What is churn and why prevent it?

Churn is a measurement of users or devices that are no longer active and are unlikely to ever come back.

With subscription-based products, it's easy. You know users have churned when they cancel their membership. But for all other cases, you need to rely on your device and user data.

This can be tricky to track, but we have a few tips that can help you out.

Identify the point of true churn and look for patterns

Let's start with a quick caveat. A user can stop using your app but still use your device – with Alexa or the Google Assistant, for example. So it's important to look at device and user data separately to get an accurate picture of what's happening.

Now that we've got that covered, let's talk about true churn. This is the point at which you can be 95% confident that a user and their household will never open the app or use the device again based on their usage pattern.

Copilot.cx has an automated system to assess the churn risk of your users and devices based on their historical usage patterns. If someone uses the app every day and then does nothing for three weeks, this would be flagged. But if someone only uses the app once a month and is inactive for three weeks, it wouldn't.

One special case here is seasonal products like smart heaters or air conditioning. For these products, you may see users and devices disappear for six months at a time, so you should have a strategy in place to wake them up when the time (and weather) is right.

Why you should set an OKR for churn rate

The longer you can keep a user active, the more opportunities you have to increase their lifetime value (LTV). 

With every week, month, or year a user stays with you, you'll have more chances to sell them follow-up products like new models or accessories. So it's always a good idea to set an OKR to improve on your churn rate. 

Here are two other reasons it's important to focus on churn:

1. Great reviews – the longer a customer stays with you, the more likely they'll be to leave a great review on your storefront
2. Customer satisfaction – overall user lifetime is a valuable way of tracking satisfaction

How to improve your churn rate

In the following pages, we'll be looking at two important ways to improve your churn rate:

1. Reactivation – remind churned users that you're there and how you can give them value to restore normal usage 
2. Constant engagement – stay in touch with your users by helping them through difficult situations and showing them all the new and exciting things your product offers

By following both of these strategies, you can increase your overall user lifetime and elevate the customer experience.